Diagnosis coding accuracy is paramount to appropriate payment under PDPM, as ICD-10 Diagnosis codes & other patient characteristics are used as the basis for classification in determining Medicare (MCR) payment.  The 5-day/Initial MDS establishes the PDPM payment category for the entire Medicare stay– which is why good processes are paramount for establishing the principal diagnosis and having information to support coding for all active diagnoses prior to the 5-day assessment reference date (ARD).

One of the key drivers of PDPM reimbursement is the clinical category the patient is assigned to based on the principal diagnosis or reason for the skilled stay. The reason for the skilled stay must be discussed immediately upon admission and there needs to be a common understanding between billing, therapy, and nursing on what the primary reason for the skilled stay is. This diagnosis code is coded at I0020B on the 5-day MDS and should be supported by daily documentation supporting the clinical needs and skilled services provided related to this condition.

Active diagnoses also play a major role in setting the payment for the SLP, Nursing, and Non-Therapy Ancillary (NTA) PDPM components. 34 of the 50 items resulting in NTA points are related to active diagnoses coded on the 5-day MDS.

Diagnosis coding accuracy requires consistent interdisciplinary team (IDT) communication, quality provider documentation, efficient systems to capture information for the five-day MDS assessment, and staff with a clear understanding of the ICD-10-CM coding guidelines.

Key processes to ensuring accurate diagnosis coding for PDPM reimbursement include:

      • Ensuring that you are receiving detailed enough information from providers upon admission to code all active diagnosis on the 5-day MDS. Access to the hospital H&P, Discharge Summaries, and IV administration records are all critical to making an informed selection of the most appropriate ARD for the 5-day MDS and evaluating the presence of active conditions.
      • IDT collaboration on determining what the primary diagnosis for the skilled stay is upon admission and using the clinical category mapping tool to identify what category the diagnosis code selected will map to under PDPM. Ensure that staff are including pertinent documentation to support the daily skilled need related to the primary diagnosis and documentation to support that all diagnosis coded on the MDS are active in the 7-day look-back period.
      • Establishing systems to audit and monitor coding accuracy. This includes your internal systems, such as triple check processes, but should also include having periodic reviews from a 3rd party to validate accuracy in coding and that your billing is supported by appropriate medical record documentation.
      • Establishing a process for assessing staff competency in the correct assignment of diagnosis codes.
      • Establishing a process for on-going diagnosis coding training for staff involved in assignment of diagnosis codes.

Proactive experts can meet your needs for development and ongoing implementation of your diagnosis coding improvement plans, including ICD-10 training, coding consultation services and auditing and monitoring of coding accuracy.  Our staff includes AHIMA approved ICD-10 trainers with extensive experience in SNF operations and experts in SNF reimbursement.

Hospital DC Planner and Physician Tools:

Triple Check Toolkit

Supportive Documentation


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Blog by Shelly Maffia, MSN, MBA, RN, LNHA, QCP, CHC, CLNC, Proactive Medical Review

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