Department of Health and Human Services
OFFICE OF 
   
INSPECTOR GENERAL 
 
 
 
 
 
 
 
A E H :
DVERSE  VENTS IN  OSPITALS  
 
 
C S I
ASE  TUDY OF  NCIDENCE 
 
A  M
MONG  EDICARE 
 
B T
EN  EFICIARIES IN  WO 
 
S C  
ELECTED  OUNTIES
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
December 2008 
OEI-06-08-00220   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse hospitalizations involving HHS programs, including False 
Claims Act, program exclusion, and civil monetary penalty hospitalizations.  In connection 
with these hospitalizations, OCIG also negotiates and monitors corporate integrity 
agreements.  OCIG renders advisory opinions, issues compliance program guidance, 
publishes fraud alerts, and provides other guidance to the health care industry concerning 
the anti-kickback statute and other OIG enforcement authorities.   
   
 E X E C U T I V E   S U M M A R Y  
OBJECTIVE
 
To estimate the incidence of adverse events for hospitalized Medicare 
beneficiaries in two selected counties.  
BACKGROUND 
The term adverse event describes harm to a patient as a result of 
medical care, such as infection associated with use of a catheter.  The 
term never events refers to a specific list of serious events, such as 
surgery on the wrong patient, that the National Quality Forum (NQF) 
deemed should never occur in a healthcare setting.  The Tax Relief 
and Health Care Act of 2006 (the Act) mandates that the Office of 
Inspector General (OIG) report to Congress regarding the incidence of 
never events among Medicare beneficiaries, payment by Medicare or 
beneficiaries for services in connection with such events, and Centers 
for Medicare & Medicaid Services (CMS) processes to identify events 
and deny payment.  This report is one in a series to fulfill requirements 
in the Act.  OIG work on this topic will continue through 2009.   
We reviewed a random sample of 278 hospitalized Medicare 
beneficiaries selected from all beneficiaries hospitalized in two selected 
counties during a 1-week period in August 2008.  Physician reviewers 
determined whether an adverse event occurred, whether the event was 
on NQFs list of Serious Reportable Events or CMSs list of  
hospital-acquired conditions, and the level of harm to the patient based 
on an established harm scale.  To establish an estimated adverse event 
incidence rate, we included events on the NQF and CMS lists and also 
events resulting in the most serious categories on the harm scale 
(prolonged hospital stay, permanent harm, life-sustaining intervention, 
or death).  We also determined whether events on the NQF and CMS 
lists caused higher Medicare reimbursement.  Lastly, we identified 
additional events that resulted in temporary patient harm but were not 
comparable to the more serious events in our overall rate.   
FINDINGS 
Fifteen percent of hospitalized Medicare beneficiaries in two 
selected counties experienced an adverse event during their 
hospital stays.  Of the 278 Medicare beneficiaries in our sample,  
41 experienced an adverse event during their hospital stay that met one 
or more of our three criteria for an estimated adverse event rate of  
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E X E C U T I V E   S U M M A R Y  
15 percent.  Six of these forty-one patients experienced multiple adverse 
events, for a total of 51 adverse events.  Incidence rates for adverse 
events that met our three criteria were as follows:  fewer than 1 percent 
of beneficiaries experienced an adverse event on NQFs list of Serious 
Reportable Events, 4 percent experienced an adverse event on CMSs 
list of hospital-acquired conditions, and 13 percent experienced an 
adverse event resulting in the four most serious categories on the 
patient harm scale.  (Some adverse events met more than one criterion.)  
Of adverse events on CMSs list of hospital-acquired conditions and 
NQFs list of Serious Reportable Events, only one resulted in higher 
Medicare reimbursement to the hospital.   
Identified adverse events illustrate differences in the lists and 
criteria that define adverse events.  A difficulty in determining 
adverse events incidence rates involves differences in the definitions 
used by various entities.  The NQF list of Serious Reportable Events 
and the CMS list of hospital-acquired conditions often address the same 
adverse event but define the event differently.  For example, our sample 
included two adverse events involving poor glycemic control, both of 
which resulted in serious harm.  However, because of differences in the 
way specific adverse events are defined, one case met the criteria of 
NQFs list and the other met the CMS criteria.    
An additional 15 percent of Medicare beneficiaries in the two 
selected counties experienced events during their hospital stays 
that resulted in temporary harm.  In addition to the adverse events 
previously discussed, another 15 percent of Medicare beneficiaries 
experienced events classified as temporary harm requiring medical 
intervention.  This category of harm represents a wide array of events, 
from swelling at a treatment site to low-level infections.  In some cases, 
the events resulted from standard medical treatment that caused an 
undesirable outcome in the patient, such as an allergic reaction to 
medication.  Because these temporary events did not prolong the 
hospital stay or result in permanent harm, they are not included in our 
overall rate of adverse events.  However, these events are of interest to 
hospitals and others seeking to improve patient safety because they are 
potential indicators of patient care problems and/or improvement 
opportunities.  For a number of these patients, physician reviewers 
indicated that these temporary harm events could have developed into 
more serious adverse events with a greater degree of harm without 
timely intervention.     
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E X C U T I V E   S U M M A R Y  
CONCLUSION 
The Act requires that OIG report to Congress regarding harm caused in 
health care settings.  This study is one of several designed to meet this 
mandate, providing an estimate of the incidence of adverse events 
among hospitalized Medicare beneficiaries in two selected counties.   
Although these results are not nationally representative, the extent of 
adverse events and temporary harm found in this case study 
substantiates concerns about the incidence of adverse events in 
hospitals and the importance of safety initiatives to reduce occurrences.  
Our analysis also calls attention to the difficulty of determining what 
events should be considered in an adverse event incidence rate and how 
those events should be identified and defined. 
The Act also directs OIG to make recommendations for such legislation 
and administrative action as OIG determines is appropriate.  The Act 
specifically authorized funding to continue through calendar year 2009 
and OIG will devote this funding to additional studies involving adverse 
events.  Future reports in this series will include recommendations as 
appropriate. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
We received positive comments on a draft of this report from the Agency 
for Healthcare Research and Quality and from CMS.  CMS reiterated its 
policies to encourage the prevention of adverse events, including the 
provision to deny payment for care associated with hospital-acquired 
conditions, and indicated that OIG identification of hospital-acquired 
conditions and their effect on Medicare payment allowed for a deeper 
understanding of the payment policy in practice.  CMS also offered 
clarification regarding one of the hospital-acquired conditions, catheter-
associated urinary tract infection, and recommended further evaluation 
of this issue.  OIG agrees that further evaluation is warranted and will 
address this issue in future work in this series.  
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 T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
 
 
I N T RO DUC T IO N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 
 
 
F I N D IN G S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 
  Fifteen percent of beneficiaries experienced an adverse event. . . 10 
  Identified adverse events illustrate differences in definitions . . . 15 
  Beneficiaries had additional events causing temporary harm . . . 16 
 
 
CONC LUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 
  Agency Comments and Office of Inspector General Response . . . 20 
 
 
APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 
  A:  Tax Relief and Health Care Act of 2006. . . . . . . . . . . . . . . . . . 21 
  B:  Glossary of Selected Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 
  C:  National Quality Forum Serious Reportable Events. . . . . . . . 26 
D:  Centers for Medicare & Medicaid Services Categories of    
Hospital-Acquired Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 27 
  E:  Detailed Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 
  F:  Estimates and Confidence Intervals. . . . . . . . . . . . . . . . . . . . . 33 
G.  Tables of All Adverse Events and Temporary Harm Events 
Identified in Sample. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 
  H:  Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 
 
A C K NO WL E D G M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41   
 I N T R O D U C T I O N  
OBJECTIVE 
To estimate the incidence of adverse events for hospitalized Medicare 
beneficiaries in two selected counties.  
BACKGROUND 
Statutory Mandate and Office of Inspector General Response 
The Tax Relief and Health Care Act of 2006 (the Act) requires that the 
Office of Inspector General (OIG) study events that cause harm to 
Medicare beneficiaries.  The Act specifically mandates that OIG study 
the incidence of never events among Medicare beneficiaries, payment 
by Medicare or beneficiaries for services furnished in connection with 
such events, and administrative processes of the Centers for Medicare & 
Medicaid Services (CMS) to identify events and deny or recoup 
payment.  OIG is also to report to Congress on the study conducted, 
including recommendations for such legislation and administrative 
action as OIG determines is appropriate.  (For relevant text of the Act, 
see Appendix A.) 
Adverse Events in Hospitals 
Following a review of Medicare policies and expenditures, as well as 
consultation with CMS and the Agency for Healthcare Research and 
Quality (AHRQ), we chose to focus our work on inpatient acute care 
hospitals.  In 2006, 12.5 million Medicare beneficiaries were 
hospitalized,1 with inpatient hospital costs constituting the largest 
portion of Medicare expenditures (32 percent in 2006).2  Government 
agencies and private entities have also targeted hospitals for        
patient-safety initiatives. 
A variety of terms, lists, and definitions are used to identify and address 
health care events that result in patient harm.  (For a glossary of 
selected terms, see Appendix B.)  The National Quality Forum (NQF) 
used the term never event to describe a specific list of events 
associated primarily with patient death or serious disability that 
 
1 CMS, Statistics Book, Table IV.1:  Medicare/short-stay hospital utilization, 2008,       
p. 43.  Available online at 
http://www.cms.hhs.gov/CapMarketUpdates/Downloads/2008CMSStats_xls.pdf.  Accessed 
on November 12, 2008. 
2 Based on data contained in the Congressional Budget Office (CBO), Fact Sheet for 
CBOs March 2007 Baseline:  Medicare, March 7, 2007.  Available online at   
http://www.cbo.gov/budget/factsheets/2007b/medicare.pdf.  Accessed on September 8, 2008. 
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should never occur in a health care setting.3  NQF currently uses the 
term Serious Reportable Events to describe this list.  (For a list of 
NQF Serious Reportable Events, see Appendix C.)  Since enactment of 
the Act, patient safety issues have continued to receive much attention 
by policymakers, the health care industry, and patient advocates.  The 
term adverse events is now used more commonly than never events 
within the health care community to refer to harm experienced by a 
patient as a result of medical care.  As a result, and after consulting 
with selected congressional committee staff in 2007, OIG modified our 
approach and terminology to be consistent with evolving patient safety 
research and industry trends.  In doing so, we expanded our focus 
beyond the list of 28 never events specified by NQF to a broader view of 
adverse events causing harm to patients.   
The term adverse event describes harm to a patient as a result of 
medical care.  Although an adverse event indicates that the care 
resulted in an undesirable clinical outcome and may involve medical 
errors, adverse events do not always involve errors, negligence, or poor 
quality of care and may not always be preventable.4  As such, research 
and policy to ensure patient safety and reduce the occurrence of adverse 
events often focuses on identifying and addressing systemic problems 
that may lead to patient harm and avoids labeling the event as an 
outcome of negligence or poor quality. 
This broad definition of adverse events reflects not only a variety of 
possible causes of events, but also a wide range in their effect on 
patients.  Depending on their purpose, researchers, policymakers, and 
health care entities sometimes adopt different standards for 
distinguishing between degrees of patient harm in determining whether 
they classify an occurrence as an adverse event.  For example, NQFs 
list of Serious Reportable Events focuses on events that cause serious 
disability and death.  The National Coordination Council for Medication 
Errors Reporting and Prevention (NCC MERP) developed a scale to 
categorize the level of patient harm resulting from medication errors.  
The NCC MERP Index for Categorizing Errors considers factors such as 
whether the occurrences had any effect on the patient and, if so, the 
degree of harm (see Table 1).  The scale includes categories for 
 
