Statute Regulations Program Instructions

Statute Regulations Program Instructions


On February 8, 2006, the President signed the Deficit Reduction Act (DRA) of 2005.  Section 5001(c) of DRA requires the Secretary to identify conditions that are:  

  1. High cost or high volume or both, 
  2. Result in the assignment of a case to a DRG that has a higher payment when present as a secondary diagnosis, and 
  3. Could reasonably have been prevented through the application of evidence-based guidelines.  

Section 5001(c) provides that CMS can revise the list of conditions from time to time, as long as it contains at least two conditions.


The Inpatient Prospective Payment System (IPPS) Fiscal Year (FY) 2009 Final Rule included 10 categories of conditions for the HAC payment provision beginning October 1, 2008. In addition, the IPPS FY 2009 final rule determined the payment implications for the Present on Admission (POA) Indicator reporting options.

CMS has included a discussion of the HAC and POA payment provision in the IPPS FY 2007 through IPPS FY 2015 Proposed and Final Rules. 

Program Instructions

Section 5001(c) requires hospitals to report present on admission information for both principal and secondary diagnoses when submitting claims for discharges on or after October 1, 2007.

On July 20, 2007, Change Request 5679 (PDF) was released. This CR instructs on correct POA Indicator reporting options. On June 13, 2008, Change Request 6086 (PDF) was released.  This CR instructs the Grouper software to not apply HAC logic to claims from exempt Inpatient hospitals.

Page Last Modified:
02/09/2024 03:20 PM