Provider Preventable Conditions

Section 2702 of the Patient Protection and Affordable Care Act reduces or prohibits payments to health care providers for Medicaid services rendered as a result of certain preventable health care acquired illnesses or injuries. AHCCCS providers will be required to comply with these federal provisions beginning July 1, 2012. AHCCCS and its contracted Managed Care Organizations will review and process medical claims utilizing the list of provider preventable conditions and surgical errors.


The Centers for Medicare and Medicaid Services (CMS) issued a final rule implementing Section 2702 which reduces or prohibits payments related to provider preventable conditions. This rule builds on Medicare strategies that already reduce or prohibit hospital payments for preventable conditions, and also improves alignment between Medicare and Medicaid payment policies. Although the new rule gives States the flexibility to expand the list of preventable conditions that are not reimbursable, at this time Arizona will employ the list described by the Medicare National Coverage Determinations: surgery on the wrong patient, wrong surgery on a patient, and wrong site surgery.


A Provider-Preventable Condition (PPC) may be either of the following:

Health Care Acquired Condition (HCAC)

  • Applies only to Medicaid INPATIENT hospital settings; and
  • Is found in the following Medicare list of “Hospital Acquired Conditions”:
    • Retained foreign object following surgical procedures
    • Air embolism
    • Blood incompatibility
    • Stage III and IV pressure ulcers
    • Injuries resulting from falls and trauma
    • Catheter associated urinary tract infections
    • Vascular catheter associated infections
    • Manifestations of poor glycemic control
    • Mediastinitis following coronary artery bypass graft (CABG) procedures
    • Surgical site infections following orthopedic surgery procedures involving spinal column fusion or re-fusion, arthrodeses of the shoulder or elbow, or other procedures on the shoulder or elbow
    • Surgical site infections following bariatric surgery procedures
    • Deep vein thrombosis or pulmonary embolism following total hip or knee procedures, except in pediatric or obstetrical patients


Other Provider-Preventable Condition (OPPC)

  • Applies to Medicaid INPATIENT OR OUTPATIENT healthcare settings; and
  • Includes any of the three Medicare National Coverage Determinations:
    • Surgery on the wrong patient
    • Wrong surgery on a patient
    • Surgery on the wrong site

Additional Information for Providers

Regulatory Updates