Monday, August 19 | Post-Acute Care

Will ICD-10 Coding align LTPAC Facilities and their Attending Medical Groups?

By Netsmart

CMS (Centers for Medicare and Medicaid Services) is forcing payment reform into every corner of its dominion including Post-Acute Care.  Starting October 1, 2019, the new Patient Driven Payment Model (PDPM) will go into effect for Skilled Nursing Facilities (SNF) episodes and present a host of new challenges to these facilities. 

One of the largest challenges will be transitioning payment away from projected therapy minutes to the individual patient’s problems as expressed using ICD-10 Coding.  To address this, Nursing Facilities have been trying to focus on the challenges of learning ICD-10 coding, but this focus may put these facilities on the wrong path. The best solutions shouldn’t assign a complex new burden to an already beleaguered nursing staff.

Physicians and advanced practitioners attending to LTPAC residents must record ICD-10 codes on every patient encounter. It is a prerequisite to getting paid.  Every medical professional is subject to some Value Based Payment scheme; ICD-10 codes are used to risk-adjust their performance benchmarks.  This can be a boon to SNFs if properly leveraged.

So, if each facility has a ready source of ICD-10 Codes created by the attending medical staff, what could go wrong? In a word, plenty.  

The way CMS employs ICD-10 for facilities isn’t aligned with their guidelines for practitioners. The industry needs better strategies to satisfy everyone’s reporting needs.  This article focuses on synchronizing ICD-10 use across facilities and practitioners.

Coordination is key

It is safe to say that Nursing Facilities have limited knowledge of ICD-10 coding because they weren’t direct drivers of payment under the RUG-IV methodology.  This needs to change, quickly. We are fast approaching the final countdown to the start of PDPM for SNF episodes.  

While industry consultants have focused on training Facility Nursing staff on diagnostic coding, CMS regulations paint a very different picture. They have laid out the details in a recently published draft Long-Term Care Facility Resident Assessment Instrument 3.0 User’s Manual Version 1.17 October 2019. The RAI User’s Manual provides rigorous step-by-step instructions on how to complete the various MDS Assessments.

When calculating a new Part A patient’s PDPM reimbursement rate, the first step for a SNF’s is to categorize them by ‘Primary Medical Condition Category.’ That is Item 10020 – Active Diagnosis.  The instructions (pg. 346-357) say:


The items in this section are intended to code diseases that have a direct relationship to the resident’s current functional status, cognitive status, mood or behavior status, medical treatments, nursing monitoring, or risk of death. One of the important functions of the MDS assessment is to generate an updated, accurate picture of the resident’s current health status.


Steps for Assessment

Indicate the resident’s primary medical condition category that best describes the primary reason for the Medicare Part A stay.

Medical record sources for physician diagnoses include the most recent history and physical, transfer documents, discharge summaries, progress notes, and other resources as available.


Coding Instructions

Complete only if A0310B = 01 or 08. Indicate the resident’s primary medical condition category that best describes the primary reason for the Medicare Part A stay; then proceed to I0020B and enter the International Classification of Diseases (ICD) code for that condition, including the decimal. Include the primary medical condition coded in this item in Section I: Active Diagnoses in the last 7 days.


How do these instructions align with the Practitioner’s encounter notes?  CMS has published official guidelines for the use of ICD-10 codes. When Medical Professionals treat newly admitted SNF residents,  they bill the service as a ‘Part B Outpatient encounter’.  For those encounters CMS instructs (pg.102):

ICD-10-CM code for the diagnosis, condition, problem or other reason for encounter/visit.

List first the ICD-10-CM code for the diagnosis, condition, problem, or other reason for encounter/ visit shown in the medical record to be chiefly responsible for the services provided. List additional codes that describe any coexisting conditions. In some cases, the first-listed diagnosis may be a symptom when a diagnosis has not been established (confirmed) by the physician.


There is an important distinction between what the physician’s note addresses (the principal medical problem he/she is treating during the encounter), and the Primary Medical Condition under PDPM.   Medical Practitioners are trained to list a patient’s most significant problem, or chief complaint, first on their problem list.  The encounter note will list this as the Principal or primary diagnosis.

Under PDPM, it is critical that the Facility’s MDS Nurse coordinates with the attending Physician to align diagnoses (problem lists).  While the Physician’s note must state the primary reason for their encounter in the 1st position, SNF’s need the physicians to designate the Primary PDPM Clinical category as part of the problem list in order to complete the admitting MDS within a short window of time.

Last fall, CMS published a file which cross-walked primary medical conditions to PDPM Clinical Categories. The following table shows the number of ICD-10 codes which cross-walk to each of the ten PDPM Clinical Categories.  Note that there are over 24,000 diagnoses which will result in a rejection for payment (return to provider).

Dispelling the myth of the 5-day assessment

When does the Attending Physician need to document their 1st patient encounter under PDPM?

This question is the root of much confusion.  Further complicating the matter, there are multiple correct answers:

  • Ideally, a member for the Medical Practice would make their 1st encounter on the day of, or the day following, admission to the SNF. There are many practical reasons why this isn’t does not happen in the real world.

    • In a recent article in HealthAffairs, the authors merged 3 years of CMS Physician and SNF claims files. With the resulting data set, they were able to calculate the elapsed days between the SNF admission date and the Physician’s 1st They calculated that during the study period 71.5% of the initial assessments occurred within 4 days of admission (~50% occurred in first 2 days).  This data provides some reassurance that records will typically be available before the MDS completion date.

  • By regulation, any Physician encounter which is performed by day 8, and completed by day 14 might be eligible for reference in the Admission MDS. It makes the most sense then, under PDPM, this process should become part of the Physician’s workflow.

CMS doesn’t make regulations easy to digest.

When an individual who is not an MDS expert casually reviews the regulations, volumes of pertinent information can be missed, including:

  • There are multiple MDS forms in existence (the one used during an SNF admission under PDPM is titled a 5-Day Assessment).

  •  This may seem self-explanatory, once you read the RAI manual, it becomes clear that the 5-day assessment can be dated on days 1 through 8 of the stay. In reality, the assessment must be completed by the end of day 14.

  • The MDS Nurse can use/list any diagnosis which received ‘active treatment’ on the reference date or the proceeding 6 days. However, there must be a current Physician’s record within the past 60 days indicating that the SNF episode of care is related to the listed problem.

  • For new patients, it is risky to expect notes from a hospital physician that would adequately reference a future nursing facility admission.


This highlights the emergent need for active communication and revised workflow strategies between physicians and attending medical groups.

How can I align my attending medical groups with my needs under PDPM?

SNFs do not have time to learn coding. Likewise, physicians do not have time to learn each ICD-10 code that will provide the facility with appropriate reimbursement. Reaching across the aisle to develop a documentation strategy that fulfills facility needs may be a tough sell. Instead, both parties should look for solutions that automate the process into their daily workflows.



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