Coverage Denied for Never Events

Date Issued: 8/19/2010

(Applies to all ASOs, EmblemHealth, GHI and HIP lines of business.)

Since January 1, 2010, EmblemHealth and its companies GHI and HIP has denied all claims submitted for never events. The Centers for Medicare and Medicaid Services (CMS) no longer covers surgical or other invasive procedures for the treatment of medical conditions when such procedures are performed in error by a practitioner or group of practitioners. These errors are known collectively as never events. The CMS ruling became effective on January 15, 2009. As a result of the CMS decision, EmblemHealth has determined that we no longer pay for never events in any line of business as of January 1, 2010.

Surgical and other invasive procedures are defined as operative procedures in which skin or mucous membranes and connective tissue are cut into or an instrument is introduced through a natural body opening. Procedures range from the minimally invasive to major surgeries. This applies to all procedures found in the surgery section of the Current Procedural Terminology (CPT) coding. It does not include use of instruments such as otoscopes for examinations or very minor procedures such as drawing blood.

Never event errors include:

  • Performing a different procedure altogether
    A surgical or invasive procedure is considered to be the wrong procedure if it is not consistent with the correctly documented informed consent for the patient.
  • Performing the correct procedure on the wrong body part
    A surgical or other invasive procedure is considered to have been performed on the wrong body part if it is not consistent with the correctly documented informed consent for the patient. This includes surgery on the appropriate body part, but in the wrong place, for example, operating on the left arm versus the right or on the left kidney not the right, or at the wrong level (spine).
  • Performing the correct procedure on the wrong patient
    A surgical or other invasive procedure is considered to have been performed on the wrong patient if that procedure is not consistent with the correctly documented informed consent for that patient.

Related Services
All related services provided during the same hospitalization in which the error occurred are not covered for either CMS or EmblemHealth companies. We also do not cover other services related to these noncovered procedures as defined in the Medicare Benefit Policy Manual (BPM):

  • All services provided in the operating room when such an error occurs are considered related.
  • All providers who could bill individually for their services and who are in the operating room when the error takes place are not eligible for payment.
  • Related services do not include performance of the correct procedure after the never event has occurred.

NOTE: Emergent situations that change the plan in the course of surgery and/or whose exigency precludes obtaining informed consent are not considered erroneous under the CMS ruling. This also includes the discovery of new pathologies near the surgery site, if the risk of a second surgery outweighs the benefit of patient consultation, or the discovery of an unusual physical configuration (e.g., adhesions, extra vertebrae, etc.).

Medicaid and Family Health Plus Never Events
For surgeries performed on patients enrolled in Medicaid or Family Health Plus (FHP), the New York State Department of Health has identified 13 avoidable hospital conditions as non-reimbursable:

  1. Surgery performed on the wrong body part
  2. Surgery performed on the wrong patient
  3. Wrong surgical procedure performed on a patient
  4. Patient disability associated with a medication error
  5. Patient disability associated with use of contaminated drugs, devices, biologics provided by a health care facility
  6. 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
  7. Patient disability associated with an electric shock while being cared for in a health care facility
  8. 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
  9. Patient disability associated with a burn incurred from any source while being cared for in a health care facility
  10. Patient disability associated with the use of restraints or bed rails while being cared for in a health care facility
  11. Retention of a foreign object in a patient after surgery or other procedure
  12. Patient disability associated with a reaction to administration of ABO-incompatible blood or blood products
  13. Patient disability associated with intravascular air embolism that occurs while being cared for in a health care facility

The Department of Health will continually review this list of non-reimbursable adverse (never) events. The list will be modified and expanded over time.

Medicaid and FHP Hospital Partial Payment Procedure
For those Medicaid and Family Health Plus cases where a serious never event occurs and the hospital anticipates at least partial payment for the admission, the hospital will follow a two-step process for billing the admission:

  1. The hospital will first submit their claim for the entire stay in the usual manner, using the appropriate rate code (i.e., rate code 2946 for DRG claims or the appropriate exempt unit per diem rate code such as 2852 for psychiatric care, etc.). That claim will be processed in the normal manner and the provider will receive full payment for the case.
  2. Once remittance for the initial claim is received, it will be necessary for the hospital to then submit an adjustment transaction to the original paid claim using one of the following two new rate codes associated with identification of claims with serious adverse (never) events:
  • 2591 (DRG with serious adverse events), or
  • 2592 (Per Diem with serious adverse events)

All claims identified as never events will be reviewed on a case by case basis.

A fuller explanation of never events and the new ruling may be found on the CMS Web site. Information about never events may also be found in the EmblemHealth Provider Manual, under Claims. If you have additional questions, you may also e-mail them to mdq&adownstate@emblemhealth.com if you practice in New York City, Long Island or Westchester County. For upstate counties, please send your e-mails to mdq&aupstate@emblemhealth.com.