The Center for Medicare and Medicaid Services (CMS) no longer reimburses hospitals for the costs associated with certain preventable adverse events, many (but not all) of which are considered never events. This report from the federal Office of the Inspector General (OIG) examines the adverse events in a sample of Medicare beneficiaries. As outlined in a previous report, the OIG chose to evaluate the overall incidence of adverse events, including "no pay for errors" conditions, never events, and all other adverse consequences of hospitalization, including non-preventable adverse events. Therefore, the 15% overall incidence of adverse events found in this study should be interpreted with caution. Less than 1% of patients experienced a never event, and approximately 4% experienced a condition on CMS's no pay for errors list.