CurrentBlue Cross Blue Shield - Rhode IslandPolicy N/A

Payment Policy: Payment Adjustments for Error and Hospital-Acquired Conditions

Administrative reimbursement policy describing BCBSRI procedures for denying or adjusting payment for services resulting from errors, equipment malfunction, or hospital-acquired conditions; applies to providers billing Blue Cross & Blue Shield of Rhode Island.

Policy Summary

PayerBlue Cross Blue Shield - Rhode Island

PolicyPayment Adjustments for Error and Hospital-Acquired Conditions

Policy CodePolicy N/A

Change TypeAdministrative (no material coverage change)

Effective DateMar 5, 2015

Next Review DateN/A

Key ActionBCBSRI will implement payment adjustments via Audit Recovery and providers may follow administrative appeal procedures if applicable.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3types of events

POAPOA required

audit recoveryadjustment process

Not applicablemedical criteria

When Payment Is Denied or Adjusted

Policy Summary

PayerBlue Cross Blue Shield - Rhode Island

PolicyPayment Adjustments for Error and Hospital-Acquired Conditions

Policy CodePolicy N/A

Change TypeAdministrative (no material coverage change)

Effective DateMar 5, 2015

Next Review DateN/A

Key ActionBCBSRI will implement payment adjustments via Audit Recovery and providers may follow administrative appeal procedures if applicable.

SourceLink

On This Page

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Payment adjustment criteria

Payment is denied or adjusted in the following circumstances:

ALL of the following

Examples include
- Wrong site surgery.
- Wrong procedure performed (not limited to surgery; e.g., a different diagnostic test is performed or a medication administered other than the one ordered).
- Wrong patient.
- Foreign object retained after surgery.

Equipment Malfunction: No payment is made for services or complications where equipment malfunction caused the procedure to be terminated or the patient to be injured. Treatment of any injury by the same provider is also ineligible for payment.

Hospital-Acquired Conditions (HAC): DRG-based payment methods follow the most current Medicare rules regarding HAC definitions and payment adjustments based on whether the condition was present on admission (POA). POA indicator modifiers must be provided on facility claims. For patients admitted to observation and converted to inpatient, a complication that arose during observation shall be considered not POA.

Provider and payment scope: Adjustments may apply to facility payment, professional payment, or both depending on the event and the setting. Equipment-failure adjustments apply to the party that receives the facility-related payment (the professional when service is non-facility; the facility when performed in a facility). Wrong-site/ wrong-patient/ wrong-procedure adjustments may apply to facility, surgeon, and anesthesia professionals as appropriate; other wrong-procedure adjustments will reflect the source of the error (e.g., if a facility-administered medication not ordered, the facility payment would be affected).

System-wide contractual relationships (e.g., hospital system defined by contractual status, licensure, ownership) determine responsible parties.

Appeals and recovery: Adjustments will be implemented by BCBSRI Audit Recovery. Contractual audit recovery provisions apply; administrative appeal procedures are available for providers without such contractual provisions.

Chart review and scope of review: Chart review for payment adjustments is generally limited to verification of the event or DRG validation. Payment review is distinct from quality-of-care or reporting requirements.

Audit Recovery, Appeals, and Billing Impact

Billing Rule

POA and Provider Payment Impact

BCBSRI applies POA (Present on Admission) indicator requirements on facility claims for Hospital-Acquired Conditions (HACs). Facilities must submit correct POA indicators; if a condition is determined to be not POA (including complications arising during observation later converted to inpatient), HAC-related DRG payment adjustments may be applied. These adjustments can affect facility payments and—depending on the event—professional payments as well.

POA indicator required on facility claims for HACs
Complications arising during observation that lead to inpatient admission may be considered not POA
HAC adjustments applied to facility DRG payments

Prior Authorization

Audit Recovery / Appeals

BCBSRI Audit Recovery will implement payment adjustments. Contractual audit recovery provisions apply when present; for providers without contractual provisions, BCBSRI administrative appeal procedures are available. Providers who disagree with BCBSRI adjustments should follow the contract’s Audit Recovery terms or the administrative appeal process to dispute adjustments.

Adjustments implemented by BCBSRI Audit Recovery
Contractual audit recovery provisions govern when present
Administrative appeal procedures apply for providers without audit recovery provisions

Key Definitions

inv-05: Services rendered in error — examples and payment exclusion

DefinitionServices rendered in error for which no payment is made when performed by the same provider/system.

ExamplesWrong site surgery; wrong procedure performed (including wrong diagnostic test or wrong medication administered); wrong patient; foreign object retained after surgery.

Scope of denialPayment is denied for the erroneously performed service and for treatment of any related complications when those services are provided by the same provider or system.

Related noteThis policy’s error category is administrative and distinct from quality-of-care reviews; chart review is generally limited to event verification or DRG validation.

inv-06: Equipment malfunction — services or complications and payment ineligibility

DefinitionServices or complications resulting from equipment malfunction for which payment is not made when the malfunction caused procedure termination or patient injury.

Treatment ineligibilityTreatment of any injury caused by the equipment malfunction, when provided by the same provider, is also ineligible for payment.

Examples of impactProcedure terminated due to device failure; patient injury requiring additional treatment related to malfunction — both subject to denial when treated by same provider/system.

Administrative scopeAdjustments for equipment malfunction are implemented as part of BCBSRI’s payment recovery processes and are administrative rather than clinical quality determinations.

inv-07: Hospital-Acquired Conditions (HAC) — DRG adjustments, POA, and observation conversions

DefinitionHospital-Acquired Conditions (HACs) are conditions subject to DRG-based payment adjustments following the most current Medicare payment rules and definitions.

POA requirementPresent-on-admission (POA) indicator modifiers must be provided on facility claims to determine whether HAC payment adjustments apply.

Observation-to-inpatient conversionIf a complication arises during observation status and the patient is later converted to inpatient, the complication shall be considered not POA.

Payment effectDRG-based payment adjustments are applied to facility payments per Medicare rules; adjustments may affect facility, professional, or both payments depending on the event and setting.

OpenPayer

Payment Policy: Payment Adjustments for Error and Hospital-Acquired Conditions

When Payment Is Denied or Adjusted

Coding Practices and HAC Indicator

Audit Recovery, Appeals, and Billing Impact

Key Definitions