3 NQF is a public-private membership organization created to develop and implement a 
national strategy for health care quality measurement and reporting.  The list is available 
online at http://www.qualityforum.org/about.  Accessed on October 21, 2008. 
4 R.M. Wachter, Understanding Patient Safety, McGraw-Hill, 2008. 
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circumstances or occurrences wherein harm did not reach the patient 
(categories A-D), often referred to as near misses, and those wherein 
the patient was actually harmed (categories E-I).  Researchers have 
modified this scale for use in measuring and distinguishing adverse 
events of all types, rather than only medication errors.5   
Table 1:  The National Coordinating Council for Medication Errors 
Reporting and Prevention Index for Categorizing Errors 
Category  Description  Event 
Circumstances or events occur that have the capacity 
A 
to cause error. 
An error occurred, but the error did not reach the 
B 
patient. 
Harm does 
An error occurred that reached the patient, but did not 
C  not reach 
cause patient harm. 
patient 
An error occurred that reached the patient and 
required monitoring to confirm that it resulted in no 
D 
harm to the patient, and/or required intervention to 
preclude harm. 
An error occurred that may have contributed to or 
E  resulted in temporary harm to the patient and required 
intervention. 
An error occurred that may have contributed to or 
F  resulted in temporary harm to the patient and required 
an initial or prolonged hospital stay.  Harm 
An error occurred that may have contributed to or  reaches 
G  resulted in permanent patient harm.  patient 
An error occurred that required intervention necessary 
H 
to sustain life. 
An error occurred that may have contributed to or 
I 
resulted in patient death. 
Source:  NCC MERP Index for Categorizing Errors, Press Release.  Medication Errors Council Revises 
and Expands Index for Categorizing Errors:  Definitions of Medication Errors Broadened, June 12, 2001. 
 
Medicare Payment for Adverse Events 
Medicare traditionally did not distinguish between costs incurred for 
treating existing illnesses and those incurred as the result of adverse 
events.  Medicare reimbursement to inpatient acute care hospitals is 
generally determined by grouping patient conditions into         
Diagnosis-Related Groups (DRG) based on the average cost of care for 
patients with similar conditions.  Historically, if a Medicare beneficiary 
experienced harm from an adverse event that resulted in assignment of 
 
5 F.A. Griffin and R.K. Resar, IHI Global Trigger Tool for Measuring Adverse Events, 
Institute for Healthcare Improvement Innovation Series 2007, pp. 45.    
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a more expensive DRG, CMS paid the full claim without any payment 
reduction.6   
Hospital-Acquired Conditions.  The Deficit Reduction Act of 2005 (DRA) 
required CMS to select at least two hospital-acquired conditions for 
which hospitals would not be paid higher Medicare reimbursement.7  
CMS issued a final regulation in August 2007 allowing it to deny 
hospitals higher payment for admissions complicated by any of eight 
categories of hospital-acquired conditions.  CMS chose the categories of 
conditions in collaboration with the Centers for Disease Control and 
Prevention and used the following criteria:   
  conditions that are high cost, high volume, or both; 
  conditions that, when present as a secondary diagnosis, result in 
assignment of a case to a DRG that has a higher payment; 
  conditions that could be reasonably prevented by using readily 
available evidence-based guidelines; and  
  conditions that are identifiable based on one or more unique 
diagnosis codes.8   
In July 2008, CMS issued a final rule expanding the list of  
hospital-acquired conditions to 10.  Effective October 1, 2008, CMS 
began denying hospitals higher payment for Medicare admissions 
complicated by these conditions.9  For the list of CMS categories of 
hospital-acquired conditions, see Appendix D. 
Changes to CMS Payment.  In addition to designating the list of 
hospital-acquired conditions, the FY 2008 Inpatient Prospective 
Payment System Rule implemented a more specific list of DRGs called 
Medicare Severity Diagnosis-Related Groups (MS-DRG).  MS-DRGs 
split some of the prior DRGs into two or three individual classes based 
 
6 U.S. Department of Health and Human Services, CMS, Press Release, Eliminating 
Serious, Preventable, and Costly Medical Errors  Never Events, May 18, 2006.  Available 
online at http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1863.  Accessed on     
August 28, 2008. 
7 DRA,  5001(c), P.L. No. 109-171 (adding Social Security Act,  1886(d)(4)(D);                
42 U.S.C.  1395ww(d)(4)(D)), provided for a quality adjustment in DRG payments for 
certain hospital-acquired conditions. 
8 Social Security Act,  1886(d)(4)(D)(iv); Fiscal Year (FY) 2008 Final Inpatient 
Prospective Payment Systems (IPPS) Rule, 72 Fed. Reg. 47130, 47202 (Aug. 22, 2007). 
9 Social Security Act,  1886(d)(4)(D)(i); FY 2009 Final IPPS Rule, 73 Fed. Reg. 48434, 
4847148472 (Aug. 19, 2008). 
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on the presence of a complication or comorbidity.10  Beginning     
October 1, 2007, each medical diagnosis (ICD-9-CM) code11 submitted 
must include a new indicator designating whether the condition is 
present on admission (POA).12   
Determining the Incidence of Adverse Events in Hospitals  
Research indicates that calculating the incidence of adverse events is a 
complex and difficult task and that no single method is likely to identify 
all adverse events.13  Further, researchers often use different definitions 
and methods, making comparison of adverse event incidence rates 
problematic.  Through a literature review, we identified the following 
prominent methods for identifying adverse events in hospitals: 
Patient Survey or Interview.  A number of studies have sought to identify 
adverse events by asking patients and their families whether they 
detected any problems during their hospital stays, typically through 
interviews or mail surveys.  This information is considered most useful 
when patients or families are asked about events shortly after they 
occur.  Disadvantages associated with patient surveys include low 
response rates, poor recollection by patients, and lack of understanding 
of adverse events or the expected course of treatment.   
Administrative Data Screening.  Automated programs can be used to 
review administrative data, such as payment claims and hospital 
discharge data, to identify possible adverse events.  Using 
administrative data allows researchers to screen for adverse events 
among large numbers of hospitalizations.  Prominent administrative 
data screening methods include: 
  Patient Safety Indicators (PSI) Algorithms:  AHRQ developed 
software programs to calculate PSIs using administrative data and 
distributes this software free of charge to hospitals and researchers.  
The software is based on a series of algorithms using data commonly 
available in administrative datasets, such as billing data.  These 
 
10 42 CFR  412.10; Final FY 2008 IPPS Rule, 72 Fed. Reg. 47130, 47138 (Aug. 22, 2007).   
11 The ICD-9-CM system assigns diagnoses and procedure codes associated with 
hospitalizations and is maintained jointly by the National Center for Health Statistics 
(NCHS) and CMS.  NCHS, The International Classification of Diseases, 9th Revision, 
Clinical Modification (ICD-9-CM), Sixth Edition, was issued for use beginning           
October 1, 2007.  
12 Social Security Act,  1886(d)(4)(D)(iii). 
13 E.J. Thomas and L.A. Peterson, Measuring Errors and Adverse Events in Health 
Care, Journal of General Internal Medicine, 18(1), 2003, pp. 6167. 
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algorithms detect indicators (e.g., death in a low-risk patient) to help 
identify potential adverse events.   
  Identification of POA Indicators:  POA codes were added as a 
requirement for Medicare billing data in August 2007 to facilitate 
CMSs implementation of the new policy for nonpayment of certain 
hospital-acquired conditions.  Hospitals include these indicators 
with each diagnosis code, allowing analysts to identify conditions 
that developed during the hospital stay.   
Review of In-Hospital Incident Reports.  Hospitals must measure, analyze, 
and track quality indicators, including adverse patient events, as a 
condition of participation for Medicare and Medicaid certification.14  To 
accomplish this, hospital staff typically complete in-house incident 
reports when notable events occur.  For example, a hospital may 
require staff to complete an incident report if a patient falls.  Hospital 
managers can use information contained in incident reports to gain 
awareness of quality improvement needs and address substandard care.  
Although incident reports are likely a valuable source of information, 
research indicates that not all events are reported.   
Medical Record Screening.  Although it is not a complete medical record 
review, medical record screening can identify potential adverse events 
based on information in the medical record.  One prominent screening 
tool, the Institute for Healthcare Improvement (IHI) Global Trigger Tool 
(GTT), uses a retrospective review of medical records to identify 
triggers that could signal patient harm.15  The GTT also categorizes 
the level of harm using the NCC MERP patient harm scale.  The 
purpose of the NCC MERP index is to track errors in a consistent, 
systematic manner.16  IHI adapted the index for use as part of the  
GTT to classify harm associated with adverse events.   
Medical Record Review.  Medical record review is often considered the 
most definitive method for detecting adverse events because it can 
provide much detail about both the adverse event and the surrounding 
 
14 42 CFR  482.21(a)(2). 
15 Some triggers are adverse events by definition.  Additionally, reviewers may identify 
adverse events without a trigger and may find triggers that are not adverse events. 
16 NCC MERP, Press Release. Medication Errors Council Revises and Expands Index 
for Categorizing Medication Errors:  Definitions of Medication Errors Broadened, June 12, 
2001.  Available online at http://www.nccmerp.org/press/press2001-06-12.html#index.  
Accessed on October 14, 2008. 
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circumstances.  For example, medical record reviews can provide 
information about the patients condition prior to and following the 
event.  However, researchers report that records often have incomplete 
descriptions and insufficient documentation.17  Also, record reviews rely 
on the subjective judgment of the reviewer, and conditions caused by 
adverse events can be difficult to distinguish from preexisting or 
unpreventable conditions.    
METHODOLOGY 
Scope 
In this report, we provide an estimated rate of adverse events for 
Medicare beneficiaries discharged from hospitals in two counties during 
a 1-week period in August 2008, as well as specific rates of incidence for 
adverse events included on NQFs and CMSs lists.  To determine a 
meaningful rate of adverse events, we incorporated criteria developed 
by NQF, CMS, and NCC MERP.  We included in our analysis all patient 
harm that occurred during the hospitalization, regardless of whether it 
was preventable.  We conducted these activities during AugustOctober 
2008.  For a detailed description of our methodology, see Appendix E. 
Sample Selection 
To determine adverse event incidence rates, we sampled Medicare 
hospital discharges within two counties in different States.18  From each 
of the population of 24 hospitals in the two counties, we obtained lists of 
all Medicare-enrolled beneficiaries who were discharged during the 
week of August 1016, 2008.  From a combined list of 2,549 hospital 
discharges, we randomly selected a total of 310 Medicare 
hospitalizations.  Unless otherwise noted, results in this report are 
projected to all eligible discharges from the 24 hospitals during the 
sampled week.  We determined that 32 sample hospitalizations were 
ineligible for review, typically because the Medicare beneficiary was not 
an inpatient for at least 24 hours.  A total of 278 sample hospitalizations 
met our criteria for review and are the focus of this report.  Among 
the 278 Medicare beneficiaries in the sample, the average age was 
 
