Serious Adverse Events and Present on Admission

Blue Cross and Blue Shield of Nebraska (BCBSNE) Medicare Advantage plans do not pay for medically unnecessary services, regardless of the cause. The main provisions of the policy are as follows:  

• BCBSNE will not reimburse a hospital or physician whose direct actions result in a serious adverse event.
• Serious adverse events affected by this policy will be updated as needed to remain consistent with changes made by the Centers for Medicare & Medicaid Services (CMS).  
• BCBSNE Medicare Advantage participating hospitals are required to report present on admission indicators on all claims.  
• BCBSNE Medicare Advantage participating hospitals are not to balance bill members for any incremental costs associated with the treatment of a serious adverse event that BCBSNE has paid.  
• BCBSNE Medicare Advantage members who have been billed in error should report incidents to BCBSNE as appropriate.  
• The policy on serious adverse events applies to all acute care hospitals, exempt hospital units and critical access hospitals that have signed a BCBSNE Medicare Advantage participating hospital agreement.  
• BCBSNE developed the following list of events and conditions:  
  • Object left in the body after surgery  
  • Air embolism as a result of surgery  
  • Blood incompatibility  
  • Catheter-associated urinary tract infections  
  • Pressure sores (decubitus ulcers) — Stage 3 or 4  
  • Vascular catheter-associated infections  
  • Surgical site infections  
    • Mediastinitis following a coronary artery bypass graft surgery  
    • Gastric bypass  
    • Orthopedic procedures  
    • Cardiac Implantable Electronic Device  
  • Hospital-acquired injuries  
    • Falls and fractures  
    • Dislocations  
    • Intracranial and crushing injury  
    • Burns  
  • Deep vein thrombosis or pulmonary embolism following:  
    • Total knee replacement  
    • Total hip replacement  
  • Manifestations of poor glycemic control  
  • Diabetic ketoacidosis  
    • Non-ketotic Hyperosmolar coma  
    • Hypoglycemic coma  
    • Secondary diabetes with ketoacidosis 
    • Secondary diabetes with hyperosmolarity  
  • Iantrogenic pneumothorax with venous catheterization

Additionally, CMS further defined the following events for easier identification: 

• Performance of procedure on patient not scheduled for operation (procedure) — formerly known as surgery on wrong patient  
• Performance of correct procedure on wrong side or body part — formerly known as surgery on wrong body part  
• Performance of wrong procedure on correct patient — formerly known as wrong surgery

Hospitals participating with BCBSNE Medicare Advantage are required to submit present-on-admission (POA) indicator information for all primary and secondary diagnoses, for both paper and electronic claims.  

The POA indicator is used to identify conditions present at the time the admission occurs, including those that develop during an outpatient encounter in settings that include the emergency department, observation or outpatient surgery. The POA indicator is not required on secondary claims.  

Certain code categories are exempt from POA indicator reporting requirements because either they are always present on admission or they represent circumstances related to the health care encounter or factors influencing health status that do not represent a current disease or injury.  

The following values should be used to indicate POA when submitting data: 

*Note: These values were established by CMS.  

On electronic claims, the POA data element must contain the letters POA followed by a single POA indicator for every diagnosis reported, as follows:  

• The POA indicator for the principal diagnosis should be the first indicator after the POA letters, followed by the POA indicators for the secondary diagnoses as applicable.
• The final POA indicator must be followed by either the letter Z or the letter X, to indicate the end of the data element.  

For paper claims, the POA indicator is the eighth digit of the principal diagnosis field in Form Locator 67 on the UB-04 claim and the eighth digit of each of the secondary diagnoses in Form Locator 67, A-Q.  

The policy on serious adverse events is administered as follows: 

• For DRG-reimbursed hospitals — BCBSNE uses the Medicare severity diagnosis-related groups (MS-DRG).
• When the member is readmitted to the same hospital and the admissions are combined — Hospitals should follow the current process for combining admissions:  
  • If the POA indicator is correctly reported as Y (indicating the condition was present on admission), there is no financial reduction.  
  • In cases in which the POA for the serious adverse event was N (indicating that the condition was not present on admission and that, therefore, the readmission was a direct result of the serious adverse event), the two cases are combined and only the first admission is reimbursed.  
• When the member is readmitted to the same hospital and the admissions are not combined — Any readmission with diagnosis associated with a serious adverse event during the initial admission may be selected for audit review to validate its presence on admission.  
• When the member is admitted to a different hospital — When an admission to a second hospital carries a POA indicator of Y but the treatment is that which is medically necessary to treat the adverse event, the second hospital is held harmless and is reimbursed for the admission.  
• When claims are submitted with an invalid POA — Claims submitted with an invalid POA indicator are returned to the hospital for correction and are not entered into the BCBSNE claims system.  
• When treatment to correct the adverse event is rendered by a hospital or physician not responsible for the adverse event — In all cases, the second hospital and the second physician correcting the adverse event are held harmless. Because the treatment is medically necessary, they are reimbursed.