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Comprehensive Error Rate Testing

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Selecting the Appropriate Principal Diagnosis for Inpatient Services

CERT analysis indicates providers are not coding the principal diagnosis to the highest level of specificity and/or selecting the most appropriate code for the inpatient services. This has resulted in changes to the originally submitted DRG and consequently causing overpayments or underpayments to facilities.

As stated in the Centers for Medicare & Medicaid Services (CMS) Internet-Only Manual (IOM) Publication 100-04, Medicare Claims Processing Manual, Chapter 23, Section 10.2 (1.75 MB): 

The definition of:

  • Principal diagnosis is the condition established after study to be chiefly responsible for the admission. Basically, the principal diagnosis is based on admitting information and the findings from all related diagnostic testing.
  • Admitting diagnosis is the condition identified by the physician at the time of the patient’s admission requiring hospitalization.
    • Generally, the admitting diagnosis identifies the patient's condition based on the presenting signs and symptoms. Why did the patient come to the hospital? What is their complaint?

When identifying and selecting the principal diagnosis, remember that the admitting diagnosis and the principal diagnosis are not necessarily going to be the same.

For example, a patient presenting with acute respiratory distress and a history of known lung disease may have an admission diagnosis of “acute exacerbation of bronchitis.” However, following review of further diagnostic testing the cardiac enzymes and serial EKGs indicate a myocardial infarction (MI). The patient would not have experienced respiratory distress if the MI had not occurred. The MI is established after admission as the primary reason for the patient's symptoms and the admission, therefore, the principal diagnosis of MI is established. In retrospect, the principal diagnosis may be different from the admitting.

Whenever possible, the medical documentation should provide sufficient evidence of the actual underlying cause of the inpatient admission, not just the symptoms and/or presumptive diagnoses. Coders should review the complete medical record for the appropriate principal diagnosis, the condition known to have caused the admission once all pertinent diagnostic testing is complete.

The CERT contractor also makes many changes to remaining diagnosis codes billed and at times procedures codes billed. The CERT contractor has advised to be sure that coding is not just based on results of diagnostics performed; coding must be based on physician’s conclusions as documented in the record. For procedure codes, careful examination of procedure reports is recommended. CMS IOM Publication 100-04 Medicare Claims Processing Manual, Chapter 23, Section 10 and 20 (1.75 MB)gives guidance for coding of all diagnosis and procedure codes.

Revised: 9/2016
Original posted date: 6/2010

Selecting the Appropriate Principal Diagnosis for Inpatient Services
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