17 M.M. Rosenthal, P.L. Cornett, K.M. Sutcliffe, and E. Lewton, Beyond the Medical 
Record:  Other Modes of Error Acknowledgment, Journal of General Internal Medicine, 
20(5), May 2005, pp. 404409.  Abstract available online at  
http://www.ncbi.nlm.nih.gov/pubmed/15963161.  Accessed on October 10, 2008. 
18 Because the Act stipulates that OIG shall not release facility-specific information, we 
do not name the counties in this report.   
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77 years, with a range of 24 to 102 years; and the average length of 
hospitalization was 6 days, with a range of 1 to 53 days.   
Analysis 
We conducted a two-stage review to identify adverse events.  The first 
stage included five distinct screening processes designed to identify 
sampled hospitalizations that appeared likely to include an adverse 
event.  The screening processes included: 
  beneficiary interviews, 
  administrative data screening using AHRQs PSI program, 
  analysis of POA indicators included in administrative billing data, 
  reviews of hospital incident reports related to the hospitalization, 
and  
  targeted medical record screening using the IHI GTT protocol.  
For the second stage of review, we included only hospitalizations with 
potential adverse events flagged by one or more of these screening 
processes.  This stage consisted of a full physician review of the medical 
record.  The use of multiple screening processes allowed us to test the 
utility of various screening methods in preparation for future work to 
determine a national adverse events incidence rate.  The screening 
processes also allowed us to reduce the number of hospitalizations 
requiring medical record review by a physician.   
In the second stage of review, contracted physicians conducted an onsite 
medical review (183 hospitalizations were flagged for this stage of 
review).  The medical review protocol included a review of the 
information from the five screening processes for the flagged 
hospitalizations and the full medical record.  Physician reviewers 
completed a structured medical review protocol that required them to 
describe the adverse event, the documentation that led to their 
identification of the event, and the level of harm to the patient using the 
NCC MERP harm scale.  We include in this report only adverse events 
identified or confirmed by the physician reviewers. 
Based on the results of the physician medical record review, we 
calculated adverse event incidence rates as the proportion of Medicare 
beneficiaries with at least one qualifying adverse event.  To calculate an 
overall adverse event incidence rate, we focused on the areas of interest 
outlined in the Act:  serious adverse events that may have payment 
implications for Medicare or beneficiaries.  Therefore, we calculated an 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  8   
III NNN TTT RRR OOO DDD UUU CCC TTT III OOO NNN    
overall adverse event incidence rate to include events meeting any of 
the following criteria:   
1.  NQFs list of Serious Reportable Events, as the Act mandates; 
2.  CMSs list of hospital-acquired conditions; and 
3.  level of patient harm determined by physicians to have resulted in 
a prolonged hospital stay, permanent harm, life-sustaining 
intervention, or death (classified as FI on the NCC MERP scale). 
This overall adverse event incidence rate does not include events that 
physician reviewers identified as temporary harm events (classified as 
E-level of harm on the NCC MERP scale).  We excluded these 
temporary harm events from our overall rate because we determined, in 
consultation with physician reviewers, that the effect of these 
events was not comparable to the more serious events meeting the three 
criteria.  We calculated a separate incidence rate for these temporary 
harm events, as well as separate rates for the NQF list, the CMS list, 
and the events classified as F-I on the NCC MERP scale.  
We also analyzed administrative billing data for adverse events that 
were included on NQFs or CMSs list.  We calculated the effect of 
adverse events on Medicare payment using CMSs MS-DRG Assignment 
with Medicare Code Editor V25.  We did not calculate the effect on 
Medicare payment for adverse events not on the CMS or NQF lists.    
Limitations 
Findings from this study are limited to the particular geographic area 
and timeframe covered by our review and cannot be generalized to the 
Medicare population at large.  Further, it is unlikely that our 
methodology identified all adverse events within our sample.  The 
screening processes may have failed to flag adverse events and we 
included adverse events only when the medical record confirmed the  
event.  In some cases, missing information in medical records, if 
available, may have identified additional instances of adverse events.  
Quality Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency. 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  9   
 F I N D I N G S  
Fifteen percent of hospitalized Medicare beneficiaries  Of the 278 Medicare beneficiaries in 
in two selected counties experienced an adverse event  our sample, 41 experienced an 
during their hospital stays  adverse event during their hospital 
stays that met at least one of our 
criteria:  events on NQFs list of Serious Reportable Events, events on 
CMSs list of hospital-acquired conditions, or events involving a 
prolonged hospital stay, permanent harm, life-sustaining intervention, 
or death (classified as F-I on the NCC MERP scale).  This overall rate 
does not include events that cause only temporary harm to patients 
because we determined these events were not comparable to the more 
serious events included in the rate.  
After applying statistical methods, we project an estimated 15 percent 
adverse event incidence rate for the two counties (see Appendix F for 
confidence intervals).  Six of these forty-one hospital patients 
experienced multiple adverse events, for a total of 51 adverse events.  
Table 2 lists the number of events, number of affected Medicare 
beneficiaries, and incidence rate for each of the three criteria.   
Table 2:  Incidence of Adverse Events Among Medicare Beneficiaries in Two 
Selected Counties 
Sample  Projected 
Number of  Number of  Percentage 
Identified  Medicare  of Medicare 
Category of Events  Events  Beneficiaries  Beneficiaries 
3  2  0.7% 
NQF Serious Reportable Events 
11  10  3.7% 
CMS Hospital-Acquired Conditions 
43  36  13.2% 
NCC MERP F-I Level Events 
(6)  (7)  (2.6%) 
(Overlapping Events)* 
           Total  51  41  15.0% 
Source:  OIG analysis of 278 Medicare beneficiary hospitalizations in two selected counties, 2008. 
*Some adverse events met more than one criterion and overlap the three categories. 
 
We grouped the 51 adverse events into four broad categories:  
complications associated with surgery or other hospital procedures     
(43 percent), hospital-acquired infections (35 percent), medication-
related events (12 percent), and events related to patient care             
(10 percent).  Table 3 lists the 51 adverse events by these four clinical 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  10   
F I N D I N G S  
categories.  For a list of all adverse events with more complete 
definitions and the associated level of harm, see Appendix G. 
Table 3:  Adverse Events Identified Among Hospitalized Medicare 
Beneficiaries in Two Selected Counties by Type (n = 51) 
Adverse Events   
  and Percentage  
Types of Adverse Events  of Total Events 
Events Related to Surgery or Other Procedures  22 (43%) 
Excessive bleeding following surgery or procedure  4 
Respiratory complications related to surgery or procedure  4 
Postoperative ileus  4 
Cardiac complications related to surgery or procedure  3 
Hypotension/blood loss  3 
Blood clots and other occlusions related to surgery or procedure  2 
Post colostomy bowel obstruction  1 
Premature extubation causing respiratory failure  1 
Hospital-Acquired Infections  18 (35%) 
Urinary tract infection associated with Foley catheter  6 
Surgical infection  3 
Respiratory infection (not ventilator associated)  3 
Central line infection  2 
Ventilator-associated pneumonia  2 
Gastrointestinal infection  1 
Sepsis as result of delay in performing surgery  1 
Events Related to Medication  6 (12%) 
Medication-related hypotension  2 
Medication-related delirium  1 
Medication-related gastrointestinal bleed  1 
Kidney damage because of use of contrast  1 
Medication-related acute renal insufficiency  1 
Events Related to Patient Care  5 (10%) 
Stage III pressure ulcer  2 
Stroke and resulting paralysis related to hypoglycemia  1 
Hypoglycemic coma  1 
Intravenous volume overload  1 
Source:  OIG analysis of 278 Medicare beneficiary hospitalizations in two selected counties, 2008. 
 
Seven of the fifty-one adverse events in our sample were cascade 
events wherein an initial adverse event caused a series of additional, 
related events for the same patient.  Our analysis grouped cascade 
events together into one adverse event.  These cascade events were 
some of the most serious adverse events identified, with six of the seven 
cascade events identified resulting in life-sustaining intervention, 
serious disability or death.  Six of the seven cascade events began as the 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  11   
F I N D I N G S  
result of postsurgical complications.  For example, one cascade event 
involved a patient undergoing surgery and developing a bowel 
obstruction postoperatively, which resulted in hypotension, excessive 
bleeding, and ultimately required both a blood transfusion and 
corrective surgery.  Two of the postoperative cascades led to patient 
death; for example, one beneficiary experienced a series of postoperative 
events including renal and respiratory failure, and subsequently died of 
a heart attack.   
Fewer than 1 percent of Medicare beneficiaries in two selected counties 
experienced an event on the National Quality Forum list of Serious 
Reportable Events   
Two beneficiaries experienced an adverse event on the NQF list of 
Serious Reportable Events, and one of these beneficiaries experienced 
two events on the list.  The three NQF events we identified involved two 
beneficiaries for an estimated incidence rate in the two counties of less 
than 1 percent (0.7 percent).  Both of the beneficiaries developed  
Stage III pressure ulcers during their hospital stays.  (Stage III 
pressure ulcers are defined as having both skin loss and damage to the 
tissue below the skin.19)  In both cases, the pressure ulcers were 
classified by physician reviewers as constituting temporary harm 
because they did not prolong the hospital stay or cause permanent 
disability to the beneficiary.   
One of these two patients had a second adverse event on NQFs list:  
serious patient disability resulting from poor glycemic control.  NQF 
defines serious disability as loss of a body part, or disability or loss of 
bodily function lasting more than 7 days or still present at discharge.20  
In this case, the patient developed partial paralysis after experiencing a 
stroke associated with severe hypoglycemia.  This same patient died as 
the result of another adverse event not on NQFs list:  septic shock 
caused by a bacterial infection.   
 
