A system and method for managing bad blocks in a hardware accelerated caching solution are provided. The disclosed method includes receiving an Input/Output (I/O) request, performing a hash search for the I/O request against a hash slot data structure, and based on the results of the hash search, either performing the I/O request with a data block identified in the I/O request or diverting the I/O request to a new data block not identified in the I/O request. The diversion may also include diverting the I/O request from hardware to firmware of a memory controller.