Since the inception of PDPM, selecting the Primary Diagnosis has been a challenge for MDS/RAI coordinators.  Under PDPM, the diagnosis coded on the 5-day/Initial Minimum Data Set (MDS) in section I0020B largely determines reimbursement for the entire Medicare stay unless an Interim Payment Assessment (IPA) is necessary. It is essential to build strong processes and coding skills for selecting the appropriate diagnosis. Consider these tips for choosing the best Primary Diagnosis.

There are two ways in which diagnosis codes are used under PDPM. First, the SNF is required to report on the MDS the patient’s primary diagnosis for the skilled stay. 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. Secondly, active diagnoses coded in Section I of the MDS are used to capture additional conditions and comorbidities, which can factor into both the SLP comorbidities (that are part of classifying patients under the SLP component), and the NTA comorbidity score (that is used to classify patients under the NTA component).

Determining the primary diagnosis is not always an easy process. The Medicare Benefit Policy Manual, Chapter 8 states, “To be covered the extended care services must have been for the treatment of a condition for which the beneficiary was receiving inpatient hospital services (including services of an emergency hospital) or a condition which arose while in the SNF for treatment of a condition for which the beneficiary was previously hospitalized. 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.”

There may be instances where more than one diagnosis meets the criteria for the primary diagnosis. If more than one diagnosis equally contributes to the need for skilled nursing care, the IDT needs to determine which code to assign based on understanding of the payment categories and the skilled services being provided. It is imperative to have systems in place for selecting the primary diagnosis and ensuring documentation to support coding for all active diagnoses prior to the 5-day assessment completion. So where do you begin? Consider these pointers:

      • Always review the Clinical Category Crosswalk Tool when assigning the primary diagnosis to ensure the diagnosis is valid and not labeled “Return to Provider”.
      • Ensure the primary diagnosis is representative of the primary reason why the resident requires skilled care in the SNF.
        • The reason the resident requires skilled care must be the primary diagnosis that drives the Medicare plan of care.
        • If the resident has multiple diagnoses that will require medically necessary daily skilled services, it is a best practice to document in the medical record the reason the team decided that the diagnosis coded in I0020B would primarily drive skilled coverage.
        • Keep in mind that diagnoses that have been resolved do not drive the resident’s plan of care during their skilled Medicare stay.
      • Ensure the diagnosis has been specified by the physician or physician extender.
        • Refer to the RAI manual for the definition of an active diagnosis
        • The IDT should have open communication with the physician and/or physician extender related to the importance of documenting specific and detailed primary diagnoses.
      • It is possible that the primary diagnosis for the SNF stay may be different from the primary diagnosis from the hospital stay.
      • Establish 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.
      • Ensure you are not assigning an aftercare Z code for injuries such as fractures. Per the ICD-10-CM Official Guidelines for Coding and Reporting, these should be assigned the acute injury code with the 7th character ‘D’ (subsequent encounter).
      • Conduct regular QA audits of coding accuracy and supportive documentation

Understanding of the clinical decision-making process for selecting one primary diagnosis over another is key to capturing appropriate reimbursement and ultimately for guiding optimal care delivery decisions.


Contact Proactive to schedule an ICD.10 Coding workshop for your group with an AHIMA approved trainer.


Jessica Cairns, RN, RAC-CT, CMAC
Clinical Consultant

Learn more about the rest of the Proactive team.