19 Pressure ulcers are classified into four stages by the National Pressure Ulcer Advisory 
Panel (NPUAP):  Stage I is intact skin with nonblanchable redness; Stage II is a shallow 
ulcer or blister indicating damage to the epidermis; Stage III is damage extending through 
all the layers of the skin; and Stage IV is damage through all the layers of the skin and 
underlying muscle, tendons, or bone.  NPUAP, Pressure Ulcer Stages Revised by NPUAP, 
February 2007.  Available online at http://www.npuap.org/pr2.htm.  Accessed on   
November 18, 2008. 
20 NQF, Serious Reportable Events in Healthcare 2006 Update:  A Consensus Report, 
NQF, Washington, DC.  2007, p. 7.  Available online at 
http://www.qualityforum.org/pdf/reports/sre/txsrepublic.pdf.  Accessed on October 10, 2008.   
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One of the three adverse events on NQFs list resulted in a higher Medicare 
reimbursement.  In this case, the Medicare beneficiary was a nursing home 
resident who developed a Stage III pressure ulcer during a 12-day hospital 
stay.  Including the pressure ulcer on the list of billable diagnoses changed 
the MS-DRG from a class associated with lower-level complications or 
comorbidities to a class associated with major complications or 
comorbidities.  We determined that this increased the Medicare 
reimbursement from $7,086 to $9,138, a difference of  
$2,052 or 29 percent.21  In the other two cases, the patients other 
complications or comorbidities increased reimbursement to the maximum 
allowed for the MS-DRG. 
Four percent of Medicare beneficiaries in two selected counties experienced 
an event on CMSs list of hospital-acquired conditions; in one case, the 
condition resulted in a higher Medicare reimbursement 
An estimated 3.7 percent of hospitalized Medicare beneficiaries in the 
two counties had an adverse event on CMSs list.  We identified a total 
of 11 adverse events in our sample that are on CMSs list of hospital-
acquired conditions; 1 beneficiary experienced 2 of these events, 
resulting in a total of 10 Medicare beneficiary hospitalizations with an 
adverse event.  Six of the eleven adverse events were catheter-
associated urinary tract infections and two were associated with 
vascular infections of a central line catheter.  The remaining three 
adverse events on CMSs list were two Stage III pressure ulcers (the 
same events counted on NQFs list of Serious Reportable Events) and 
one case of poor glycemic control resulting in a hypoglycemic coma.   
One of the eleven adverse events on CMSs list of hospital-acquired 
conditions resulted in higher Medicare reimbursement to the hospital.       
The adverse event on the CMS list that resulted in higher 
reimbursement is the same adverse event on the NQF list of Serious 
Reportable Events that resulted in a higher Medicare reimbursement.  
For the remaining 10 hospitalizations with adverse events on CMSs 
list, the hospital-acquired conditions did not lead to higher Medicare 
reimbursement because the beneficiaries other conditions elevated 
their MS-DRG assignment to a class that included major complications 
or comorbidities. 
 
21 CMS implemented a new ICD-9 code for Stage III pressure ulcers, effective October 1, 
2008.  Because there was no diagnosis code specifying the condition at the time of this 
hospital stay, we calculated the cost difference using an analogous code (70703).    
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FF II NN DD II NN GG SS   
Hospitals did not always include diagnosis codes reflecting              
hospital-acquired conditions in claims for Medicare reimbursement.   
Of the 11 hospital-acquired conditions we identified in our sample from 
CMSs list, 7 conditions were not included in the billing data provided 
by hospitals.22  Six of these seven cases involved catheter-associated 
urinary tract infections and the seventh involved poor glycemic control.  
The exclusion of the diagnosis code for urinary tract infections could 
result in Medicare paying for associated care without recognizing that a 
hospital-acquired infection occurred.  When a catheter-associated 
urinary tract infection is acquired in the hospital and included on the 
bill to Medicare, CMS excludes both the catheter-associated urinary 
tract infection code and certain associated infection codes in calculating 
the MS-DRG.  However, when the hospital does not include the 
catheter-associated urinary tract infection code, the remaining 
associated infection codes may still be included in the calculation and 
could result in higher reimbursement.  Of the six hospitalizations in 
which the hospitals omitted the catheter-associated urinary tract 
infection code from the billing data, two hospitalizations included these 
additional codes that could increase reimbursement.   
Thirteen percent of Medicare beneficiaries in two selected counties 
experienced adverse events classified as F-I on the NCC MERP harm scale 
Based on our medical review, 43 Medicare beneficiaries in two selected 
counties (13.2 percent) experienced adverse events classified in the four 
most serious harm categories on the NCC MERP index.  For a number 
of patients, the same type of adverse event, such as infection or 
medication-related events resulted in a different level of harm 
depending upon such factors as intervention and the condition of the 
patient.  Table 4 on the next page lists the adverse events by level of 
harm, using the NCC MERP scale of patient harm.   
  Table 4:  Adverse Events Classified as F-I on the NCC MERP Index of 
Patient Harm (n = 43) 
Category  Description  Adverse Events 
F  Temporary harm, requiring a prolonged hospital stay  28 
G  Permanent harm  4 
H  Life-sustaining intervention required  8 
I  Contributing to death  3 
Source:  OIG analysis of 278 Medicare beneficiary hospitalizations in two selected counties, 2008. 
 
 
22 We requested billing data directly from the hospitals within a week of discharge.  
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Identified adverse events illustrate  Differences in the criteria used by 
differences in the lists and criteria that  various entities to define adverse 
define adverse events    events can present a challenge in 
determining an adverse event 
incidence rate.  The following two examples of adverse events identified 
in our review illustrate these differences.  These examples underscore 
the differences in the definitions used in the three sets of criteria that 
make up our overall rate of adverse events:  NQF Serious Reportable 
Events, CMS hospital-acquired conditions, and events classified as  
F-I on the NCC MERP patient harm scale.    
NQFs list of Serious Reportable Events and CMSs list of hospital-acquired 
conditions often address the same adverse event but define the event 
differently.  As an example, both lists cite poor glycemic control as a 
category of adverse event.  In our sample of hospitalizations, we 
identified two adverse events that were manifestations of poor glycemic 
control and resulted in serious patient harm; one event is represented 
on NQFs list and one on CMSs list.  Both adverse events represented 
serious harm, but they do not count on both lists because of differences 
in the definition of adverse events by NQF and CMS.  Generally 
speaking, manifestations of poor glycemic control are defined on NQFs 
list by the severity of harm and on CMSs list by the specific type of 
condition.   
NQFs list includes as a reportable event patient death or serious 
disability associated with hypoglycemia, the onset of which occurs 
during care at the health care facility.  In the case that met this 
definition, the patient experienced severe hypoglycemia to the point of 
being near respiratory arrest and resulting in a stroke with permanent 
partial paralysis on one side of the body.  Our physician reviewers 
classified this event as G-level harm on the NCC MERP scale, but it 
did not meet CMSs definition of a hospital-acquired condition because 
the severe hypoglycemia did not lead to a coma (the specific condition 
related to hypoglycemia within CMSs category for poor glycemic 
control).   
The second sample case met CMSs definition because the patients 
severe hypoglycemia resulted in a hypoglycemic coma.  In this case, a 
patient with hypoglycemia became nonresponsive and fell into a coma.  
The coma required life-sustaining intervention to correct, therefore 
registering as H-level harm on the NCC MERP scale.  However, 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  15   
FF II NN DD II NN GG SS   
because the patient did not die or become seriously disabled, the case 
did not meet NQFs criteria for a serious reportable event.     
Five beneficiaries had adverse events that resulted in permanent disability 
or death that were not on the National Quality Forum list of Serious 
Reportable Events.  The NCC MERP patient harm scale classifies 
adverse events by level of patient harm rather than by the type of 
adverse event, with categories for permanent harm and death.  NQFs 
list focuses largely on serious patient disability or patient death, but the 
disability or death is reportable only if it is the result of specific events.  
In addition to the two patients previously noted who experienced events 
on NQFs list, two other beneficiaries experienced adverse events that 
resulted in death and three more experienced adverse events that 
resulted in permanent disability.  In one of these cases, the patient 
experienced a series of adverse events following a decision to delay 
surgery and died of sepsis after 51 days in the hospital.  In another case, 
the patient died as the result of a heart attack following surgery.  The 
remaining three patients all experienced surgical or postsurgical 
complications that resulted in permanent disability.  For each of the five 
adverse events (all of which are included in our overall rate), the 
patients incurred serious harm but the contributing adverse event was 
not on NQFs list or CMSs list. 
 
In addition to the adverse events 
An additional 15 percent of Medicare beneficiaries in 
previously discussed, another     
two selected counties experienced events during their 
43 Medicare beneficiaries           
hospital stays that resulted in temporary harm 
(15.2 percent) experienced events 
classified on the NCC MERP scale as E-level harm, defined as 
temporary harm requiring medical intervention (52 events).  Also, 16 of 
the 41 beneficiaries who experienced a more serious adverse event in 
our overall rate also experienced a temporary harm event (17 events).  
In consultation with physician reviewers, we determined that these 
temporary events were not comparable to the more serious adverse 
events included in our overall adverse event rate.   
The 69 events classified as temporary harm represent a wide array of 
events, from swelling at a treatment site to low-level infections (see 
Table 5).  In some cases, the events resulted from standard medical 
treatment that caused an undesirable outcome in the patient, such as 
an allergic reaction to medication.  These events are of interest to 
hospitals and others seeking to improve patient safety because they are 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  16   
F I N D I N G S  
potential indicators of patient care problems and/or systems 
improvement opportunities.  Although many cases of temporary harm 
represent fairly minor occurrences, others were classified as E-level 
harm because the patients were in the hospital for lengthy periods as a 
result of other, more serious, diagnoses, allowing hospitals to address 
the temporary harm prior to discharge.  For a list of all temporary harm 
events with more complete descriptions, see Appendix G. 
Ta ble 5:  Additional Temporary Harm Events Identified Among 
Hospitalized Medicare Beneficiaries in Two Selected Counties by Type   
 
(n = 69) 
 
  Adverse Events and 
Typ es of Adverse Events  Percentage of Events 
Events Related to Medication  29 (42%) 
 
Medication-related change in mental state  10 
Med ication-related skin problems  8 
Other medication-related problems  7 
Med ication-related hypotension  4 
Events Related to Skin Care  13 (20%) 
 
Stage I or II pressure ulcer  10 
Skin  tear, abrasion, or other breakdown  3 
Events Related to Surgery and Other Procedures  13 (19%) 
 
Postoperative hypotension  4 
Abn ormal bleeding following surgery or procedure  3 
Respiratory complications related to surgery or procedure  2 
  Complications related to insertion of endotracheal tube  1 
  Swelling developed at site of central line insertion  1 
Postoperative urinary retention  1 
 
Occlusion of blood supply during procedure  1 
 
  Events Related to Glycemic Control  4 (7%) 
Episodes of hypoglycemia  3 
 
Acute nonresponsive episode (not a coma)  1 
 
Events Related to Intravenous Fluids  5 (7%) 
 
Intravenous volume overload  3 
 
Intravenous infiltrate  2 
 
Hospital-Acquired Infections  2 (3%) 
 
Gastrointestinal infection  2 
 
  Other  3 (4%) 
Nonmedication allergic reaction  2 
 
Fall leading to skin abrasions  1 
 
Source:  OIG analysis of 278 Medicare beneficiary hospitalizations in two selected counties, 2008. 
 
