Provider-Preventable Conditions Policy

In June 2011, the Centers for Medicare and Medicaid Services (CMS) finalized a rule that prohibits Medicaid payments for the additional cost of services that result from certain preventable healthcare acquired illnesses or injuries, generally referred to as provider-preventable conditions (PPCs). There are two distinct categories of PPCs: Health Care-Acquired Conditions (HCACs), which apply to Medicaid inpatient hospital settings, and Other Provider-Preventable Conditions (OPPCs), which apply broadly to Medicaid inpatient and outpatient health care settings where such events may occur.

Health Care Acquired Conditions

(formerly referred to as Hospital Acquired Conditions (HACs))

As health care-acquired conditions, the State recognizes the following ten Medicare HACs for which the State will make no payment when the diagnosis is not present on admission:

  1. A foreign object retained within a patient´s body after surgery.
  2. The development of an air embolism within a patient´s body.
  3. A patient blood transfusion with incompatible blood.
  4. A patient´s development of stage III or stage IV pressure ulcers.
  5. Patient injuries resulting from accidental falls and other trauma, including, but not limited to:
    1. Fractures
    2. Dislocations
    3. Intracranial injuries
    4. Crushing injuries
    5. Burns
    6. Electronic shock
  6. A patient´s manifestations of poor glycemic control, including, but not limited to:
    1. Diabetic ketoacidosis
    2. Nonketotic hyperosmolar coma
    3. Hypoglycemic coma
    4. Secondary diabetes with ketoacidosis
    5. Secondary diabetes with hyperosmolarity
  7. A patient´s development of a catheter-associated urinary tract infection.
  8. A patient´s development of a vascular catheter-associated infection.
  9. A patient´s development of a surgical site infection following:
    1. a coronary artery bypass graft - mediastinitis;
    2. bariatric surgery, including, but not limited to, laparoscopic gastric bypass, gastroenterostomy, and laparoscopic gastric restrictive surgery; or
    3. orthopedic procedures, including, but not limited to, such procedures performed on the spine, neck, shoulder and elbow.
  10. A patient´s development of deep vein thrombosis or a pulmonary embolism in connection with a total knee replacement or a hip replacement, excluding pediatric patients, defined as patients under eighteen years of age, and also excluding obstetric patients, defined as patients with at least one primary or secondary diagnosis code that includes an indication of pregnancy. Those diagnosis codes that indicate pregnancy can be found by selecting this link.

In addition, the State will make no payment for the following three surgeries when they occur in an inpatient setting:

  1. Surgery on the wrong patient.
  2. Wrong surgery on a patient.
  3. Surgery performed on the wrong site.

To implement this rule, the State has worked with 3M Health Information Systems to incorporate a modification to the APR-DRG grouping software to identify the evidence of a HCAC (through diagnosis codes) when it is not present on admission. Such diagnosis codes related to the HCAC will be redacted from the claim prior to assigning a DRG and severity level, which ultimately determines the level of payment to the provider.

This modification to the grouping logic was completed and incorporated into Version 29 of the APR DRG grouping software that is in effect for discharges on or after January 1, 2012. In addition, for claims utilizing per diem payments, the number of covered days should be reduced by the number of days associated with diagnoses not present on admission for any HCAC. Claims containing a diagnosis not present on admission will be reviewed by clinical staff to determine if the diagnosis contributed to a longer length of stay. If the clinical review can reasonably isolate that portion of the actual length of stay that is directly related to the diagnosis not present on admission, payment will be denied for the directly related length of stay.

Other Provider-Preventable Conditions

The State recognizes the following three Medicare National Coverage Determinations, for which the State will make no payment when they occur in an ambulatory setting, including a physician's office:

  1. Surgery or other invasive procedure on the wrong patient.
  2. Wrong surgery or other invasive procedure on a patient.
  3. Surgery or invasive procedure performed on the wrong site.

To implement this rule, payment will not be made for services provided on or after July 1, 2012, that include the modifier PC, PA, or PB, or for which Medicare has not made a payment (crossover payment).

Additional Information:

CMS Final Rule:

Public Notices: