Driving PDPM Operations:  Selecting the Primary Diagnosis

Under PDPM, the diagnosis coded on the 5-day/Initial Minimum Data Set (MDS) in section I0020B (primary reason for skilled stay) largely determines reimbursement for the entire Medicare stay, unless an Interim Payment Assessment (IPA) is necessary. CMS has mapped each primary diagnosis to one of ten PDPM clinical categories based on the cost of care and services for managing the condition. These clinical categories affect the resident’s case-mix adjusted classification under the physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP) components. Therefore, it is imperative to have solid methods in place for selecting the primary diagnosis and ensuring documentation to support coding for all active diagnosis prior to the 5-day assessment completion.

Guidelines and Examples for Selecting the Primary Diagnosis

According to the Medicare Benefit Policy Manual, Chapter 8, the beneficiary must require SNF care for a condition that was treated during the qualifying hospital stay, or for a condition that arose while in the SNF for treatment of a condition for which the beneficiary was previously treated in the hospital. In this context, the applicable hospital condition need not have been the principal diagnosis that actually precipitated the beneficiary’s admission to the hospital, but could be any one of the conditions present during the qualifying hospital stay. Click here to view the guidance manual.

The following are examples given in the ICD-10-CM Official Guidelines for Coding and Reporting FY 2020.

  • When the purpose for the admission/encounter is rehabilitation, sequence first the code for the condition for which the service is being performed. For example, for an admission/encounter for rehabilitation for right-sided dominant hemiplegia following a cerebrovascular infarction, report code I69.351, Hemiplegia and hemiparesis following cerebral infarction affecting right dominant side, as the primary diagnosis.
  • If the condition for which the rehabilitation service is being provided is no longer present, report the appropriate aftercare code as the first-listed or principal diagnosis, unless the rehabilitation service is being provided following an injury. For instance, if a patient with severe degenerative osteoarthritis of the hip, underwent hip replacement and the current encounter/admission is for rehabilitation, report code Z47.1, Aftercare following joint replacement surgery, as the first-listed or principal diagnosis. If the patient requires rehabilitation post hip replacement for right intertrochanteric femur fracture, report code S72.141D, Displaced intertrochanteric fracture of right femur, subsequent encounter for closed fracture with routine healing, as the first-listed or principal diagnosis.

Additional guidance is available in the ICD-10-CM Official Guidelines for Coding and Reporting FY 2020.

Active Diagnosis and the RAI Manual

The primary diagnosis must meet the criteria of the RAI Manual as well as the Coding Guidelines.

  • The diagnosis requires a physician-documented diagnosis (or by a nurse practitioner, physician assistant, or clinical nurse specialist if allowable under state licensure laws) in the last 60 days.
  • Active diagnoses are diagnoses that have a direct relationship to the resident’s current functional, cognitive, or mood or behavior status, medical treatments, nursing monitoring, or risk of death during the 7-day look-back period. For further clarification regarding active diagnosis, please see RAI Manual pp. I-7 through I-15.

IDT Collaboration and Facility Processes

  1. Review all new admissions to see if you are currently receiving detailed enough information from providers upon admission to code all active diagnosis on the 5-day MDS. If you are not, establish a plan for pre-admission documentation improvement to allow an accurate representation of all active diagnosis. Will the hospital provide access to their EHR portal?
  2. Consider establishing a process for assessing staff competency and on-going diagnosis coding training for staff involved in the correct assignment of diagnosis codes.
  3. Discuss the reason for the skilled stay and what resources will be required for the primary diagnosis among the interdisciplinary (IDT) team immediately upon admission.
  4. Use the clinical category mapping tool to identify what category the diagnosis code selected will map to under PDPM. If a “return to provider” code is used in I0020B of the MDS, the claim will be returned for revision of the code entered in I0020B.
  5. Establish a policy/procedure for querying physicians when there is inadequate diagnostic documentation.
  6. Determine if physicians are examining residents and providing documentation in a timely manner for capturing necessary information on the 5-day MDS.
  7. Audit to ensure that IDT assessments and interviews are completed and documented within required timeframes. Lack of adherence to required timeframes may impact regulatory compliance and reimbursement.
  8. Review claims prior to billing in order to confirm the information, and ensure that supporting documentation, including daily skilled notes, are in the medical record. CMS expects the principal diagnosis on the SNF claim to match the primary diagnosis in item I0020B.
  9. Contemplate periodic third-party reviews to validate claims and evaluate supportive documentation included in the medical record.

Consider these Proactive tools and resources to assist with ICD.10 Coding Process Improvement:

Hospital PDPM Quick Guide and DC Checklist

This checklist offers your admission team a quick resource to guide conversations with hospital discharge planners regarding the SNF reimbursement changes under PDPM and the impact on documentation and coding requirements. Click here to learn more about this product in our shop.

PDPM Preadmission Assessment Toolkit

Pre-Admission Screen and Pre-Admission Interview tools guide the SNF admissions team in gathering essential information for estimating care needs and identifying critical factors impacting the PDPM per diem rate. Click here to learn more about this product in our shop.

ICD.10 Coding Webinar

This 1.25-hour webinar focuses on best practices for ICD 10 coding accuracy in preparation for transition to the Patient Driven Payment Model (PDPM). Click here to learn more about this product in our shop.

PDPM Physician Toolkit

The PDPM Physician Toolkit provides the essential information and query process tools providers need to know to effectively partner with SNFs in caring for Medicare residents under PDPM. Click here to learn more about this product in our shop.

PDPM Essentials for Physicians & Pharmacy Webinar

This one hour on-demand webinar will review essential information that Providers and Consulting Pharmacists need to know for successful support of skilled nursing facilities under the Patient Driven Payment Model (PDPM). Click here to learn more about this product in our shop.

PDPM Triple Check Toolkit

This tool kit is intended to assist facilities in establishing and/or updating existing processes to promote clean claims for accurate billing and preparing Triple Check team members for an effective and compliant process in “clean claims” through pre-bill review. Click here to learn more about this product in our shop.


Get more resources in our shop!

Patients rely on you. You can rely on us. Find toolkits, webinars, on-demand trainings, templates, and much more to meet the needs of your facility. Click here to visit our shop.

Blog by Kristen Walden, MSN, RN RAC-CT, Clinical Consultant, Proactive Medical Review

Click here to learn more about Kristen and the rest of the Proactive team.