 
 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  17   
FF II NN DD II NN GG SS   
In a number of cases, physician reviewers indicated that these 
temporary harm events could have developed into more serious adverse 
events with a greater degree of harm without timely intervention.  For 
example, we identified 11 Stage I or Stage II pressure ulcers in our 
sample.  These early stage ulcers can escalate quickly to Stage III or 
Stage IV without additional medical attention.23  As another example, 
one sample Medicare beneficiary experienced a temporary blood vessel 
blockage in a leg following surgery.  Clinical staff identified the problem 
after discovering that the leg was cool to the touch and restored the 
blood supply.  Our physician reviewers indicated that, had the problem 
not been addressed, the lack of blood supply would likely have led to 
gangrene and amputation.  Also, if episodes of severe hypoglycemia are 
closely monitored and addressed quickly, subsequent strokes and other 
serious complications may be avoided.  Finally, our review found three 
events of E-level Clostridium difficile (C-diff), a highly contagious and 
potentially dangerous condition of interest to health officials.  (C-diff 
was included on CMSs list of proposed hospital-acquired conditions in 
April 2008.)  We included only one of the three cases of C-diff in our 
adverse event rate.  In the other two cases of C-diff, clinical staff 
identified the problem in earlier stages and treated the patient without 
increased hospitalization.    
The most common temporary harm events we identified were related to 
medication.  The harm associated with these events was most often 
changes in the patients mental status (such as confusion); hypotension; 
and skin reactions, such as rashes and hives.  The most common 
interventions to address these problems were to stop giving or to change 
the medication.      
 
23 J.L. Zeller, C. Lynm, R.M. Glass, Pressure Ulcers, Journal of the American Medical 
Association, 296(8), August 23/30, 2006, p. 1020.  Available online at http://jama.ama-
assn.org/cgi/reprint/296/8/1020.pdf.  Accessed on November 18, 2008. 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  18   
 C O N C L U S I O N  
The Act requires that OIG report to Congress regarding harm caused in 
health care settings.  This study is one of a series of OIG studies designed 
to meet the requirements of the Act and provides an estimated adverse 
events incidence rate among hospitalized Medicare beneficiaries in two 
selected counties.   
We found that 15 percent of Medicare beneficiaries in our sample 
experienced an adverse event during their hospital stays, few of which 
were NQF Serious Reportable Events or CMS hospital-acquired 
conditions.  Further, of the 11 adverse events on CMSs list of        
hospital-acquired conditions and the 3 adverse events on NQFs list of 
Serious Reportable Events, only 1 resulted in higher Medicare 
reimbursement to the hospital.  We also found that another 15 percent of 
Medicare beneficiaries experienced events that caused temporary harm 
that, while not comparable to the more serious adverse events included in 
our overall rate, may reflect patient care problems and learning 
opportunities.   
Although these results are not nationally representative, the extent of 
adverse events and temporary harm found in this case study 
substantiates concerns about the incidence of adverse events in hospitals 
and the importance of safety initiatives to reduce occurrences.  Our 
analysis also calls attention to the difficulty of determining what events 
should be considered in an adverse event incidence rate and how those 
events should be identified and defined.  Focusing our review on a limited 
geographic area (two counties) allowed OIG to learn about various 
methods for identifying adverse events in hospitals.  OIG is continuing 
this work through 2009 and is currently expanding our study of incidence 
to provide a national estimate of adverse events among hospitalized 
Medicare beneficiaries. 
The Act also directs OIG to make recommendations for such legislation 
and administrative action as OIG determines is appropriate.  The Act 
specifically authorized funding to continue through calendar year 2009 
and OIG will devote this funding to additional studies involving adverse 
events.  Future reports in this series will include recommendations as 
appropriate.   
 
 
 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  19   
C O N C L U S I O N  
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
We received comments on a draft of this report from AHRQ and from 
CMS. 
AHRQ commented that the report was methodologically sound and   
well-written and indicated that it had no recommendations for any 
modifications to the report.     
CMS commended OIG on succinctly capturing the numerous issues 
surrounding this complex topic, acknowledged technical assistance that 
it provided to OIG in conducting this study, and indicated that it 
welcomed continued work with OIG on this issue.   
CMS reiterated its policies to encourage the prevention of adverse 
events, including quality measurement and reporting, financial 
incentives, and program oversight.  Regarding financial incentives, 
CMS outlined the provision to deny payment for care associated with 
hospital-acquired conditions, indicating that OIG identification of 
hospital-acquired conditions and their effect on Medicare payment 
allowed CMS to gain a deeper understanding of the payment policy in 
practice.   
CMS also offered a point of clarification regarding the discussion of one 
of the hospital-acquired conditions, catheter-associated urinary tract 
infection.  We found that in two of six cases of catheter-associated 
urinary tract infections, hospitals omitted the code that identifies the 
hospital-acquired condition but submitted other associated infection 
codes that could result in higher reimbursement.  CMS indicated that it 
is not clear whether the hospitals deliberately omitted the hospital-
acquired condition code, which could allow the hospitals to avoid the 
payment penalty imposed by the hospital-acquired condition payment 
provision.  CMS recommended further evaluation of this issue in OIGs 
subsequent study to estimate the national incidence of adverse events.  
OIG agrees that further evaluation is warranted and will address this 
issue in future work in this series.   
For the full text of AHRQ and CMS comments, see Appendix H. 
 
 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  20   
 A P P E N D I X   ~   A  
Tax Relief and Health Care Act of 200624 
P.L. No. 109-432 
 
DIVISION B  MEDICARE AND OTHER HEALTH PROVISIONS 
TITLE IIMEDICARE BENEFICIARY PROTECTIONS 
SEC 203 OIG STUDY OF NEVER EVENTS 
 
(a) Study. 
(1) In general.The Inspector General in the Department of Health and 
Human Services shall conduct a study on 
(A) incidences of never events for Medicare beneficiaries, including 
types of such events and payments by any party for such events; 
(B) the extent to which the Medicare program paid, denied payment, or 
recouped payment for services furnished in connection with such events 
and the extent to which beneficiaries paid for such services; and 
(C) the administrative processes of the Centers for Medicare & Medicaid 
Services to detect such events and to deny or recoup payments for 
services furnished in connection with such an event. 
(2) Conduct of study.In conducting the study under paragraph (1), the 
Inspector General 
(A) shall audit a representative sample of claims and medical records of 
Medicare beneficiaries to identify never events and any payment (or 
recouping of payment) for services furnished in connection with such 
events; 
(B) may request access to such claims and records from any Medicare 
contractor; and 
(C) shall not release individually identifiable information or facility-
specific information. 
(b) Report.Not later than 2 years after the date of the enactment of 
this Act, the Inspector General shall submit a report to Congress on the 
study conducted under this section.  Such report shall include 
recommendations for such legislation and administrative action, such as 
 
24 The Tax Relief and Health Care Act of 2006, P.L. No. 109-432  203. 
 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  21   
A P P E N D I X   ~   A  
a noncoverage policy or denial of payments, as the Inspector General 
determines appropriate, including 
(1) recommendations on processes to identify never events and to deny 
or recoup payments for services furnished in connection with such 
events; and 
(2) a recommendation on a potential process (or processes) for public 
disclosure of never events which 
(A) will ensure protection of patient privacy; and  
(B) will permit the use of the disclosed information for a root cause 
analysis to inform the public and the medical community about safety 
issues involved. 
(c) Funding. Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Inspector General of the 
Department of Health and Human Services $3,000,000 to carry out this 
section, to be available until January 1, 2010. 
(d) Never Events Defined.For purposes of this section, the term never 
event means an event that is listed and endorsed as a serious 
reportable event by the National Quality Forum as of  
November 16, 2006. 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  22   
A P P E N D I X   B  
 A P P E N D I X   ~   B  
 
Glossary of Selected Terms 
General Terms25 
Adverse eventHarm caused by medical care.  Identifying adverse 
events does not imply an error, negligence, or poor quality of care.  It 
does indicate that the care resulted in an undesirable clinical outcome 
and that the clinical outcome is not related to an underlying disease. 
CascadeAn adverse event wherein one event led causally to another. 
Hospital-acquired conditionA medical condition not present prior to 
admission to a hospital.   
Medical errorThe failure of a planned action to be completed as 
intended or the use of a wrong plan to achieve an aim.    
Near missAn event or a situation that did not produce patient harm, 
but only because of intervening factors, such as patient health or timely 
intervention. 
Never eventAn event or situation that should never occur in a health 
care setting.  The National Quality Forum initially used the term never 
events to describe its list of serious adverse events, but began in 2005 
to refer to the list as Serious Reportable Events.  
Patient safetyFreedom from accidental or preventable injuries caused 
by medical care. 
Temporary harm eventEvent classified as the lowest level of patient 
harm on the National Coordinating Council for Medication Errors 
Reporting Prevention Index for Categorizing Errors.  This level of harm 
is identified as an adverse event that may have contributed to or 
resulted in temporary harm to the patient and required intervention. 
 
 
 
25 Sources:  Definitions derived from a variety of sources including L.T. Kohn, J.M. 
Corrigan, and M.S. Donaldson, Eds, To Err is Human:  Building a Safer Health System,  
A Report of the Committee on Quality of Health Care in America, Institute of Medicine,  
Washington, DC, National Academy Press, 1999; R.M. Wachter, Understanding Patient 
Safety, McGrawHill, 2008; and the glossary of the Agency for Healthcare Research and 
Quality Patient Safety Network.  Available online at 
http://www.psnet.ahrq.gov/glossary.aspx.  Accessed on October 10, 2008.    
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  23   
A P P E N D I X   ~   B  
Clinical Terms26 
AcidosisAn abnormal condition of reduced alkalinity of the blood and 
tissues that is marked by sickly sweet breath, headache, nausea and 
vomiting, and visual disturbances and is usually a result of excessive 
acid production. 
Blood clotA coagulated mass produced by clotting of blood. 
Coronary artery bypass graft (CABG)Heart bypass surgery performed 
to route blood flow around clogged arteries supplying the heart. 
Central line infectionAn infection of the intravenous (IV) line that is 
inserted into a large vein (as the superior vena cava) typically in the 
neck or near the heart for therapeutic or diagnostic purposes (as to 
administer medicines or fluids or withdraw blood). 
Deep vein thrombosis (DVT)A condition marked by the formation of a 
thrombus within a deep vein (as of the leg or pelvis) that may be 
asymptomatic or be accompanied by symptoms (as swelling and pain) 
and that is potentially life threatening if dislodgment of the thrombus 
results in pulmonary embolism. 
HemiparesisMuscular weakness or partial paralysis restricted to one 
side of the body. 
HypertensionAbnormally high arterial blood pressure that is chiefly of 
unknown cause but may be attributable to a preexisting condition (as a 
renal or endocrine disorder), that typically results in a thickening and 
inelasticity of arterial walls and hypertrophy of the left heart ventricle, 
and that is a risk factor for various pathological conditions or events 
(such as heart attack, heart failure, stroke, end-stage renal disease, or 
retinal hemorrhage). 
HypotensionAbnormally low pressure of the blood; also called low 
blood pressure. 
HypoglycemiaAbnormal decrease of sugar in the blood. 
IleusAn obstruction of the bowel; specifically, a condition that is 
commonly marked by a painful distended abdomen, vomiting of dark or 
 
