Principal diagnosis is defined in the Uniform Hospital Discharge Data Set (UHDDS) as the condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital. This is the same definition found in ICD-9-CM and clarified in Coding Clinic. Further, according to Coding Clinic, selecting principal diagnosis includes findings that result from history of illness, any mental status evaluation, physical exam, diagnostic tests or procedures, any surgical procedures, and any pathological examination. Any condition established after such study may or may not confirm the admitting diagnosis.
From an inpatient perspective, principal diagnosis is one of the main drivers for facility reimbursement. Therefore, if the principal diagnosis is incorrect, the reimbursement is incorrect, and the door is wide open for RAC recoupment.
How do you choose the principal diagnosis when you code? Perhaps you use an encoder, a common practice. When you finish coding, you can check to see if you have chosen an optimal code. What you need to know is that the RACs use software that basically does the opposite — they use software “scrubbers” that look at your claims to see if a case has been “maximized,” perhaps causing an improper payment.
One of the most tricky parts of all this is that you must be sure that your principal diagnosis meets both the coding guidelines and medical necessity. We’ve mentioned medical necessity in a previous post, but here’s how the government defines it:
Medical necessity is a service that is reasonable and necessary for the diagnosis or treatment of illness or injury, or to improve the functioning of a malformed body member.
Keep in mind that a RAC can demand repayment for either incorrect coding or lack of medical necessity shown in the documentation. Below is an example of incorrect coding, to show what it can cost your facility.
Consider a patient admitted with Acute respiratory failure due to an overdose of anti-depressants, and subsequently coded as 518.81, Acute Respiratory Failure, which groups to MS-DRG 189 — average payment, $6683.
A RAC review would fault this, however, as incorrectly coded: the Acute respiratory failure was due to the overdose. Therefore, the claim should not have been coded with the admitting diagnosis. Rather, it should have been coded with principal diagnosis of 969.0, Poisoning by psychotropic agents w/o MCC, grouped to MS-DRG 918 — average payment, $3369.
The loss to the facility is 100%, or $6683, and you have no opportunity to resubmit the claim.
Careful attention is required! On our eLearning portal, we have a course that provides much more detail than this post can provide. Go to www.myedutrax.com, then Login or Register for free, and see this course: RACs in Review, A Look Forward: Coding and Billing for Principal Diagnosis.
Or click here to watch a short preview of the course.
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