After 1000 PDPM coding audits completed since the PDPM transition, there are many trends our audit team has identified. This week’s blog highlights specific tips for selecting the primary diagnosis in Section I0020B based on common missed opportunities and errors we’ve noted in hopes that it will guide facilities in implementing improvements in preparation for the likelihood of CMS audits aimed at inaccurate coding, insufficient documentation and improper billing.

Accurate Coding and Billing

Accurate coding of diagnoses and assuring that supporting documentation for these diagnoses are referenced in the medical record are important to ensure accurate reimbursement and success under medical review. Diagnoses must meet RAI Manual guidelines in MDS Section I and ICD-10-CM Official Guidelines for Coding and Reporting.  The primary diagnosis that is reflected in I0020B should best describe the primary reason for the Medicare Part A stay.  This ICD.10 code directly impacts reimbursement for the PT, OT and SLP case mix classification groups by placing the resident into a Clinical Category.  There are two look-back periods for this section:

      • Diagnosis identification is a 60-day look-back period.
      • Diagnosis status: Active or Inactive is a 7-day lookback period (except for Item I2300 UTI, that has a look-back period of 30 days).

Be cognizant that many ICD.10 codes are listed as Return to Provider (RTP) in the CMS PDPM ICD-10 Mappings and cannot be used as the primary diagnosis.  RTP codes can, however, be accurate diagnosis to represent a comorbidity for SNF residents that can be coded in MDS Section I8000.  These RTP codes (i.e. M62.81 Muscle weakness) can be used to support the need for skilled services and conditions and can be present on the therapy plan of care and in coded in MDS Section I8000.

Z Codes

One of the common missed coding opportunities is related to the use of Z codes.  Per ICD-10-CM Official Coding Guidelines, aftercare Z codes are used when the initial treatment of a disease has been performed (i.e. total hip replacement due to osteoarthritis) and the resident requires continued care during the healing or recovery phase (i.e. surgical wound care and physical therapy for muscle strengthening), or for the long-term consequences of the disease.  For example, a resident’s elective left hip replacement would be assigned the aftercare code Z47.1 as the primary diagnosis in MDS Section I0020B. An additional code Z96.642 would be used to indicate the joint replaced in MDS Section I8000. The aftercare Z code should not be used if treatment is directed at a current, acute disease or aftercare for injuries.  In this case, the diagnosis code is to be used.  When coding an injury (i.e. fracture), the appropriate 7th character (i.e.,D) identifies subsequent care with the diagnosis code.  A resident that fell and sustained a displaced left intertrochanteric femur fracture would have the primary diagnosis of S72.142D assigned and the aftercare code is not assigned.

Coding Infection

Another common missed coding opportunity is coding sepsis as the primary diagnosis instead of the localized infection, when sepsis meets the definition to be the primary diagnosis.  The Official Guidelines for Coding note if the reason for admission is sepsis and a localized infection, the systemic infection should be coded first.  In example, a resident is admitted with sepsis due to COVID-19 pneumonia.  The principal diagnosis would be viral sepsis (A41.89) followed by codes U07.1 and J12.89, as secondary diagnoses. Reciprocally, if a resident is admitted with pneumonia due to COVID-19 which then progresses to viral sepsis, the principal diagnosis is U07.1, COVID-19 followed by the codes for the viral sepsis and viral pneumonia.

Acute Care Codes

Use of the acute hospitalization diagnosis for the primary diagnosis for the SNF setting may not be appropriate.  Of course, the reason for the skilled care can be a result of the effect(s) of the acute diagnosis that caused the hospital admission.  For instance, a resident may be admitted to the hospital due to acute respiratory failure.  The hospital DC Summary notes that the reason for admission was acute respiratory failure with hypoxia and has been resolved. In this case, the acute respiratory failure with hypoxia would not be the appropriate primary diagnosis for the SNF stay.  A possible primary diagnosis for the SNF setting may be the exacerbation of COPD that caused the acute respiratory failure.

Unspecified Diagnosis

Overuse of unspecified diagnosis codes is also an opportunity.  ICD-10 Coding Guidelines instruct us to code to the highest level of specificity documented.  For example, a resident that requires rehabilitation for right-sided dominant hemiplegia following a cerebrovascular infarction should be assigned the diagnosis code I69.351, Hemiplegia and hemiparesis following cerebral infarction affecting right dominant side, as the principal diagnosis.  Acute stroke codes (ICD-10 I63.-) codes are utilized for the acute in-patient hospitalization; therefore, it would be appropriate to use I69 codes for the sequala in the SNF setting.  Non-specific stroke codes (i.e. ICD-10 I69.90, unspecified sequelae of unspecified cerebrovascular disease) should not be used when the cause/site of the stroke is known or there are specific deficits from the stroke.

Documentation and Best Practices

ICD.10 coding plays a significant role in reimbursement under PDPM.  As such, it is very important to  ensure that whomever is responsible for assigning diagnostic codes has had adequate, reliable ICD-10 training and utilizes a current ICD-10-CM coding manual.  The Official Updates to the volumes of ICD-10 are approved and updated annually.  Also, make sure there is a  back-up individual in the facility who has been educated and is proficient in coding.

Best practice is for the Interdisciplinary Team (IDT) to come together to determine the primary medical condition for the admission with review of all medical record sources for physician diagnoses during Clinical or Medicare/PDPM Meeting.  If a diagnosis/problem list is used, only diagnoses confirmed by the physician and noted as active should be entered. Review that reported codes align with the degree of specificity in the medical record and that unspecified codes are used appropriately.  Request additional documentation from providers that may be needed.  Interview the resident, if able, and family members regarding medical history.  Query the physician for clarification and additional documentation prior to the ARD when there is conflicting, incomplete (i.e. unspecified codes) or vague information in the medical record.

CMS expects that the diagnosis utilized in I0020B and the primary diagnosis on the SNF claim match.  During Triple Check Meeting, the Business Office Manager (BOM) should relay the pre-billing principal diagnosis noted on the UB-04. The MDS Coordinator (MDSC) should verify that the principle diagnosis is accurate, as well as active primary designated in MDS section I0020B.

Providers must be diligent with reviewing the accuracy of diagnoses codes and ensure that diagnosis and coding practices comply with the RAI Manual and ICD-10 coding guidelines.  Failure to address recurrent coding errors may result in potential financial penalties.

Proactive Medical Review partners with SNFs to provide remote pre-bill PDPM coding audits, MDS support services, training and resources.   Contact us today to learn more about how we assist providers achieve consistent coding accuracy.  Please visit our shop for on-demand coding training and resources: .


Proactive’s 2 part ICD-10 training 

Proactive’s PDPM Section GG Coding Toolkit




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

Learn more about Kristen and the rest of the Proactive team.