26 National Institutes of Health, U.S. National Library of Medicine, Medline Plus 
Medical Dictionary, updated February 4, 2003.  Available online at 
http://www.nlm.nih.gov/medlineplus/mplusdictionary.html.  Accessed on                 
November 10, 2008. 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  24   
A P P E N D I X   ~   B  
fecal matter, toxemia, and dehydration and that results when the 
intestinal contents back up because peristalsis fails although the lumen 
is not occluded. 
Pressure ulcerAn ulceration of tissue deprived of adequate blood 
supply by prolonged pressure; called also decubitus, decubitus ulcer, 
and pressure sore. 
Pulmonary edemaAbnormal accumulation of fluid in the lungs. 
SepsisA systemic response typically to a serious, usually localized 
infection (as of the abdomen or lungs) especially of bacterial origin that 
is usually marked by abnormal body temperature and white blood cell 
count, tachycardia, and tachypnea; specifically, systemic inflammatory 
response syndrome induced by a documented infection. 
Urinary tract infection (UTI)An infection of the tract through which 
urine passes and which consists of the renal tubules and renal pelvis of 
the kidney, the ureters, the bladder, and the urethra. 
Ventilator associated pneumonia (VAP)A disease of the lungs that is 
characterized especially by inflammation and consolidation of lung 
tissue followed by resolution; is accompanied by fever, chills, cough, and 
difficulty in breathing; and is caused chiefly by infection that enters the 
lungs through a ventilator.   
 
 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  25   
 A P P E N D I X   ~   C  
National Quality Forum Serious Reportable Events27 
The National Quality Forum (NQF) list is separated into six categories:  Serious 
disability is defined as loss of a body part, disability, or loss of bodily function 
lasting more than 7 days or still present at time of discharge.     
Table C1:  The National Quality Forum List of Serious Reportable Events 
Surgical Events   
A.   Surgery performed on the wrong body part 
B.   Surgery performed on the wrong patient 
C.   Wrong surgical procedure performed on a patient 
D.   Unintended retention of foreign object in a patient after surgery or procedure 
E.   Intraoperative or immediately postoperative death 
Product or Device Events 
A.   Patient death or serious disability associated with the use of contaminated drugs, devices, or biologics provided by the health care facility 
B.   Patient death or serious disability associated with use or function of a device in patient care in which the device is used or functions other than as    
intended 
C.   Patient death or serious disability associated with intravascular air embolism that occurs while being cared for in a health care facility 
Patient Protection Events 
A.   Infant discharged to the wrong person 
B.   Patient death or serious disability associated with patient elopement 
C.   Patient suicide, or attempted suicide resulting in serious disability, while being cared for in a health care facility 
Care Management Events 
A.   Patient death or serious disability associated with a medication error 
B.   Patient death or serious disability associated with a hemolytic reaction because of administration of incompatible blood or blood products 
C.   Maternal death or serious disability associated with labor or delivery in a low-risk pregnancy while being cared for in a health care facility 
D.   Patient death or serious disability associated with hypoglycemia, the onset of which occurs while patient is being cared for in a health care facility 
E.   Death or serious disability associated with failure to identify and treat hyperbilirubinemia in neonates 
F.   Stage III or Stage IV pressure ulcers acquired after admission to a health care facility 
G.   Patient death or serious disability because of spinal manipulative therapy 
H.   Artificial insemination with the wrong donor sperm or wrong egg 
Environmental Events 
A.   Patient death or serious disability associated with an electric shock while being cared for in a health care facility 
B.   Any incident in which a line designated for oxygen or other gas to be delivered to a patient contains the wrong gas or is contaminated by toxic 
substances 
C.   Patient death or serious disability associated with a burn incurred from any source while being cared for in a health care facility 
D.   Patient death or serious disability associated with fall while cared for in a health care facility 
E.   Patient death or serious disability associated with the use of restraints or bedrails while being cared for in a health care facility 
Criminal Events 
A.   Care provided by someone impersonating a health care provider 
B.   Abduction of a patient of any age 
C.   Sexual assault on a patient within or on the grounds of a health care facility 
D.   Death or significant injury resulting from a physical assault that occurs within or on the grounds of the facility 
 
27 NQF, Serious Reportable Events in Healthcare 2006 Update:  A Consensus Report, 
National Quality Forum, Washington, DC, 2007, p. 7.  Available online at 
http://www.qualityforum.org/pdf/reports/sre/txsrepublic.pdf.  Accessed on October 10, 2008.   
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 A P P E N D I X   ~   D  
Centers for Medicare & Medicaid Services Categories of 
Hospital-Acquired Conditions 
The Centers for Medicare & Medicaid Services (CMS) list of       
hospital-acquired conditions is divided into 10 categories.  Effective 
October 1, 2008, CMS no longer pays a higher reimbursement for 
hospitalizations complicated by these categories of conditions. 
Table D1:  The Centers for Medicare & Medicaid Services List of 
Hospital-Acquired Conditions 
1.  Foreign object retained after surgery 
2.  Air embolism 
3.  Blood incompatibility 
4.  Pressure ulcers (stages III and IV) 
5.  Falls 
A.  Fracture 
B.  Dislocation 
C.  Intracranial injury 
D.  Crushing injury 
E.  Burn 
F.  Electric shock 
6.  Manifestations of poor glycemic control 
A.  Hypoglycemic coma 
B.  Diabetic ketoacidosis 
C.  Nonkeototic hyperosmolar coma 
D.  Secondary diabetes with ketoacidosis 
E.  Secondary diabetes with hyperosmolarity 
7.  Catheter-associated urinary tract infection 
8.  Vascular catheter-associated infection 
9.  Deep vein thrombosis/pulmonary embolism associated with 
A.  Total knee replacement 
B.  Hip replacement 
10.  Surgical site infection 
A.  Mediastinitis after coronary artery bypass graft (CABG) 
B.  Associated with certain orthopedic procedures involving the 
a.  Spine 
b.  Neck 
c.  Shoulder 
d.  Elbow 
C.  Associated with certain bariatric surgical procedures for obesity 
a.  Laprascopic gastric bypass 
b.  Gastroenterostomy 
c.  Laparoscopic gastric restrictive surgery 
Source:  Fiscal Year 2009 Final Inpatient Prospective Payment System Rule, 73 Fed. Reg. 48434, 48471 (Aug. 
19, 2008). 
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 A P P E N D I X   ~   E  
Detailed Methodology 
Geographic Area Selection 
For this case study, we selected hospitals in two counties.  We chose the 
narrow geographic scope to minimize logistical difficulties.  In 
determining the geographic areas for our case study, we considered a 
number of factors.  We chose one county from each of two States to 
provide greater diversity in our population of hospitalizations.  We 
selected counties that (1) had a sufficient number of hospitals so that no 
single hospital would bear a significant burden in meeting our data 
collection requests; and (2) had similar demographics, such as 
population, percentage of residents aged 65 and older, per capita 
income, and number of hospitals.  The selected counties each have 12 
acute care hospitals, all of which were included in our review.  The 24 
hospitals provided diversity in key characteristics, such as a range of 
bed sizes from 78 to 780; an ownership mix including nonprofit, public, 
and private; and both large networks and single-ownership facilities.  
Sample Selection 
From each of the 24 hospitals in the two-county area,28 we obtained lists 
of all Medicare-enrolled beneficiaries who were discharged during the 
week of August 1016, 2008.  From a combined list of 2,549 discharges, 
we randomly selected a total of 310 (300 from one stratum and 10 from 
another stratum).  Unless otherwise noted, results in this report are 
projected to all eligible discharges from the 24 hospitals in the two 
counties during this timeframe.  Hospitalizations for individual patients 
were eligible for selection if they met the following criteria: 
  the patient was enrolled in Medicare; 
  the patient was an inpatient for at least 24 hours; 
  the patient was treated as an acute care inpatient (excluding 
inpatients in psychiatric services, rehabilitation-only services, or 
long term care); and 
  the patient was discharged during our target week:   
August 1016, 2008. 
We initially selected 300 Medicare hospitalizations using a simple 
random sampling technique.  However, one hospital initially provided 
 
