Health Information Management

Code with an analytic eye when multiple conditions meet principal diagnosis criteria

JustCoding News: Inpatient, July 7, 2010

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As seasoned coders, we have ingrained in our minds the definition of principal diagnosis, which is the condition established after study to be chiefly responsible for a patient’s admission. However, coders consistently have to face situations in which the clinical documentation appears to support assignment of multiple diagnoses as principal diagnosis when applying the official guidelines.

Principal diagnosis selection is governed by clinical documentation appearing throughout the record, including ED documentation outlining the following:

  • The patient’s presenting signs and symptoms
  • Clinical management and treatment
  • Diagnostic work-up and results
  • Progress note documentation
  • Discharge summary content

The extent to which principal diagnosis assignment is challenging depends on how detailed the clinical documentation is throughout the record, taking into account the relationship of diagnostic work-up and significance of abnormal clinical findings to definitive and provisional diagnoses. Equally challenging is determining whether the patient presented with clinical signs and symptoms that may be traced back to several pertinent, clinically relevant disease processes with which the patient is currently diagnosed.

This poses a distinct compliance issue given the fact that numerous third party initiatives second-guess coder principal diagnosis selection (e.g., Recovery Audit Contractors [RAC] and private commercial insurance efforts). These third party initiatives operate under the pretense and guise of “correct coding” to assign an alternate principal diagnosis that unsurprisingly provides less reimbursement from a MS-DRG assignment perspective.

Admission for more than one clinical condition

Physicians often admit Medicare beneficiaries to hospitals with several ongoing chronic conditions, each directly impacting the clinical management of the patient and contributing to resource consumption during the hospitalization.

More than half of all Medicare beneficiaries receive treatment for five or more chronic conditions each year, and a typical Medicare beneficiary sees two primary care physicians and five specialists working in four different practices, according to the article in the April 2010 issue of Health Affairs, “Chronic Conditions Account for Rise in Medicare Spending from 1987 to 2006.”

Consider the following official guidance from the ICD-9 CM Official Guidelines for Coding and Reporting for selecting the principal diagnosis in the face of apparent “co-principal” diagnoses presentation.

Two or more interrelated conditions, each potentially meeting the definition for principal diagnosis selection

Let’s take a moment to review this particular coding guideline, which states:

In the unusual instance when two or more diagnoses equally meet the criteria for principal diagnosis as determined by the circumstances of admission, diagnostic workup and/or therapy provided, and the Alphabetic Index, Tabular List, or another coding guidelines does not provide sequencing direction, any one of the diagnoses may be sequenced first.

Now turn your attention to the verbiage of “unusual instance.” It is not unusual for patients who present to the ED or who physicians directly admitted to the hospital to have more than one clinical condition where close review of the clinical documentation actually supports two or more diagnoses meeting principal diagnosis selection.

To accurately assign codes, coders must employ a heightened awareness of clinical medicine when they review documentation in the record. Coders must look beyond the face value of clinical documentation and bear in mind the patient’s presenting signs and symptoms, diagnostic work-up and treatment modalities, responses to plans of treatment, and overall clinical outcomes. Coders must also take into account the concept of medical necessity when they select principal and secondary diagnoses.

Although coders are not directly involved in determining medical necessity for inpatient admissions, principal diagnosis selection must take into account medical necessity when two or more distinct clinical conditions appear to equally meet the definition of principal diagnosis.

The financial backbone of RAC operations is centered upon the inaccuracy of ICD-9 code assignment, which affects medical necessity validation. RACs and Medicare administrative contractors (MAC) are charged with ensuring appropriate provider payment under the Medicare program.

A recent widespread probe review performed by Trailblazers (i.e., the MAC for Jurisdiction 4) highlights the need to review principal diagnosis selection. Trailblazers reviewed 100 records from seven providers who exhibited billing patterns higher than their peers did for MS-DRG 392 (esophagitis, gastroenteritis, and miscellaneous digestive disorders without major CCs). Of 91 records, there was a 90.38% paid claims error rate. Ninety-eight percent of actual claims denied were associated with the fact that the medical record documentation did not support the level of service on the claim, and 2% of the denials were associated with incomplete documentation (e.g., incomplete discharge documentation).

