CurrentNeighborhood Health Plan of Rhode IslandPolicy N/A

Provider Preventable Conditions non-payment policy

Governance of non-payment and billing/reporting requirements for Provider Preventable Conditions (PPCs), including Hospital Acquired Conditions (HACs) and other never-events, for Neighborhood Health Plan of Rhode Island members across applicable lines of business.

Policy Summary

PayerNeighborhood Health Plan of Rhode Island

PolicyProvider Preventable Conditions non-payment policy

Policy CodePolicy N/A

Change TypeAdministrative updates (no material changes)

Effective DateJul 1, 2012

Next Review Date

Key ActionReport PPC occurrences on claims and notify Neighborhood's Medical Management Department; submit complete claims within contractual timely filing guidelines.

SourceLink

POLICY UPDATE CHANGES

2022 policy review: Date format changes, no content changes.

2020 review updated policy to include all lines of business.

14CMS-designated HAC categories referenced

All linesApplies to

2012Policy effective

RequiredPOA reporting

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Non-payment criteria and billing requirements

Neighborhood will not reimburse for incremental costs or services related to Provider Preventable Conditions (PPCs); claim reporting, POA indicators, and coding rules determine non-payment.

Neighborhood will not reimburse facilities or professional providers for increased incremental costs of inpatient care or professional services that result when a member is harmed by a Provider Preventable Condition (PPC) or Hospital Acquired Condition (HAC).

Related services (any of the following are considered related and not reimbursed)

All services provided in the operating room or other healthcare setting when an Other Provider Preventable Condition or HAC occurs must be reported as HAC-related services and are not reimbursed.
Follow-up services provided as a result of a previously reported PPC involving the same member are not reimbursed and must be reported as HAC-related services.
All providers in the operating room or other healthcare setting when an HAC occurs who could bill individually for their services are not eligible for payment; their services must be reposted as HAC-related services.
Related services do not include performance of the correct procedure.

Members will not be held liable for any HAC or HAC-related services deemed nonreimbursable, including copayments or deductibles.

Present on Admission (POA) indicator reporting is mandatory for all inpatient admission claims; the POA indicator in conjunction with a HAC diagnosis code determines payment implications: - Reason code indicating present on admission: payment will be made for the condition. - Reason code indicating not present on admission: applicable PPC payment adjustments will be made (not reimbursed). - Reason codes for documentation insufficient or clinically undetermined: applicable PPC payment adjustments will be made.

For Other Provider Preventable Conditions (incorrect surgery), a non-covered claim with Bill Type 0110 must contain one of the specified external cause diagnosis codes (Y65.51, Y65.52, Y65.53) and the applicable HCPCS modifiers must be appended to all claim lines related to the incorrect surgery.

Providers must submit complete claims for PPC/HAC occurrences per contractual timely filing guidelines and report the occurrence through claims submissions; claims reporting and coding determine non-payment as described above.

Medical record documentation must support billed services and medical necessity; Neighborhood follows CMS documentation standards in making determinations related to PPC/HAC claims.

Diagnosis and Code Guidance for PPCs and HACs

Selected diagnosis and external cause codes for Other Provider Preventable ConditionsICD-10Not Covered

Y65.51	Performance of wrong procedure (operation) on correct patient
Y65.52	Performance of operation (procedure) on patient not scheduled for surgery
Y65.53	Performance of correct operation (procedure) on wrong side/body part

Applicable HCPCS modifiers for incorrect surgeryModifierNot Covered

PA	Surgery Wrong Body Part
PB	PB
PC	Surgery Wrong Patient

CMS HAC ICD-10 lookup

ReferenceRefer to the CMS list of HAC ICD-10 diagnosis codes by Federal fiscal year on the CMS website (Hospital Acquired Conditions ICD-10 lookup).

LocationCMS Hospital Acquired Conditions (HAC) ICD-10 lookup page: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/icd10_hacs

PurposeProvides the official mapping of HAC categories to ICD-10 diagnosis codes used for claim reporting and payment determinations.

Claims Submission, Notifications, and Verification Responsibilities

Documentation Required

Claims reporting and notification

Report all Provider Preventable Condition (PPC) occurrences on claims and notify Neighborhood's Medical Management Department; submit complete claims within contractual timely filing guidelines.

Report the PPC occurrence through claims submissions.
Notify Neighborhood by contacting the Medical Management Department.
Submit complete claims for payment within contractually determined timely filing guidelines.

Prior Authorization

Medical necessity verification

Verify member eligibility, coverage, and authorization prior to rendering services; Neighborhood may apply LCDs, NCDs, InterQual, EOHHS recommendations, and Clinical Medical Policies to determine medical necessity.

Providers are responsible to verify eligibility, coverage and authorization criteria before providing services.
Neighborhood may use Local Coverage Determinations (LCD), National Coverage Determinations (NCD), InterQual, Rhode Island EOHHS recommendations, and Clinical Medical Policies to determine medical necessity.

Key Terms and Definitions

Hospital Acquired Condition (HAC)

DefinitionAn undesirable condition or complication developed by a patient during a hospital stay that was not present on admission and is designated by CMS as a Hospital Acquired Condition (HAC).

ScopeIncludes 14 CMS-designated HAC categories used in payment determinations; examples include retained foreign object after surgery, air embolism, and certain surgical site infections.

Relevance to paymentIf the condition is not present on admission (POA = N), applicable PPC payment adjustments are made and the incremental costs are not reimbursed by Neighborhood.

Other Provider Preventable Conditions (PPC / Never Events)

DefinitionSerious, clearly identifiable and measurable medical mistakes that are usually preventable and are classified as Other Provider Preventable Conditions (also known as Never Events).

ExamplesWrong body part surgery, wrong patient surgery, and wrong procedure (e.g., surgical or other invasive procedure performed on the wrong body part).

Regulatory basisMeets requirements of 'Other Provider Preventable Condition' pursuant to 42 CFR 447.26 and are considered non‑reimbursable when applicable.

Present on Admission (POA)

DefinitionCondition present at the time an order for inpatient admission occurs or that develops during an outpatient encounter; used to indicate whether a condition existed on admission (POA).

POA indicatorsPOA codes include: Y = present at time of inpatient admission; N = not present at time of inpatient admission; U = documentation insufficient; W = clinically undetermined; blank/unreported = treated as not reported.

Payment impactPOA indicator in conjunction with a HAC diagnosis code determines payment implications: POA=Y generally results in payment for the condition; POA=N or insufficient documentation (U) may trigger PPC payment adjustments and non‑reimbursement.