28 Because the Tax Relief and Healthcare Act of 2006 stipulates that OIG shall not 
release facility-specific information, we do not name the counties in this report.   
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A P P E N D I X   ~   E  
us with an incomplete list of discharges that affected our sampling 
frame.  We then obtained a complete list from this hospital, which 
resulted in an additional stratum of 46 discharges, from which we 
randomly selected 10.   
From among the 300 hospitalizations initially selected, we excluded a 
total of 32 that were ineligible for review because they did not meet the 
criteria listed above.  Following this, 278 hospitalizations remained in 
the sample for review.  Among the 278 Medicare beneficiaries in the 
sample hospitalizations, the average age was 77 years with a range of 
24 to 102 years, and the average length of hospitalization was 6 days 
with a range of 1 to 53 days.  A summary of the sampling design is 
provided in Table E1. 
Table E1:  Sample Selection 
  Stratum 1  Stratum 2  Total 
Sampling Frame  2,503  46  2,549 
Original Sample  300  10  310 
Ineligible  32  0  32 
Final Sample  268  10  278 
  Source:  Office of Inspector General analysis of 278 Medicare beneficiary hospitalizations in two selected 
counties, 2008. 
Screening for Potential Adverse Events 
We conducted a two-stage review to identify adverse events.  The first 
stage included five distinct screening processes designed to identify 
hospitalizations that appeared likely to include an adverse event.  The 
screening processes included: 
  beneficiary interviews, 
  administrative data screening using the Agency for Healthcare 
Research and Quality (AHRQ) Patient Safety Indicator (PSI) 
program, 
  analysis of present on admission (POA) indicators included in 
administrative billing data, 
  reviews of hospital incident reports related to the hospitalization, 
and  
  targeted medical record screening using the Institute for Healthcare 
Improvement (IHI) Global Trigger Tool (GTT) protocol.  
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A P P E N D I X   ~   E  
The use of multiple screening processes allowed us to test the feasibility 
and effectiveness of various methods that we are considering for use in 
future work.  The screening processes also allowed us to reduce the 
number of hospitalizations requiring a full physician medical review.    
Beneficiary Interviews.  For each selected hospitalization, we attempted 
to conduct structured telephone interviews with the patient or a 
designated representative to learn about the medical care experienced 
during the hospital stay.  The interview protocol was designed to 
determine whether patients experienced any episodes that might be 
considered an adverse event while in the hospital and included 
questions about medication, procedures, infections, and other events on 
the National Quality Forum (NQF) and the Centers for Medicare  
& Medicaid Services (CMS) lists.  We completed interviews for patients 
associated with 79 percent of sampled hospitalizations (220 of 278) and 
identified 42 hospitalizations for the second stage of review.   
Analysis of Patient Safety Indicators.  Using administrative billing data 
requested directly from the hospitals, we applied AHRQs PSI program 
to our sample hospitalizations.  The PSI program includes algorithms 
that calculate 27 quality-of-care indicators, 20 of which are        
provider-level indicators that specify that an adverse event may have 
occurred.  We identified a total of 13 PSIs related to 11 patients and 
flagged these hospitalizations for the second stage of review. 
Analysis of Present on Admission Indicators.  Using the same 
administrative billing data, we used POA indicators to identify claims 
that included diagnoses that were coded as not part of the patients 
condition upon admission.  A relatively new requirement for Medicare 
Part A claims, POA indicator codes require hospitals to make a 
deliberate clinical distinction about whether diagnoses are present at 
the time of admission.  POA indicators identified 112 hospitalizations 
that had at least one diagnosis not present at the time of admission.  We 
included these 112 hospitalizations in the second stage of review. 
Review of In-Hospital Incident Reports.  We requested that hospitals 
provide any internal incident reports associated with our sample 
hospitalizations.  We received 47 incident reports relating to 36 sample 
hospitalizations from this request.  These 36 hospitalizations were 
flagged for the second stage of review.  
Targeted Medical Record Screening.  Contracted registered nurses 
conducted a preliminary review of medical records onsite at each 
hospital to identify potential adverse events.  They followed IHIs GTT 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  30   
A P P E N D I X   ~   E  
protocol, which allows reviewers to identify triggers in the medical 
record that may be indicative of adverse events and then explore the 
record further to determine whether an event occurred and its resulting 
level of harm.  This protocol relies on a systematic method of reviewing 
medical records that takes less than 20 minutes per chart.  Targeted 
medical reviews were completed for all sampled hospitalizations and 
identified 122 hospitalizations for inclusion in the second stage of 
review. 
Flagged Hospitalizations.  Based on the combined results of these 
screening processes, we identified 183 hospitalizations for the second 
stage of reviews:  a review of the full medical record by a physician.  The 
five screening processes flagged many of the same hospitalizations. 
Medical Record Review of Flagged Hospitalizations 
Three contracted physicians conducted an onsite medical record review 
of the 183 hospitalizations flagged for potential adverse events.  The 
medical review protocol included a review of the results of the screening 
processes that flagged the case for review (medical record screening, 
beneficiary interview, hospital incident report, and/or administrative 
data), and then a review of the full medical record.  Physician reviewers 
completed a structured medical review protocol that required them to 
describe the adverse event, the documentation that led to their 
identification of the event, and the level of harm to the patient using the 
National Coordination Council for Medication Errors Reporting and 
Prevention (NCC MERP) Index for Categorizing Medication Errors.   
Adverse Event Criteria 
To determine a meaningful overall rate of adverse events among 
hospitalized Medicare beneficiaries, this study incorporates criteria 
developed by NQF, CMS, and NCC MERP.  We included in our analysis 
all patient harm incurred during the hospitalization, regardless of 
whether it was considered preventable.  We did not include patient 
harm that occurred prior to entering the hospital.   
Data Analysis 
Physician Review of Findings.  Following the onsite medical record 
review, we verified the adverse event findings with all physician 
reviewers to ensure that cases were determined consistently and to 
ensure consensus about complex cases.  This process resulted in some 
changes to our initial adverse event findings.  Most changes were 
exclusions because the identified event did not meet our study 
definition, most frequently because the adverse event was related to a 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  31   
A P P E N D I X   ~   E  
prior admission.  We made additional changes because the physicians 
determined that the harm was part of the normal progression of the 
disease or a series of events was redefined into a single cascade event.  
Physician reviewers reached consensus for all hospitalizations. 
Statistical Analysis.  Using information from the physician medical 
record review, we calculated adverse events incidence rates as the 
proportion of Medicare beneficiaries with at least one qualifying adverse 
event.  We calculated an overall adverse event incidence rate to include 
events meeting any of the following criteria:   
1.   NQFs list of Serious Reportable Events, as the Act mandates; 
2.  CMSs list of hospital-acquired conditions; and 
3.  the level of patient harm determined by physicians to have 
resulted in a prolonged hospital stay, permanent harm,              
life-sustaining intervention, or death (classified as FI on the NCC 
MERP scale). 
This overall adverse event incidence rate does not include events that 
physician reviewers identified as temporary harm events (classified as 
E-level of harm on the NCC MERP scale).  We excluded these 
temporary harm events from our overall rate because we determined, in 
consultation with physician reviewers, that the effect of these 
events was not comparable to the more serious events meeting the three 
criteria.  We calculated a separate incidence rate for these temporary 
harm events, as well as separate rates for the NQF list, the CMS list, 
and the events classified as F-I on the NCC MERP scale.  
These rates were projected to all hospitalizations meeting our selection 
criteria in the two counties.  Projections were calculated in SUDAAN 
using a logit transformation with a 95-percent confidence interval.  
Analysis of Medicare Payments.  Following physician review and 
consensus, we analyzed administrative billing data for adverse events 
that were included on NQFs or CMSs lists.  We calculated the 
anticipated Medicare payment amount and the amount that Medicare 
would have reimbursed for the hospitalization if the adverse event had 
not occurred.  Medicare payment amounts were calculated using CMSs 
MS-DRG Assignment with Medicare Code Editor V25 and Inpatient 
Prospective Payment System pricing software.  These amounts were 
compared to determine any cost difference.  We did not calculate the 
effect on Medicare payment for adverse events we identified that were 
not on the CMS or NQF lists.    
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  32   
 A P P E N D I X   ~   F  
 
Estimates and Confidence Intervals  
Table F1 provides estimates and 95-percent confidence intervals for key 
statistics based on analysis of 278 sample hospitalizations.  Some of the 
statistics in Table F1 represent results for subgroups within our sample 
that we do not reference in the text of the report. 
 
Table F1:  Estimates and Confidence Intervals for Key Statistics  
 
95-Percent Confidence Interval 
  Estimate  Lower Bound  Upper Bound 
Percentage of Eligible Hospitalizations (n = 278)  
Overall Rate of Adverse Events  15.00%  11.43%  19.44% 
NQF Rate  0.73%  0.20%  2.67% 
CMS Rate  3.66%  2.05%  6.45% 
F through I Rate  13.17%  9.82%  17.43% 
Additional E-Level Harm Not in Overall Rate  15.22%  11.65%  19.65% 
All E Rate  17.05%  13.27%  21.64% 
Multiple Event Rate  8.78%  6.07%  12.50% 
Percentage of Hospitalizations With an Adverse Event (n = 42)  
NQF Rate  4.88%  1.32%  16.41% 
CMS Rate  24.39%  14.13%  38.74% 
F through I Rate  87.81%  74.85%  94.57% 
Highest Harm Level is E  12.20%  5.43%  25.15% 
Highest Harm Level is F  54.76%  40.54%  68.24% 
Highest Harm Level is G  7.32%  2.54%  19.33% 
Highest Harm Level is H  19.51%  10.46%  33.46% 
Highest Harm Level is I  7.32%  2.54%  19.33% 
Multiple Event Rate  43.90%  30.41%  58.36% 
Percentage of Adverse Events (n = 52) 
NQF Rate  5.88%  1.54%  19.67% 
CMS Rate  21.57%  13.16%  33.29% 
F through I Rate  84.31%  73.39%  91.29% 
Harm Level is E  15.67%  8.71%  26.62% 
Harm Level is F  54.90%  42.13%  67.06% 
Harm Level is G  7.84%  3.33%  17.37% 
Harm Level is H  15.69%  8.31%  27.63% 
Harm Level is I  5.88%  2.24%  14.56% 
Cascade Rate  13.73%  7.71%  23.24% 
Source:  Office of Inspector General analysis and medical review of 278 Medicare beneficiaries hospitalized in two selected counties, 
2008. 
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A P P E N D I X   ~   A  
   A P P E N D I X   ~   G  
Tables of All Adverse Events and Temporary Harm Events 
Identified in Sample 
Table G1 lists information about all adverse events that made up our 
overall rate of 15 percent of hospitalized Medicare beneficiaries (51 
adverse events).  Table G2 lists information about all additional 
temporary harm events we identified (69 events).  
Table G1:  Adverse Events Identified Among Medicare Beneficiaries Hospitalized in Two Selected Counties 
by Type, Harm Level, and Whether the Events are National Quality Forum (NQF) Serious Reportable Events 
or Centers for Medicare & Medicaid Services (CMS) Hospital-Acquired Conditions (n = 51) 
Harm 
NQF List  CMS List 
Adverse Event  Level 
Events Related to Surgery or Other Procedures (22) 
Excessive bleeding following surgery or procedure (4) 
1.  Right groin hematoma at puncture site following stent placement  F     
2.  Wound site infection and hematoma following left knee arthroplasty  F     
3.  Trauma and several days of bleeding caused by insertion of Foley catheter  F     
4.  Cascade event in which a hematoma and a pseudoanurysm of the right femoral artery developed 
F 
following interventional catheterization and stent placement       
Respiratory complications related to surgery or procedure (4) 
1.  Acute respiratory failure following cardiac surgery  F     
2.  Partial lung tissue collapse after surgical lung tissue excision  G     
3.  Acute respiratory failure following percutaneous endoscopic gastric feeding tube placement  H     
4.  Respiratory stridor following procedure  H     
Postoperative ileus (4) 
1.  Significant ileus following partial colon resection  F     
2.  Significant ileus following partial colon resection  F     
3.  Significant ileus following partial colon resection  F     
4.  Significant ileus following partial colon resection  F     
Cardiac complications related to surgery or procedure (3) 
1.  Cascade event in which right coronary artery dissection and right ventricle laceration occurred 
H 
during coronary angioplasty surgery     
2.  Rapid atrial flutter  H     
3.  Cascade event following aortic valve replacement characterized by myocardial infarction, 
I 
respiratory failure, oliguric renal failure and cardiac arrest    
Hypotension/blood loss related to surgery or procedure (3) 
1.  Hypotensive episode during hemodialysis treatment  F     
2.  Postoperative hemodynamic instability  H     
3.  Hypotensive episode during hemodialysis treatment    H     
Blood clots and other occlusions (2) 
1.  Deep vein thrombosis of the subclavian vein following the insertion of an intravascular device  F     
2.  Cascade event which included two declotting procedures for the arteriovenous fistula and a 
G 
subsequent revision of the fistula    
Post colostomy bowel obstruction (1) 
Cascade event in which a small bowel obstruction along with hypotension and gastrointestinal bleeding 
G 
resulted following a partial colon resection    
Premature extubation causing respiratory distress (1) 
Respiratory failure following premature extubation necessitating reintubation  H     
 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  34   
A P P E N D I X   ~   G  
 
