Medicare will Deny Claims Relating to Hospital-Acquired Conditions

Newly adopted Medicare regulations make it clear that Medicare intends to stop reimbursing hospitals for expenses associated with “hospital-acquired conditions”.


Pursuant to the Deficit Reduction Act of 2005 (Pub. L. 109-171), the Secretary identified certain high cost and/or volume preventable conditions that result from inadequate hospital care and are identifiable by unique ICD-9-CM codes. In accordance with the Congressional mandate, CMS will no longer provide reimbursement for such specified hospital-acquired conditions. See 42 C.F.R. 411, et seq..

Non-reimbursable Claims

While many conditions were considered, the list was eventually narrowed down to the following conditions for which Medicare will not provide any reimbursement:

  • Pressure ulcers
  • Hospital falls
  • Certain catheter-associated infections
  • Air embolism as a result of surgery
  • Leaving an object in during surgery
  • Providing incompatible blood or blood products
  • Mediastinitis following coronary bypass surgery

It should be noted that existing Medicare regulations prohibit the balance billing of patients. Therefore, if Medicare denies payment for these hospital-acquired conditions, a hospital cannot attempt to pass these costs onto its patients.

Implications for Providers

By some estimates, numerous hospitals will experience millions of dollars in annual reimbursement denials as a result of the new Medicare regulations. However, these new reimbursement rules will not have a direct or immediate impact on physicians. Nevertheless, they do indicate a new direction for Medicare and it is likely that Medicare will eventually apply similar rules to health care providers.

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