Effect of POA, CC, MCC, HAC on DRG and Reimbursement in IP coding

Inpatient coding is very interesting. All medical coders can code Outpatient charts but only few coders can code Inpatient charts. Yes, the amount of reports and analysis required for inpatient coding is very high compared to the outpatient coding. Inpatient coding charts characteristics are different from outpatient facility. Below list of report needs to be checked for coding inpatient chart perfectly.

• The history and physical examination report (H&P)
• Progress notes (PNs)
• Consultation(s)
• Operative report(s)
• Laboratory/pathology reports
• Radiology reports
• Minor procedure reports
• Physician orders
• Discharge summary

Finally a DRG codes is generated based on the diagnosis codes and operative procedures. But DRG codes affected with the presence of POA indicators and HAC (Hospital Acquired Coditions).

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HAC: Hospital-acquired condition (HAC) is a condition that affects a patient and that arose during a stay in a hospital or medical facility. It is a designation used by Medicare/Medicaid in the US for determining MS-DRG reimbursement.

Complication or Comorbidity (CC): CC condition also has affect on DRG codes and the reimbursement. Medical coders must capture all the CC condition from the inpatient report for proper reimbursement.

Major complication or Comorbidity (MCC): MCC condition also has affect on DRG codes. These complication increases the use of medical and hospital expenses. Hence, these condition increases the reimbursement and affect the DRG codes directly.

Today, we will just learn about the effect of POA & HAC on the DRG reimbursement. We will take an example and check each scenario while assigning the codes.

Read also: List of Root operations used in ICD 10 PCS codes in Inpatient coding

Coding scenario 1

For example a patient comes with a severe Chest pain and gets admitted. On final diagnosis in discharge summary, physician documents Paroxysmal Atrial Fibrillation (I48.0). The below chart is coded as shown below.

The Final DRG is 310, CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W/O CC/MCC. Now, just note down the Estimated Reimbursement for Medicare patient below, $5734.88

Now, we will see other scenarios which will affect the DRG and reimbursement.

Coding Scenario 2

Suppose in the above example, the physician documents acute kidney failure (AKF) as well, which was already patient is having. Now, AKF is an CC condition, which will affect the DRG and reimbursement, since AKF will also need extra attention from the medical practitioners in the hospital.

Now, as you can see above the DRG change to 309, CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W CC and the Estimated Reimbursement changed to $7658. 

Hence, the conclusion is medical coders should always look for CC or MCC condition which plays an important role in selection of DRG codes and reimbursement process.

Read also: Practice Q&A for CPC & CCS exam for Medical coders

Coding Scenario 3

Now, suppose the patient before admitting the hospital had atrial fibrillation and AKF as per the above scenario. Now, after admitting the patient fall from the bed and get a fracture. Now, this fracture will be considered as hospital acquired condition (HAC). 

HAC condition has not affect to the Estimated reimbursement when the POA indicator is N or U.

As you can see in the above screenshot, the Estimated reimbursement is not changed ($7658), because the HAC condition (Fracture ICD 10 code) has POA indicator as N. 

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CMS will not pay the CC/MCC DRG for those selected HACs that are coded as “N” for the POA Indicator

Here, you have to understand a little bit more. HAC condition when occur because of hospital treatment will not have any effect on the reimbursement, because the patient was not having that condition before admitting. Hence, the hospital has to take care of condition which was developed after admitting. POA indicator N, denotes that the patient was not having that diagnosis before the admission.

Coding Scenario 4

Now, if the above scenario is repeated with a minute change. Let’s say the patient has the fracture before admitting to the hospital. Now, this condition will not qualify for the HAC, since the patient has not developed fracture during hospitalization. But this fracture qualifies for MCC condition, which certainly affects the DRG codes and reimbursement.

CMS will pay the CC/MCC DRG for those selected HACs that are coded as “Y” for the POAIndicator.

Now, here the POA indicator for the Fracture code will be Y. Here, this fracture will need extra medical treatment from the hospital and hence the DRG code will change to 308, CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W MCC & estimated reimbursement will increase to $11865, as shown in above image.

Refrences: https://www.cms.gov/icd10manual/fullcode_cms/p0031.html

https://en.wikipedia.org/wiki/Hospital-acquired_condition