The Institute of Medicine landmark report, To Err is Human (1999), identified that between 44,000 and 98,000 deaths per year are caused by medical errors. To create incentives for hospitals to prevent certain types of medical errors, the Centers for Medicare & Medicaid Services (CMS) instituted a policy that reduces Medicare reimbursement for conditions the agency believes are hospital-acquired, and are not noted as “present on admission” in patient charts.

Many private-sector payers have followed CMS’ lead, and have begun to create “no pay” policies of their own. The CHA Board has adopted a partial payment or non-payment policy related to billing for preventable adverse events that are under the control of the hospital.

Adverse Events
The enactment of SB 1301 (Alquist) in 2006 requires general acute-care hospitals, psychiatric hospitals, and special hospitals to report specified adverse events to the California Department of Health Services (CDHS). In general adverse events are events that cause the death or serious disability of patients and include the surgical events, product or device events, patient protection events, care management events, environmental events, criminal events, and other events.