Provider-Preventable Conditions

Provider Type

  • Physicians 
  • Participating Physician Groups (PPG)
  • Hospitals

Section 2702 of the federal Affordable Care Act (ACA) requires all providers to report all provider-preventable conditions (PPCs) that occur during treatment of Medi-Cal beneficiaries that did not exist prior to the provider initiating treatment and regardless of whether the provider seeks reimbursement for services to treat the PPC.

The Centers for Medicare & Medicaid Services (CMS) defines two types of PPCs:

  • Health care-acquired conditions (HCACs), also known as hospital-acquired conditions (HACs). These should be reported on a UB-04 claim form when they occur in an inpatient acute care hospital, using designated ICD HAC codes with the accompanying not present on admission (POA) indicator code N.
  • Other provider-preventable conditions (OPPCs).These should be reported when they occur on a UB-04 or CMS-1500 claim form as billed procedure code modifiers in any health care setting related to a surgery or invasive procedure.

Unlike HCACs, OPPCs are not confined to an inpatient setting but may occur in either an inpatient or outpatient setting. Outpatient settings include hospitals, outpatient departments, clinics, ambulatory surgical centers (ASCs), federally qualified health centers (FQHCs), and physicians' offices. CMS and the Department of Health Care Services (DHCS) identify three OPPCs for Medi-Cal:

  • Surgery/invasive procedure performed on the wrong body part
  • Surgery/invasive procedure performed on the wrong patient
  • Wrong surgery/invasive procedure

Affected Providers

Inpatient acute care hospitals must report all PPCs and OPPCs. All other facilities that conduct surgery or invasive procedures only report OPPCs. If a facility has both an acute inpatient care hospital unit and a skilled nursing facility (SNF) unit, the facility must report PPCs and OPPCs.

Reporting Instructions

DHCS requires providers to actively report all PPCs for Medi-Cal beneficiaries on the DHCS secure online reporting portal. Providers must report all PPCs when the provider first learns the patient had a PPC and confirms the patient is a Medi-Cal beneficiary. DHCS understands this might be after the patient has been discharged, including discovery during coding and billing.

After completing the online form, providers can use the Print Screen button to create a paper copy for submission to Health Net. Providers must fax this information to Health Net Clinical Review Unit via secure fax at 1-877-808-7024. Providers must include a fax coversheet and mark it Protected Health Information: Confidential.


PPCs are found on the designated ICD HAC Lists, as follows:

Present-On-Admission Indicators

The POA indicator is a required field on the UB-04 and defines whether the condition was present at the time of admission or occurred during the inpatient hospital stay. The POA indicator N must be assigned to HAC-identified ICD diagnosis code sets on all inpatient claims.

OPPC Modifiers

Providers must also report OPPC modifiers in any health care setting on the UB-04 and CMS-1500 using the appropriate modifier below:

  • PA - Surgery/invasive procedure performed on the wrong body part
  • PB - Surgery/invasive procedure performed on the wrong patient
  • PC - Wrong surgery/invasive procedure

Payment Reduced or Prohibited

Section 2702 of the ACA reduces or prohibits payments to health care providers for PPCs and OPPCs. To comply with CMS's ruling and guidance from DHCS, Health Net and its delegated participating physician groups (PPGs) are required to evaluate claims as follows.


Health Net and its delegated PPGs evaluate UB-04 inpatient acute hospital claims, specific to billed PPCs (ICD HAC Codes), identifying PPCs that are ineligible for payment. Based on All Patient Refined Diagnosis Related Groups (APR-DRG), the reimbursement methodology payment is adjusted to reflect non-reimbursement for the HAC.


Health Net and its delegated PPGs evaluate all procedure claims (UB-04 and CMS-1500), specific to OPPC Modifiers (PA, PB and PC), and do not reimburse for the services rendered.

Health Net or its delegated PPG informs the submitting provider of nonpayment of PPC-related services, when applicable, via a notification transmitted with the Remittance Advice.