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Payment Policies for Inpatient Facility Claims - UB-04

Claim Processing for Hospital-Acquired Conditions and Never Events

Wellmark does not reimburse hospitals for inpatient services identified on a claim as being related to hospital-acquired conditions or never events. This became effective with admissions on and after January 1, 2010.


The following information explains:

  • How to report hospital-acquired conditions or never events.
  • How Wellmark processes such services, which varies with a hospital's payment arrangement and the member's coverage.

Reporting Events

  • Hospital-Acquired Conditions
    For a complete list of hospital-acquired conditions and corresponding diagnosis codes, please visit the Centers for Medicare & Medicaid Services (CMS) Web site .
  • Never Events
    Never events are reported with one of the following diagnosis codes as a secondary diagnosis (form locator 67A-H). Do not report in an External Cause of Injury form locator (72 A-C):
    • E876.5 - Performance of wrong operation (procedure) on correct patient
    • E876.6 - Performance of operation (procedure) on patient not scheduled for surgery
    • E876.7 - Performance of correct operation (procedure) on wrong side/body part

Claims Processing

All Wellmark products: Wellmark will identify inpatient claims with hospital-acquired conditions and never events quarterly.  Wellmark members' claims will be adjusted as follows:

  • Hospital Acquired Conditions
    APR-DRG (All Patient Refined Diagnosis Related Groups) hospitals:
    • A diagnosis with a Present on Admission (POA) indicator of "N" (diagnosis not present at admission) or "U" (documentation insufficient to determine) will be removed from the claim. The claim will be adjusted to the resulting APR-DRG payment.
    • A diagnosis with POA Indicator of "1" (unreported/not used) will be reviewed for appropriate payment with medical record documentation. The claim may be adjusted to the resulting APR-DRG payment, based on the results of the review

  • Non-APR-DRG hospitals:
    • Wellmark will instruct the hospital to resubmit the claim after removing the charges related to the hospital-acquired condition(s). Once the new claim is received, Wellmark will adjust its reimbursement.
  • Never Events
    All hospitals: 
    • The entire claim will be denied and the payment recouped.

Federal Employee Program (FEP): All FEP members' claims with hospital-acquired conditions and never events will be identified upon receipt, and the claims will be reviewed and handled as described above as the claim is processed.  FEP excludes Medicare-Certified Critical Access Hospitals and Skilled Nursing Facilities from the process.


Denials or reduced payment due to hospital-acquired conditions or never events are the hospital's liability.


Post-Pay Audits: Wellmark pays for inpatient services based on a per case basis and percentage of charge, depending on the hospital. Wellmark has contracted with Inpatient Claims Review Services (ICRS) to perform post-pay audits for inpatient services. 


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