CurrentNeighborhood Health Plan of Rhode IslandPolicy N/A

Non-payment for Provider Preventable Conditions (PPCs) / Hospital Acquired Conditions (HACs)

Defines Neighborhood Health Plan of Rhode Island's reimbursement policy for Provider Preventable Conditions (including Hospital Acquired Conditions and Other Provider Preventable Conditions) and who is affected (Medicaid, INTEGRITY/MMP, Commercial).

Policy Summary

PayerNeighborhood Health Plan of Rhode Island

PolicyNon-payment for Provider Preventable Conditions (PPCs) / Hospital Acquired Conditions (HACs)

Policy CodePolicy N/A

Change TypeAdministrative review — no content changes (2025, 2023, 2022)

Effective DateJul 1, 2012

Next Review DateN/A

Key ActionVerify member eligibility, coverage, and authorization criteria prior to rendering services; contact Provider Services with questions.

SourceLink

POLICY UPDATE CHANGES

03/19/2025: Policy Review Date — No content changes.

11/28/2023: Policy Review Date — No content changes.

10/01/2022: Format changes, no content changes.

14CMS-designated HAC categories referenced

2012-07-01Policy effective date

Medicaid, INTEGRITY, CommercialLines of business

POA requiredPOA reporting

Non-payment and Claim Reporting Criteria

Neighborhood does not reimburse providers for services attributable to Provider Preventable Conditions (PPCs), including Hospital Acquired Conditions (HACs) and Other Provider Preventable Conditions (Never Events); claims must be reported with required POA indicators and applicable diagnosis/modifier codes.

Services attributable to Hospital Acquired Conditions (HACs) and Other Provider Preventable Conditions (including Never Events) are non-reimbursable and must be reported as HAC-related or PPC-related on claims.

Applies to the following lines of business: Medicaid, INTEGRITY (MMP), and Commercial.

All services provided in the operating room or other healthcare setting when an HAC or Other Provider Preventable Condition occurs are considered related to the HAC and are not reimbursed; follow-up services related to the same PPC are also not reimbursed.

Individual providers who could bill for services rendered during an HAC are not eligible for payment for those services; such services must be reported as HAC-related on claims.

Members assume no liability for any HAC or HAC-related services deemed non-reimbursable, including copays or deductibles.

Inpatient facility claims containing HACs must include the Present on Admission (POA) indicator; POA = Y indicates the condition was present on admission and payment may be made; POA = N, U, or blank may trigger PPC payment adjustments per CMS rules.

Claims for Other Provider Preventable Conditions (incorrect surgeries) must include the required diagnosis codes and HCPCS modifiers (e.g., Y65.51, Y65.52, Y65.53) and, where applicable, non-covered inpatient claims should use bill type 0110.

Complete ICD-10 HAC code lists by federal fiscal year are maintained on the CMS website and should be referenced for specific diagnosis codes when preparing claims.

Neighborhood reserves the right to request medical records and to apply CMS documentation standards; payments remain subject to member eligibility, benefit coverage, coding edits, and provider contract terms.

Codes and Present-on-Admission Reporting

HAC and Wrong Procedure CodesICD-10 | HCPCSCovered

See CMS HAC ICD-10 code list	Full list of HAC ICD-10 diagnosis codes by federal fiscal year available on CMS website
Y65.51	Performance of wrong procedure (operation) on correct patient.
Y65.52	Performance of operation (procedure) on patient.
Y65.53	Performance of correct operation (procedure) on wrong side/body part

POA reporting

Operational requirementPOA indicator reporting is mandatory for all inpatient admissions to acute care hospitals or other facilities.

Purpose of POA on claimsThe POA indicator, when reported with a HAC diagnosis code, determines payment implications for the claim (e.g., 'Y' = present on admission; 'N' or insufficient/clinically undetermined = PPC payment adjustments).

Consequences for missing or unreported POAIf POA is unreported or blank (UB‑04 equivalent), the claim is treated as exempt from POA reporting and applicable PPC payment adjustments will be made.

Documentation standardPOA must reflect whether the diagnosis was present at the time of inpatient admission; documentation insufficient to determine POA will trigger applicable PPC payment adjustments.

Provider Responsibilities

Prior Authorization

Prior Authorization and Verification Required

All services must be medically necessary to qualify for reimbursement. Providers are responsible for verifying member eligibility, plan coverage, and any required prior authorizations or other authorization criteria before rendering services. Neighborhood Health Plan of Rhode Island may use Local Coverage Determinations (LCD), National Coverage Determinations (NCD), industry-accepted criteria (for example, InterQual), Rhode Island EOHHS recommendations, and Clinical Medical Policies (CMP) when determining medical necessity.

Verify member eligibility and benefits before scheduling or providing services.
Confirm whether prior authorization is required and obtain authorization when applicable.
Retain documentation supporting medical necessity and authorization for claims submission and audit.
Contact Provider Services at 1-800-963-1001 with questions about eligibility, coverage, or prior authorization requirements.

Key Definitions

HAC — definition

TermHospital Acquired Condition (HAC)

DefinitionAn undesirable condition or complication developed by a patient during a stay in a hospital or medical facility that was not present on admission.

Payment implicationInpatient facility claims containing HACs must include a POA indicator; if POA = 'N' or unable to determine, applicable PPC payment adjustments apply.

Other Provider Preventable Conditions (Never Events)

TermOther Provider Preventable Conditions (Never Events)

DefinitionSerious medical mistakes that should never happen and are considered provider preventable conditions pursuant to 42 CFR 447.26; included events are those meeting the regulatory definition regardless of place of service.

ExamplesSurgical or other invasive procedure performed on the wrong body part; surgical or other invasive procedure performed on the wrong patient; wrong procedure performed.

Reimbursement stanceNeighborhood will not reimburse facilities or professional providers for increased incremental costs of inpatient care or professional services resulting from these events.

POA — Present on Admission

TermPresent on Admission (POA)

DefinitionConditions present at the time an order for inpatient admission occurs, or that develop during an outpatient encounter (including emergency department, observation, or outpatient surgery).

Use on claimsPOA indicators accompany HAC diagnosis codes on inpatient facility claims to determine payment treatment for the condition.

Policy Revision History

2025-03-19Policy ReviewLatest

Policy reviewed with no content changes noted.

2023-11-28Policy Review

Policy reviewed with no content changes noted.

2022-10-01Formatting Update

Format changes applied; no content changes.

2019-11-13Policy Review

Policy reviewed with no content changes noted.

2019-03-25Policy Review

Policy reviewed with no content changes noted.

2012-07-01Effective Date

Policy became effective.

Policy Summary

PayerNeighborhood Health Plan of Rhode Island

PolicyNon-payment for Provider Preventable Conditions (PPCs) / Hospital Acquired Conditions (HACs)

Policy CodePolicy N/A

Change TypeAdministrative review — no content changes (2025, 2023, 2022)

Effective DateJul 1, 2012

Next Review DateN/A

Key ActionVerify member eligibility, coverage, and authorization criteria prior to rendering services; contact Provider Services with questions.

SourceLink

On This Page

OpenPayer

Non-payment for Provider Preventable Conditions (PPCs) / Hospital Acquired Conditions (HACs)

Non-Payment and Claim Reporting

Codes and Present-on-Admission Reporting

Provider Responsibilities

Key Definitions

Policy Revision History