Consider these additional noteworthy points stated in Trailblazers’ review:

  • Review of the medical record documentation must indicate that inpatient hospital care was medically necessary, reasonable, and appropriate for the diagnosis and condition of the beneficiary during the stay. Documentation must support there were demonstrated signs and/or symptoms, severe enough to warrant the need for medical care and must receive services of such intensity that they can be furnished safely and effectively only on an inpatient basis.
  • Inpatient care rather than outpatient care is required only if the beneficiary's medical condition, safety or health would be significantly and directly threatened if care was provided in a less-intensive setting
  • “Reasonable and medically necessary” and “supporting documentation” are key elements of medical record documentation. The interdisciplinary team documentation of assessment, intervention and outcomes provides a picture of the patient’s clinical condition and response to treatment. Each component is useful in determining “reasonable and medically necessary” services provided and billed to the contractor for reimbursement.

Lessons learned from Trailblazers review

From this widespread probe review of DRG 392 conducted by Trailblazers, we learn that the assignment of principal diagnoses must incorporate the context of clinical documentation to ensure the most clinically appropriate principal diagnosis and MS-DRG assignment. This includes a close review of the following:

  • History of present illness to validate severity of signs and symptoms
  • Associated treatments and response thereof,
  • Documentation of the interdisciplinary team such as nursing documentation

Consider the following case study:

A 76-year-old female presented to the ED with acute respiratory distress with vital signs of temperature 100 F, RR 28, BP 150/90, HR 110, and initial oxygen saturation of 89% on Room Air. Patient is a known pink puffer/blue boater with stage IV chronic obstructive pulmonary disease (COPD) on home oxygen constant at 2 liters, chronic reparatory failure. In addition, patient is classified as New York Heart Association class III Heart Failure with ejection fraction of 20%, left ventricle systolic heart failure. History of present illness (HPI) indicates patient woke up at 3 a.m. with sudden onset of shortness of breath, could not catch her breath while lying down, and improved by sitting up. This shortness of breath was described as constant with minimal exertion, relieved with 6 liters oxygen supplementation in the ED along with administration of two doses of 80 mg IV Lasix in the ED, continued as part of clinical management in the inpatient setting. Associated chest pain was described in severity as 8 out of 10, responding to nitro paste. Incidentally, patient has known coronary artery disease with previous myocardial infarction and coronary artery bypass graft. Patient also received breathing treatments provided by respiratory therapy in the ED as well as on the hospital floor.

The progress notes included documentation of acute exacerbation of COPD and acute-on-chronic left systolic heart failure; these same diagnoses were included in the discharge summary as well.

On face value, it appears that this scenario illustrates a case in which two or more diagnoses equally meet the definition for principal diagnosis. The physician admitted the patient with COPD exacerbation and acute-on-chronic left-sided systolic heart failure. MS-DRG assignment choices are:

  • MS-DRG 190 (COPD exacerbation with MCC)
  • MS-DRG 290 (heart failure and shock with CC)

A clinically appropriate principal diagnosis selection

To determine the most clinically appropriate and accurate principal diagnosis and MS-DRG assignment, coders must go beyond the explicit clinical documentation and do the following:

  • Evaluate the patient’s presenting signs and symptoms within the HPI
  • Assess response to treatment or lack thereof
  • Take into account nursing documentation of the patient’s condition throughout the stay, including responses to treatment and additional clarification and orders sought and taken from the physician.

We should not convince ourselves that the patient indeed presented with two clinical diagnoses equally meeting the definition of principal diagnosis by virtue of using the analyzer feature of most coding software encoders, which lists and highlights the principal diagnosis that offers the highest reimbursement.

Coding in this fashion will undoubtedly lead to potential compliance problems with principal diagnosis selection under the RAC program, whereby the RAC will resequence the principal diagnosis to the lower paying MS-DRG.

Based on the limited information available in the case study above, it appears that the patient’s presenting signs and symptoms and severity thereof were related to acute exacerbation of left systolic congestive heart failure and accordingly warrants selection as principal diagnosis.

Remember to think clinically when selecting principal and secondary diagnoses codes. To this end, you will ensure the most clinically appropriate principal diagnosis selection, providing the hospital with the appropriate reimbursement for the delivery of the right care at the right time for the right reason in the right setting.

Editor’s note: Krauss is an independent coding consultant in Milton, WI. E-mail him at

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