Health Information Management

NCDs clarify how to identify and report never events

JustCoding News: Inpatient, October 14, 2009

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Inpatient!

Even though never events should never happen, there are occasions when they do. Providers continue to have questions regarding how to address them in the unlikely event they occur.

CMS released three national coverage determinations (NCD) earlier this year that included instructions for provider claims processing and some clarification regarding the following three never events:

  • Wrong surgical or other procedure performed on a patient
  • Surgical or other invasive procedure performed on the wrong body part
  • Surgical or other invasive procedure performed on the wrong patient

CMS implemented the NCDs July 6 for Medicare Part B Medicare Administrative Contractors (MAC) and carriers. CMS also implemented NCDs for Medicare Part A MACs, fiscal intermediaries (FI), and the Fiscal Intermediary Standard System on October 5.

Note that on September 25, CMS replaced Transmittal 1778 with Transmittal 1819 in the Medicare Claims Processing Manual. The new transmittal provides several technical clarifications. 

Know billing instructions
The NCDs have more clearly defined what CMS will cover, says Keith Siddel, MBA, PhD (c), president and CEO of HRM in Creede, CO. For example, if a physician performs a knee surgery on the wrong knee, he or she still needs to perform the surgery on the correct knee. Even though the physician made a serious error by operating on the wrong leg, CMS will pay for the procedure performed on the correct leg.

For inpatient claims, CMS instructs providers to submit two claims—one for the never event, and one for the correct procedure. Billers should use a “no-pay” claim (type-of-bill [TOB] 110) to report all services the hospital provided relative to the never event. They should use TOB 11X (whichever form is appropriate) to report all services unrelated to the never event.

On the TOB 110, billers should indicate in form locator 80 (the remarks section) which never event occurred using one of the following two-character alpha codes:

  • MX: Wrong surgical or other procedure performed on a patient
  • MY: Surgical or other invasive procedure performed on the wrong body part
  • MZ: Surgical or other invasive procedure performed on the wrong patient

Even though CMS won’t pay for the never event, the agency is interested in its occurrence and associated cost, Siddel says.

Identify never events
In addition to clarifying how providers should report never events, the NCDs also outline how they should identify never event scenarios. Before surgery, a patient signs a consent form detailing the specific type and site of the surgery.

If the physician performs a surgery that deviates from that consent form, CMS considers it a never event. When it is not on the consent form, CMS considers it the wrong surgery.

Physicians must ensure that they perform only what is on the consent form. For example, if a surgeon is operating on a patient’s arm, but notices an easily removable lesion, he or she may be inclined to remove it rather than require the patient to return for another procedure.

If the physician removes the lesion, and that specific procedure is not on the signed consent form, CMS will consider it a wrong surgery. “It needs to be on the consent form, even if the patient is okay with it afterward,” says Siddel.

Emergency services are an exception. According to the Medicare Claims Processing Manual, “Emergent situations that occur in the course of surgery and/or whose exigency precludes obtaining informed consent are not considered erroneous under this decision.”

Address unanswered questions
Providers have also questioned what to do when patients present to the hospital after receiving care related to a never event that occurred at a different hospital. For example, a physician in hospital A performs the wrong procedure on a patient, and the patient gets an infection that manifested from that surgery. The patient decides to visit nearby hospital B for treatment. Since the never event that occurred in hospital A caused the infection, will hospital B be penalized for it as well? How will hospital B know a never event caused the infection?

In the NCDs, CMS instructs MACs to flag the patient’s file so they can track any services a provider performs on a patient related to a never event.

However, CMS still has not clarified whether hospital B would be paid in this type of circumstance, Siddel says. “I think what will happen is that MACs will pay hospital B for the claim, but deduct the money from hospital A,” he says.

Develop a response process
It’s important for hospitals to have a process in place regarding never events, says John Steiner, Esq., chief compliance officer at UK HealthCare in Lexington, KY.

“There are numerous support areas that need to figure out how to work together—risk management, compliance, legal, patient accounts, coding, etc.,” Steiner says.

There are several steps Steiner says providers can take to ensure that they are prepared:

  • Designate a never event response team that includes physician leadership, a compliance officer, nursing leadership, operations management, quality and risk management, legal, HIM, and finance.
  • Ensure that all policies regarding never events are up to date and include all scenarios that CMS lists as never events.
  • Focus on patient safety and prevention, and provide education for new and existing staff members regarding never events to increase awareness.
  • Ensure that all appropriate forms and occurrence reports are updated and available for use.

Providers also need to ensure that everyone is aware of and understands the three NCDs discussed in this article. Better internal communication will help ensure that everyone is compliant with what the NCDs require, Steiner says.

Editor’s note: E-mail Siddel at

E-mail Steiner at

This story was originally published in the September issue of Briefings on Coding Compliance Strategies.

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Inpatient!

Most Popular