DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid and CHIP Services
 
CMCS Informational Bulletin 
 
  
DATE:  May 9, 2012 
 
FROM:  Cindy Mann, Director 
  Center for Medicaid and CHIP Services (CMCS) 
 
SUBJECT:  Medicaid Financial Management Regulations Update 
 
This informational bulletin provides information on two topics: 
  Display of Notice of Proposed Rulemaking: Increased Medicaid Payment for Primary 
Care (CMS 2370-P) 
  Upcoming effective date of the  Provider Preventable Conditions rule 
 
 
Display of Notice of Proposed Rulemaking: Increased Medicaid Payment for 
Primary Care (CMS 2370-P) 
 
Today the Centers for Medicare & Medicaid Services (CMS) put on display at the Federal 
Register a proposed rule to implement section 1202 of the Affordable Care Act, which provides 
increased payments for certain Medicaid primary care services.  Under this provision, certain 
physicians that provide eligible primary care services would be paid the Medicare rates in effect 
in calendar years (CY) 2013 and 2014 (or if greater, the Medicare rate in effect in 2009) instead 
of their usual state-established Medicaid rates, which may be lower than federally established 
Medicare rates.  Increased payment applies to primary care services delivered by a physician 
with a specialty designation of family medicine, general internal medicine, or pediatric medicine 
or related subspecialists.  States will receive 100 percent Federal financial participation (FFP) for 
the difference between the Medicaid State plan payment amount as of July 1, 2009 and the 
applicable Medicare rate.  The increase applies to a specific set of services and procedures that 
CMS designates as primary care services.   
 
This notice of proposed rulemaking is open for public comment for 30 days after publication in 
the Federal Register. Please refer to the Federal Register for specific instructions about 
submitting comments. 
 
The rule is available at: www.ofr.gov/inspection.aspx.  
 
Additional information is available at: http://www.cms.gov/apps/media/fact_sheets.asp  CMCS Informational Bulletin, Page 2 
Upcoming Effective Date of Provider Preventable Conditions Rule 
 
On June 6, 2011, CMS published a final rule implementing Provider Preventable Conditions 
(PPCs) as authorized by section 2702 of the Affordable Care Act.  The provisions of this rule 
prohibit federal payments to States under section 1903 of the Social Security Act for any 
amounts expended for providing medical assistance for health care-acquired conditions.  The 
final rule incentivizes quality improvement at the provider-level and cost savings for States by 
requiring States to reduce payments at the occurrence of hospital errors and Never Events in 
specific health care settings.  The final rule became effective July 1, 2011, and CMS provided 
States with an additional year to meet these new requirements in order to allow States time for 
the discussion of policy, implementation of required hospital changes, and development of the 
appropriate systems for reporting.   
 
The final implementation date of July 1, 2012 is rapidly approaching, so we want to highlight 
technical assistance resources widely available in order to assist states in meeting the 
requirements of the final rule.   
 
CMCS has created a Provider Preventable Conditions website through Medicaid.gov.  This 
website contains basic information about the final rule requirements, SPA pre-prints and 
instructions, as well as a Frequently Asked Questions page which includes program-specific 
questions that will help States craft their PPC policies and meet the State plan requirements.  For 
those states which have not yet submitted the required SPA, CMS staff remains available for 
direct technical assistance.   
 
The PPC website is available at http://www.medicaid.gov/Medicaid-CHIP-Program-
Information/By-Topics/Financing-and-Reimbursement/Provider-Preventable-Conditions.html  
 
You may also direct questions on this topic to Andrew Badaracco at (410) 786-4589 or by e-mail 
at Andrew.Badaracco@cms.hhs.gov