Table G1:  Adverse Events Identified Among Medicare Beneficiaries Hospitalized in Two Selected Counties
by Type, Harm Level, and Whether the Events are National Quality Forum (NQF) Serious Reportable Events 
or Centers for Medicare & Medicaid Services (CMS) Hospital-Acquired Conditions (n =51) (continued) 
Harm  NQF  CMS 
Adverse Event  Level  List  List 
Hospital-Acquired Infections (18) 
Urinary tract infection (6) 
1.  Urinary tract infection (resistant pseudomonas) associated with a Foley catheter  E    X 
2.  Urinary tract infection (Proteus mirabilis) associated with a Foley catheter  E    X 
3.  Urinary tract infection (Klebsiella oxytoca) associated with Foley catheter  E    X 
4.  Urinary tract infection (Candida) associated with Foley catheter  E    X 
5.  Urinary tract infection (Morganella morganii) associated with Foley catheter  E    X 
6.  Urinary tract infection (enterococcus) associated with a Foley catheter  E    X 
Surgical infection (3) 
1.  Surgical site infection following procedure  F     
2.  Prolonged fever following surgical procedure  F     
3.  Cascade event in which postoperative persistent enterococcal bacteremia led to multiple complications    
I 
including significant cardiovascular instability and respiratory failure leading to cardiac arrest 
Respiratory infection (not ventilator associated) (3) 
1.  Postoperative lower respiratory infection  F     
2.  Hospital-acquired pneumonia  F     
3.  Hospital-acquired pneumonia  F     
Central line infection (2) 
1.  Central line infection (Vancomycin-resistant enterococcus)  F    X 
2.  Central catheter line sepsis (Staphylococcus epidermidis)  F    X 
Ventilator-associated pneumonia (2) 
1.  Ventilator-associated MRSA (Methicillin-resistant Staphylococcus aureus) infection   F     
2.  Ventilator-associated pneumonia  F     
Gastrointestinal infection (1) 
Gastrointestinal infection (Clostridium difficile) following antibiotic treatment  F       
Sepsis as result of delay in performing surgery (1) 
Cascade event in which septic shock led to respiratory failure, a sacral pressure ulcer, wound disruption, gangrene, 
bilateral pleural effusions requiring chest tube insertion, renal failure and ultimately a venous thrombo-embolism  I 
(deep vein thrombosis and pulmonary embolism)      
Events Related to Medication (6) 
Medication-related hypotension (2) 
1.  Hypotensive episode while on pain medication (opioid)  F     
2.  Hypotensive episode secondary to cardiac medication (-blocker)  F     
Medication-related delirium (1) 
Delirium associated with medication (benzodiazepines)  F     
Medication-related gastrointestinal bleed (1) 
Gastrointestinal bleeding from a cecal ulcer on the large ascending colon associated with anti-coagulation 
F 
medication     
Kidney damage associated with use of contrast (1) 
Kidney dysfunction associated with contrast media  F       
Medication-related acute renal insufficiency (1) 
Acute renal failure associated with dehydration secondary to colchicine induced diarrhea  F       
Events Related to Patient Care (5) 
Pressure ulcer (2)      
1.  Stage III pressure ulcer  E  X  X 
2.  Stage III pressure ulcer  E  X  X 
Stroke and resulting paralysis related to hypoglycemia (1)      
Stroke and permanent left hemiparesis associated with severe hypoglycemia  G  X   
Hypoglycemic coma (1)      
Temporary hypoglycemic coma secondary to insulin  H    X 
Intravenous volume overload (1)       
Fluid overload that led to pulmonary edema  F     
Source:  Office of Inspector General (OIG) analysis and medical review of 278 Medicare beneficiaries hospitalized in two selected counties, 2008. 
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Table G2:  Temporary Harm Events, E-level on the  National Coordinating Council for Medication 
Errors Reporting and Prevention Index for Categorizing Errors (NCC MERP) Patient Harm Scale, 
Identified Among Medicare Beneficiaries in Two Selected Counties by Type (n = 69) 
Adverse Event 
Events Related to Medication (29) 
Medication-related change in mental state (10) 
1.  Hallucinations secondary to pain medication (opioid) 
2.  Delirium and combativeness secondary to pain medication (hydromorphone) 
3.  Delusions and psychosis secondary to pain medication (opioid) 
4.  Confusion secondary to pain medication (narcotics) 
5.  Confusion and combativeness secondary to medication (benzodiazepine) 
6.  Confusion secondary to medication (hydromorphone) 
7.  Confusion secondary to pain medication (opioid) 
8.  Confusion secondary to pain medication (opioid) 
9.  Change of mental status and slurred speech secondary to medication (butyrophenone) 
10.  Change of mental status secondary to medication (digoxin) 
 Medication-related skin problems (8) 
1.  Significant itching secondary to seizure medication 
2.  Significant itching secondary to medication (opioid) 
3.  Rash secondary to antibiotics (fluoroquinolone) 
4.  Significant itching at epidural anesthesia needle insertion site 
5.  Skin rash secondary to antibiotic treatment (fluoroquinolone) 
6.  Hives secondary to intravenous (IV) contrast 
7.  Global rash secondary to steroid treatment (corticosteroid) 
8.  Itching secondary to pain medication (opioid) 
Other medication-related problems (7) 
1.  Urinary retention secondary to pain medication (opioid) 
2.  Leg weakness secondary to epidural anesthesia 
3.  Constipation secondary to pain medication (opioid) 
4.  Hematuria secondary to anticoagulation therapy (heparin) 
5.  Thrush (Candida) infection secondary to antibiotics 
6.  Significant white blood cell reduction secondary to antibiotics (glycopeptide) 
7.  Constipation secondary to pain medication (narcotics) 
Medication-related hypotension (4) 
1.  Hypotension secondary to cardiac medication (-blocker) 
2.  Hypotensive episode secondary to pain medication (opioid) 
3.  Hypotension secondary to medication (antiandrogen) 
4.  Hypotension and bradycardia secondary to multiple medications 
Events Related to Skin Care (13) 
Pressure ulcer (10) 
1.  Stage II pressure ulcer   
2.  Stage II pressure ulcer 
3.  Stage II pressure ulcer 
4.  Stage II pressure ulcer 
5.  Stage II pressure ulcer 
6.  Stage II pressure ulcer 
7.  Stage II pressure ulcer 
8.  Stage II pressure ulcer 
9.  Stage I pressure ulcer 
10. Stage I pressure ulcer 
Skin tear, abrasion or other breakdown (3) 
1.  Cascade event in which digoxin toxicity led to diarrhea and dehydration followed by a Stage I skin breakdown   
2.  Skin tear 
3.  Skin abrasion caused by goggles worn during procedure 
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Table G2:  Temporary Harm Events, E-level on the  National Coordinating Council for Medication 
Errors Reporting and Prevention Index for Categorizing Errors (NCC MERP) Patient Harm Scale, 
Identified Among Medicare Beneficiaries in Two Selected Counties by Type (n = 69) (continued) 
Adverse Event 
Events Related to Surgery and Other Procedures  (13) 
Postoperative hypotension (4) 
1.  Postoperative hypotension of indeterminate etiology 
2.  Transient hypotension following endovascular procedure 
3.  Hypotensive episode following an endovascular procedure 
4.  Postoperative hypovolemia  
Abnormal bleeding following surgery or procedure (3) 
1.  Traumatic bleeding due to nastrogastric tube insertion 
2.  Excessive bleeding at epidural anesthesia needle insertion site 
3.  Swelling and hematoma at the surgical site 
  Respiratory complications related to surgery or procedure (2) 
1.  Respiratory distress and subcutaneous emphysema (air trapped in the subcutaneous layer of the skin) 
2.  Significant right plural effusion following aortic valve replacement surgery 
Complications related to endotracheal tube (1) 
Difficulty swallowing due to trauma incurred during insertion of endotracheal tube 
Swelling developed at site of central line insertion (1) 
  Lymphedema developed around site of central line insertion point 
Postoperative urinary retention (1) 
  Postoperative urinary retention 
  Occlusion of blood supply during procedure (1) 
  Transient occlusion of left lower extremity blood supply during endovascular procedure 
 Events Related to Glycemic Control (4) 
 Episodes of hypoglycemia (3) 
1.  Several episodes of hypoglycemia secondary to insulin 
2.  Several episodes of hypoglycemia secondary to insulin 
3.  Transient hypoglycemia secondary to insulin during a period of fasting for surgery 
 Acute nonresponsive episode related to hypoglycemia (1) 
 Hypoglycemic event that led to period of unresponsiveness 
 Events Related to Intravenous Fluids (5) 
 Intravenous volume overload (3) 
1.  Postoperative fluid overload 
2.  Fluid overload that led to exacerbation of chronic heart failure   
3.  Fluid volume overload that led to respiratory decompensation   
Intravenous infiltrate (2) 
1.  Intravenous infiltrate resulting in pain and swelling 
2.  Significant local intravenous antibiotic infiltrate 
 Hospital-Acquired Infections (2) 
 Gastrointestinal infection (2) 
1.  Infection (Clostridium difficile) that developed following treatment for bacterial pneumonia 
2.  Infection (Clostridium difficile) that developed following antimicrobial treatment for enterococcal septicemia 
 Other (3) 
 Nonmedication allergic reaction (2) 
1.  Contact dermatitis 
2.  Allergic reaction to adhesive tape 
 Fall  (1) 
 Fall occurring during the hospital stay 
Source:  OIG analysis and medical review of 278 Medicare beneficiaries hospitalized in two selected counties, 2008 
 
 
 
 
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Agency Comments:  Agency for Healthcare Research and Quality 
  OEI-06-08-00220  ADVERSE EVENTS IN HOSPITALS:  CASE STUDY OF INCIDENCE AMONG MEDICARE BENEFICIARIES  38   
A P P E N D I X   ~   H  
 
Agency Comments: Center for Medicare & Medicaid Services 
 
 
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 A C K N O W L E D G M E N T S  
This report was prepared under the direction of Kevin K. Golladay, 
Regional Inspector General for Evaluation and Inspections in the Dallas 
regional office, and A. Blaine Collins, Deputy Regional Inspector 
General for Evaluation and Inspections.   
Amy Ashcraft and Ruth Ann Dorrill served as team leaders for this 
study.  Other principal Office of Evaluation and Inspections staff from 
the Dallas regional office who contributed to the report include Tom 
Browning, Deborah Cosimo, Anthony Guerrero-Soto, Sai Loganathan, 
Christi Macrina, Deborah McGurk, Jeremy Moore, Lyndsay Patty, and 
Susan Wolfe; other regional and central office staff who contributed 
include Rob Gibbons, Veronica Gonzalez, Scott Hutchison, Sue 
Nonemaker, Julie Taitsman, M.D., and Rita Wurm.  
 
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