Medicaid Serious Adverse Event Reimbursement


Effective October 1, 2008, Medicaid will deny or reduce payment for three (3) serious adverse events (object left in after surgery, air embolism, and blood incompatibility).

This new reimbursement policy applies to discharges on or after October 1, 2008. The New York State Department of Health will suppress the ICD-9 codes relating to these events and make use of the Present on Admission indicator to adjust reimbursement accordingly. All inpatient claims (including claims from Article 31 facilities, inpatient substance abuse programs, critical access hospitals, children's hospitals) are required to have a valid Present on Admission (POA) indicator for each diagnosis. Claims that lack a valid POA indicator will be denied. Medicaid will audit the accuracy of this claim field. Medicaid is using POA definitions as outlined by CMS, described in MLN Matters Number 5499, and detailed in: CMS Manual System Pub 100-04, Medicare Claims Processing.

To prevent billing Medicaid for charges that may result from the suppression of these diagnosis codes, hospitals are instructed not to bill for day or high cost outlier payments which are a result of, or significantly associated with, the three (3) events mentioned above.

The Department has developed a methodology relating to rate reduction for the additional ten events. This methodology will be implemented for all inpatient admissions on and after November 1, 2009.

Please refer to the August 10, 2009 letter, which is included here, for additional information regarding this policy.

Questions? Please contact Philip Mossman at (518) 474-1673 or Dr. Foster Gesten at (518) 486-6865.

13 Hospital-Acquired Events

  1. Surgery performed on wrong body part
  2. Surgery performed on wrong patient
  3. Wrong surgical procedure on a patient
  4. Retention of a foreign object in a patient after surgery or other procedure
  5. Patient disability associated with a medication error
  6. Patient disability associated with a reaction to administration of ABO-incompatible blood or blood products
  7. Patient disability associated with use of contaminated drugs, devices, biologics provided by healthcare facility
  8. Patient disability associated with the use or function of a device in patient care in which the device is used or functions other than as intended
  9. Patient disability associated with intravascular air embolism that occurs while being cared for in a healthcare facility
  10. Patient disability associated with an electric shock while being cared for in a health care facility
  11. Any incident in which a line designated for oxygen or other gas to be delivered to a patient contains the wrong gas or is contaminated by a toxic substance
  12. Patient disability associated with a burn incurred from any source while being cared for in a healthcare facility
  13. Patient disability associated with the use of restraints or bedrails while being cared for in a healthcare facility

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