3M™ Potentially Preventable Complications (3M PPCs)

3M PPCs are used by hospitals, payers, government agencies and researchers. A hospital can use the 3M PPC methodology on its own; for example, a hospital can calculate its own PPC rates in a base year and then work to improve future performance. Hospital, payers, government agencies and researchers typically undertake analyses of multi-hospital data sets in order to compare performance and identify opportunities for improvement.

Here are a few examples of the value the 3M PPC methodology can bring to customers:

• Improving quality. Through concerted effort, Maryland hospitals reduced the statewide PPC count by 68 percent (PDF, 542 KB) between 2010 and 2015, from 53,494 to 17,028. The Maryland Health Services Cost Review Commission used the 3M methodology to measure the incidence of potentially preventable complications, compare hospitals on a risk-adjusted basis, and provide the data back to the hospitals to take action. (Note: Maryland uses the term “Maryland Hospital Acquired Conditions” to refer to 3M Potentially Preventable Complications.)
• Public reporting. The New York Department of Health reports risk-adjusted PPC rates for each hospital on its website;.
• Enabling insight. In one Medicaid program, four percent of inpatients experienced at least one potentially preventable complication; however, rates varied by category. For example, in the adult circulatory category, 6.6 percent of patients experienced at least one PPC, while in the adult mental health category the rate was 0.6 percent.
• Paying for outcomes. Texas Medicaid is one of several payers that measures PPCs and provides incentives for PPC reductions.
• Informing collaboration. In New York State, a hospital collaborative used PPCs to identify and improve hospital performance. For example, the collaborative found that patients who developed PPCs were three to four times costlier to treat than patients without a PPC who had the same diagnosis and severity of illness.

3M PPC logic is the same for every user, although different users may use different versions or choose not to report certain 3M PPCs. Each user makes its own decisions about appropriate use, including risk adjustment and comparison of individual hospital performance with an appropriate benchmark. At this time, 3M does not offer any payer-specific PPC software.

3M PPCs are integrated with other 3M patient classification methodologies.

• 3M PPCs are identified from claims grouped using the 3M™ All Patient Refined DRG (APR DRG) methodology. 3M APR DRGs are used to risk adjust PPC rates across hospitals or other inpatient populations.
• 3M PPCs are one of the five 3M potentially preventable events. The others are potentially preventable readmissions, admissions, emergency department visits and services.

3M PPCs are available in the following 3M products:

• 3M™ 360 Encompass™ System
• 3M™ Reimbursement Calculation Software
• 3M™ Core Grouping Software (CGS)
• 3M™ Grouper Plus Content Services (GPCS)
• 3M™ Data to Action Solution
• 3M™ Severe Maternal Morbidity

Available to software licensees on the 3M Customer Support website


• PPC Definitions Manual
• PPC Summary of Clinical Logic Updates
• PPC Norms and Weights Files (Microsoft® Excel file)
• Evaluating the Quality of POA Reporting in Hospital Claims Data

3M experts are available to advise hospitals, health plans, government agencies, and other interested parties on how to obtain maximum value from the use of 3M PPCs. For example, 3M consultants can help hospitals measure the incidence of potentially preventable complications, compare against benchmarks, and help design programs for improvement. 3M consultants can also help payers and other organizations measure PPCs across hospitals, design pay-for-outcomes incentive methods, and facilitate learning collaboratives to reduce PPCs and improve care.

The unit of analysis is an inpatient stay at an acute care hospital. All the data required to do a 3M PPC analysis can be obtained from a standard inpatient hospital discharge record, such as the UB-04 form or the X12N 837I electronic transaction. An individual discharge record does not need to be linked to other records or to an eligibility file. Each stay is first assigned to a 3M™ All Patient Refined DRG (APR DRG) and then examined for the presence of one or more PPCs. Data fields that are particularly important include all diagnosis codes, present on admission (POA) indicators, ICD-10-PCS procedure code, and procedure code dates. Because it is important whether or not a diagnosis was present on admission, 3M recommends that any 3M PPC analysis include an evaluation of the likely accuracy of POA indicators. Suggested criteria are available on the 3M Customer Support website.

Despite advancements in modern hospital care, quality problems remain, impacting patient outcomes and provider costs. In the early 2000s, 3M assembled a team to develop a methodology that could identify situations in which hospital care was less than excellent. The team chose not to focus on unambiguous errors (such as blood transfusion mismatches or foreign objects left in surgical patients) but instead adopted a broader perspective. The resulting methodology, 3M™ Potentially Preventable Complications (PPCs), was first published in the Health Care Financing Review in 2006. Since then, the methodology has been regularly updated and increasingly adopted across the U.S.

The 3M™ Potentially Preventable Complications (PPC) Grouping Software applies sophisticated clinical logic to identify over 60 groups of potentially preventable inpatient complications, including stroke, respiratory failure, pneumonia, venous thrombosis, liver complications, Clostridium difficile colitis, in-hospital trauma, pressure ulcers, cellulitis, acute mental health changes, and obstetric complications. Each 3M PPC is also assigned to one of eight PPC groups (e.g., perioperative complications or infectious complications) and to a PPC level of “major,” “other” or “monitor.”

The 3M PPC software identifies conditions not present on admission and determines whether they were potentially preventable given patient characteristics, reason for admission, clinical procedures and interrelationships among underlying medical conditions. The presence of a PPC typically, but not always, increases the cost of hospital care. Using all-payer data from California and Maryland, 3M researchers found that approximately nine percent of hospital inpatient cost was due to potentially preventable complications.

The 3M PPC risk adjustment methodology, with its emphasis on patient-specific severity of illness, is an alternative to the approaches taken by CMS. The Medicare and Medicaid hospital acquired conditions list has no risk adjustment at all, while the Medicare Hospital Acquired Condition Reduction Program (HACRP) includes only crude adjustment such as the number of beds or self-reported designation of intensive care units. Unlike the 3M PPC approach, HACRP scores tend to systematically penalize hospitals that treat the sickest patients, raising questions of accuracy and fairness.

Importantly, PPCs are a categorical approach to quality measurement that enables clinicians and hospital managers to drill into the results. Even if overall performance is good, opportunities for improvement usually exist. For example, a hospital’s overall performance might be “as expected” but its rate for PPC 21 (C. Diff. Colitis) might be higher than expected. This finding would lead the hospital to redouble efforts to prevent infection.

The 3M PPCs are identified through diagnosis and procedure codes listed on standard claim forms. The 3M-proprietary clinical logic is maintained by a team of 3M clinicians, data analysts, nosologists, programmers and economists and can be viewed by software licensees in an online definitions manual. 3M releases a new PPC version every October 1 to reflect updates in the ICD-10 diagnosis and procedure code sets and to include enhancements in the clinical classification logic.