Healthcare Admission Indicators and DRGs

POA Indicator

• Present on admission (POA) indicators are required by the Deficit Reduction Act of 2005.
• They differentiate conditions present at admission from those developed during it.
• Purpose: financial incentives for hospitals reducing hospital-acquired conditions.
• Reporting options: Y (yes, POA), N (no, not POA), U (unknown), W (clinically undetermined), 1 (exempt from POA reporting).
• Combination Code Handling: If a combination code involves a chronic condition and exacerbation, assign "N" if any portion of the code was not POA, and "Y" if all parts were POA.

APR-DRGs and MS-DRGs

• APR-DRG stands for all-patient refined diagnosis-related group, MS-DRG for Medicare severity diagnosis-related group;
• Differences: severity classification, complexity, and clinical logic;
• APR-DRGs factor severity of illness (SI) and risk of mortality (ROM).
• SI measures organ dysfunction, ROM measures patient death likelihood.
• Some diagnoses impacting APR reimbursement do not impact DRG reimbursement (e.g., portal hypertension).

Hospital-Acquired Conditions (HACs)

• HACs are unfavorable conditions occurring during hospitalization (infections, decubitus ulcers).
• HACs are also called complications, nosocomial infections, or conditions,
• Reporting is mandated by the Deficit Reduction Act of 2005 for high-cost/high-volume conditions potentially preventable with evidence-based guidance.
• CMS maintains the current list of HACs & the HACRP.
• HACRP adjusts payments for hospitals in the worst-performing quartile based on HAC scores (ratio of HACs to eligible patients).

HACRP

• The Hospital-Acquired Condition Reduction Program (HACRP) is mandated by the Affordable Care Act (effective Oct 1, 2014).
• CMS calculates HAC scores for inpatient prospective payment system hospitals. Scoring is a HACs-to-eligible-patient ratio based on quality measures (e.g., pressure ulcers, pneumothorax).
• A diagnosis is considered hospital-acquired if not POA; otherwise, it's not. (POA indicator determines a HAC).

Advance Beneficiary Notice (ABN)

• ABN stands for advance beneficiary notice of noncoverage (Form CMS-R-131).
• An ABN informs patients of potential noncoverage for planned procedures deemed not medically necessary.
• Patients receive a time to consider options, accept financial responsibility or decline procedure.
• Healthcare entities must confirm medical necessity (using the Medicare Coverage Database or local/national coverage determinations) before issuing ABNs.
• Appeal options to Medicare are available.

Charge Capture Audit

• Charge capture is a clinical department function.
• Charges are generated from specific lists, clinical documentation, or physician orders, and entered manually or automatically.
• Accuracy of charge entry, CPT codes, service units billed, and fair market value are audited to confirm compliance with documentation and prevent False Claims Act penalties.
• Risks include incorrect encounter, insufficient documentation, inaccurate capture, missed charges, and incorrect codes.

Principal and Secondary Diagnoses (PDX and SDX)

• Principal diagnosis (PDX) is the key diagnosis determining the DRG (disease grouping).
• Secondary diagnosis (SDX) is a complication/comorbidity, also impacting DRG selection.
• Coding guidelines emphasize reviewing the entire medical record to establish the definitive cause of admission.

Medical and Surgical Procedures Characters

• Medical/Surgical procedure codes have 7 characters
• Character 1: section (mostly med/surg)
• Character 2: body system
• Character 3: root operation (procedure objective)
• Character 4: body part of procedure
• Character 5: approach to procedure site
• Character 6: device used in procedure
• Character 7: qualifier for procedure