June 25, 2007

Complex and Consequential: Secondary Diagnosis Coding for Severity DRGs
By Judy Sturgeon, CCS
For The Record
Vol. 19 No. 13 P. 6

Coders everywhere are on the alert for the new severity-adjusted diagnosis-related group (DRG) system that Medicare will soon implement. Whether they are employed at a facility that expects to experience profit or loss from the new grouper, one issue is constant and consequential.

Secondary diagnoses—lots of them, not just the first one—will affect the way a hospital is paid for an inpatient claim. The DRGs that never needed a complication or comorbidity (CC) to boost payment may now be affected by one or more additional problems that are being addressed. Those impacted by only one CC can now be additionally reimbursed for multiple financially significant secondary diagnoses. Today, a coder can maintain and improve speed by picking up a single significant secondary condition—and only then if the DRG demands it. In the severity-adjusted DRG system, however, such frugal coders will become endangered.

Educational opportunities are coming out of the woodwork like termites after an exterminator visit—audio, Web and live conferences, consultants, and books. Somebody is ready and willing to help HIM professionals reap a profit from this exciting new fiscal field. All offer the same product—they want to teach you how to make the most of the available documentation to take advantage of the new payment grouper. Since this generally means picking up more secondary diagnosis codes, it should be simple, even without expensive consultant packages. We simply code everything, right? Wrong. It is imperative to remember an important fact: Only the grouper is changing, not the coding rules.

Before the coding staff feels the temptation to code every noun on the chance that one may make a severity adjustment to the payment, be certain they follow the most basic of coding guidelines. To assign a code for a secondary diagnosis, several conditions must be met.

Signs and symptoms integral to the disease process should not be assigned as additional codes unless otherwise instructed by the classification. To ignore this rule and code all the component signs and symptoms of a specific diagnosis is overcoding—if it results in additional payment to the facility, then it’s also abuse or fraud. A congestive heart failure DRG is currently not affected by incorrectly including a code for associated acute pulmonary edema. Future groupers may make this a tempting error, but coding ethics and compliance sanctions prohibit the practice.

A combination code is a single code used to classify two diagnoses—a diagnosis with an associated secondary process (manifestation) or a diagnosis with an associated complication. This guideline reminds us that when the index and/or tabular directs us to a combination code, we may not disregard the single code in favor of multiple code reporting, even if the result is an increased indicator for severity of illness or risk of mortality.

While there are rare exceptions, the following caveat nearly always applies to the coding of secondary diagnoses: Even if the physician clearly documents the condition, it must affect patient care on this encounter to be valid for coding and DRG assignment. In case anyone is unsure of what that means, the official coding guidelines spell it out.

For reporting purposes, the definition for other diagnoses is interpreted as additional conditions that affect patient care in terms of requiring clinical evaluation, therapeutic treatment, diagnostic procedures, extended length of hospital stay, or increased nursing care and/or monitoring.

The Uniform Hospital Discharge Data Set item 11-b defines other diagnoses as “all conditions that coexist at the time of admission, that develop subsequently, or that affect the treatment received and/or the length of stay. Diagnoses that relate to an earlier episode which have no bearing on the current hospital stay are to be excluded.”

From the chapter-specific newborn section of these guidelines, add one additional criteria that will validate inclusion of a secondary diagnosis for newborns only that “has implications for future healthcare needs.”

As a result of this combination of directives from the **ICD-9-CM Official Coding Guidelines##, it is clear that the coder may not begin including every diagnosis, symptom, sign, and medical problem throughout the patient’s medical history. Even when the rules are clearly spelled out as they are here, what seems crystal clear to one reader may be clear as mud to another. The payer may well decide that clinical evaluation means requiring a special consult, or extended length of stay must mean a full additional day of care. The coder or facility, on the other hand, may be absolutely certain that routine laboratory tests constitute clinical evaluation, and any delay in discharge, whether hours or days, qualifies as an extended length of stay.

Suppose coders everywhere pick up all valid secondary diagnoses affecting severity payments under the new system. For the sake of theory, say that payers agree and approve millions of additional dollars to the nation’s hospitals no matter what their previous profit margin may have been.

There is another catch to the cash cow we imagine on the horizon. Her fiscal milk has been declared as budget neutral, meaning there cannot be a universal windfall. Much like the law of conservation of mass and energy, for every action there is an equal and opposite reaction. For every dollar that ups the ante for Hospital A, somewhere there’s a Hospital B that’s going to be wondering where its dollar went.

In theory, this new payment plan will move some specialty hospitals’ profits to relieve the budget deficits of facilities that treat severe and complicated cases. Despite long stays and multiple medical problems, these cases receive the same DRG payment as the simple cases treated elsewhere. Should improved and corrected coding result in a universal payment increase, the system is preconceived with a calculation to adjust for this “DRG creep” and will proportionally lower everyone’s severity-adjusted payments to keep national spending within the budget of available funds.

If we think coding is complicated and time-consuming now, we can anticipate worse conditions with the advent of severity DRGs and the secondary diagnosis code issues they create. Perhaps we need to devise our own updated definition of a CC. Rather than complication or comorbidity, we’d do well to start thinking of them as “caution coders” or perhaps “compliance concern.”

Begin your education on the severity-adjusted system now instead of waiting until implementation. Remember, it is today’s data that determines tomorrow’s reimbursement rates.

— Judy Sturgeon, CCS, is the hospital coding senior manager at The University of Texas Medical Branch in Galveston and a contributing editor at For The Record. While her initial education was in medical technology, she has been in hospital coding and appeal management for the past 18 years.

Note: The complete **ICD-9-CM Official Coding Guidelines for Coding and Reporting## can be viewed online at www.cdc.gov/nchs/datawh/ftpserv/ftpicd9/icdguide06.pdf.