A recent OIG report, “Adverse Events in Hospitals: Methods for Identifying Events,” reviews five methods for identifying adverse events in hospitals: nurse reviews of medical records, interviews of Medicare beneficiaries, two types of analysis of hospital billing data, and reviews of internal hospital incident reports. In a two-county case study, physician reviewers determined that 62% of the possible events identified by these five screening methods were not associated with actual events. Moreover, patient diagnosis codes were inaccurate or absent for 7 of the 11 Medicare hospital-acquired conditions (HAC) identified by the physician reviewers, which could impact Medicare payment for HAC-associated care. Reviewed hospitals also did not generate incident reports for 93% of the events, including some of the most serious events. The OIG recommends that CMS and the Agency for Healthcare Research and Quality (AHRQ) explore ways to identify adverse events when conducting medical record reviews for other purposes. CMS also should: (1) ensure that hospitals code claims accurately and completely to allow for identification of Medicare HACs, and (2) provide guidelines for state survey agencies on assessing hospital compliance with adverse event tracking requirements. Finally, AHRQ should inform patient safety organizations that internal hospital incident-reporting systems may provide insufficient information about adverse events. The agencies agreed with the recommendations.