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Potentially Preventable Complications (PPCs) are in-hospital complications that develop after hospital admission and may result from processes or treatment during the inpatient stay rather than from natural progression of the underlying illness. A PPC is potentially preventable based on criteria such as hospital characteristics, reason for admission, procedures, and the interrelationships between underlying medical conditions. Increased costs resulting from PPCs may be passed on to payers because the diagnosis codes linked to the complications often increase the Diagnosis Related Group (DRG) payment.

In an effort to improve health care quality in Texas, public reporting of PPC results was required by the Texas Legislature under Section 98.1046, Texas HSC (S.B. 7, 82nd Legislature, First Called Session, 2011). The Department of State Health Services (DSHS) is required to publicly report information on Texas hospitals regarding risk-adjusted outcome rates for PPCs. The outcome rates have been determined by DSHS to be the most effective measures of quality and efficiency. HHSC must confidentially report the results to each hospital that serves Texas Medicaid clients, and each of those hospitals must distribute the information to its care providers. The report utilizes 3M PPC methodology to identify PPCs. For additional information on the 3M PPC methodology, visit the following link:

PPC Effects on Provider Payments

Managed Care Organizations (MCOs) and hospitals are financially accountable for PPC’s and Potentially Preventable Readmissions (PPR) flagged by HHSC. Based on performance for these measures, adjustments are made to fee-for-service hospital inpatient claims. Additional adjustments are made in each MCOs experience data, which affects capitation rates. Payment adjustments become effective the year following the SFY that was evaluated. For example, adjustment to rates due to PPC and PPR inpatient data from September 1, 2020 to August 31, 2021 will be effective September 1, 2022, to August 31, 2023.

Provider Access to PPC and PPR Performance Reports

Providers are encouraged to access their state fiscal year PPC and PPR hospitallevel PDF reports and excel data files for information on their performance during the state fiscal reporting year. The reports are compiled using fee-for-service claims and managed care organization inpatient data from September 1 – August 31.

Providers may view their reports by accessing their user accounts on the TMHP secure provider portal. To access the portal, visit

  • Click on “Providers”, on the top banner, then click “Log in to My Account,” and enter the proper credentials.
  • The PPC and PPR reports are available for download under the “Potentially Preventable Events (PPE) Provider Reports” tab.

For technical assistance with accessing the provider portal or creating an account, users must contact the TMHP EDI Helpdesk at 888-863-3638, from 7 a.m. to 7 p.m., Central Time. More information can be found at the TMHP Account Activation page:

For more information about the hospital quality-based PPC and PPR program, providers can visit the HHS Potentially Preventable Events (PPE) webpage:

Beginning September 1, 2024 Community First Health Plans, Inc. will be adding STAR+PLUS to its line of health care products.

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