1.3 Secondary Diagnoses Reporting & Present on Admission (POA) Indicators

Secondary Diagnoses Reporting & Present on Admission (POA) Indicators

AHIMA CCS Exam Focus: Inpatient coders must accurately identify reportable secondary diagnoses and assign the correct Present on Admission (POA) indicator to reportable diagnoses on applicable inpatient claims, using the CMS exemption indicator for codes on the POA-exempt list. On the CCS exam, you will encounter questions evaluating whether chronic conditions meet reporting thresholds, whether abnormal laboratory findings can be coded without physician documentation, and how POA flags affect Complication or Comorbidity (CC) and Major Complication or Comorbidity (MCC) status under the CMS Hospital-Acquired Condition (HAC) reduction rules.

---

1. UHDDS Secondary ("Other") Diagnoses Criteria

The Uniform Hospital Discharge Data Set (UHDDS) defines "Other Diagnoses" (secondary 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."

The 5 UHDDS Clinical Reporting Criteria

For a co-existing or newly developing condition to be reported as a secondary diagnosis, it must satisfy at least ONE of the following five clinical criteria during the inpatient stay:

                  UHDDS Reporting Thresholds (Must Meet ≥ 1)
 ┌─────────────────────────┬─────────────────────────┬─────────────────────────┐
 │ 1. Clinical Evaluation  │ 2. Therapeutic Treatment│ 3. Diagnostic Procedures│
 ├─────────────────────────┼─────────────────────────┼─────────────────────────┤
 │ 4. Extended Length Stay │ 5. Increased Nursing Care and/or Monitoring       │
 └─────────────────────────┴─────────────────────────┴─────────────────────────┘

1. Clinical Evaluation: Documented physician assessment, bedside examination, progress note monitoring, or specialist consultation (e.g., endocrinology consult for poorly controlled hyperglycemia).
2. Therapeutic Treatment: Administration of prescription medication, IV fluid titration, respiratory therapy, surgery, physical therapy, or specific dietary modifications (e.g., initiating sliding-scale insulin, potassium repletion).
3. Diagnostic Procedures: Laboratory tests, imaging studies, biopsies, cardiac telemetry, or specialized physiological monitoring performed specifically to evaluate the condition (e.g., serial troponins, echocardiogram, renal ultrasound).
4. Extended Length of Hospital Stay: The condition directly prolongs the patient's hospitalization beyond what was expected for the principal diagnosis (e.g., patient kept an extra 48 hours for IV antibiotic desensitization or monitoring of cardiac arrhythmia).
5. Increased Nursing Care and/or Monitoring: Special nursing interventions, strict intake/output (I&O) recording, frequent neurological checks, complex wound dressing changes, or aspiration precautions.

Reporting Chronic Conditions

A documented chronic condition is reportable when it meets the same UHDDS additional-diagnosis criteria as any other condition—for example, it is evaluated, treated, monitored, increases nursing care, or extends the stay. Continuation or adjustment of medication, relevant laboratory or respiratory monitoring, and effects on procedural planning can demonstrate that a condition affected care. Do not report a chronic diagnosis merely because it appears on a problem list; verify that the record shows a qualifying effect on the current stay.

Historical Conditions & Conditions Not Meeting Criteria

• Conditions that No Longer Exist: Conditions previously resolved or cured (e.g., resolved childhood asthma, prior appendectomy) that have no bearing on current medical decision-making are not reportable.
• Personal/Family History Codes (Z80–Z87): May be reported as secondary diagnoses only if the historical condition influences current treatment, surveillance, or procedural approach (e.g., Z87.891 Personal history of nicotine dependence, Z85.3 Personal history of malignant neoplasm of breast for a patient on maintenance tamoxifen therapy).
• Incidental Findings: An incidental finding on a diagnostic report (e.g., asymptomatic simple liver cyst on CT scan, mild asymptomatic diverticulosis) that receives no evaluation, monitoring, or treatment does not meet UHDDS criteria and must not be coded.

---

2. Coding Abnormal Laboratory and Diagnostic Findings (Guideline III.B)

One of the most critical compliance rules in medical coding governs abnormal diagnostic test values:

Strict Compliance Directive: Coders must NEVER assign a diagnosis code based solely on an abnormal laboratory, radiologic, or pathology finding. A diagnosis code can only be assigned if the treating physician documents the clinical condition and confirms its clinical significance in the medical record.

---

3. Present on Admission (POA) Reporting Guidelines

Under the Deficit Reduction Act (DRA) of 2005, Present on Admission (POA) reporting is federally mandated for all diagnosis codes submitted on UB-04 (CMS-1450) and 837I electronic institutional claims by acute care Inpatient Prospective Payment System (IPPS) hospitals.

Legal Definition of POA

"Present on Admission is defined as present at the time the order for inpatient admission occurs."

• Critical Timing Rule: Conditions that develop during an outpatient encounter (such as in the Emergency Department, Observation Care, or Outpatient Surgery) BEFORE the formal inpatient admission order is written are classified as PRESENT ON ADMISSION (Y).

Timeline of Inpatient Stay and POA Determination:
[ED / Observation Stay] ───────► [Inpatient Admission Order Written] ───────► [Inpatient Care / Discharge]
 └─── Conditions Arising HERE = 'Y' ───┘   └─── Conditions Developing HERE = 'N' ───┘

The 5 Official POA Indicators

---

4. CMS Hospital-Acquired Conditions (HAC) & DRG Impact

To incentivize patient safety, Medicare established the Hospital-Acquired Condition (HAC) Reduction Policy. Under this statute, CMS identifies specific high-cost, high-volume conditions that are considered reasonably preventable through evidence-based clinical guidelines.

Key CMS HAC Categories

1. Foreign Object Retained After Surgery (T81.5-)
2. Air Embolism (T80.0-, T81.7-)
3. Blood Incompatibility (T80.3-)
4. Stage 3 and Stage 4 Pressure Injuries acquired in-hospital (L89.-)
5. In-Hospital Falls and Trauma (Fractures, dislocations, intracranial injuries sustained in hospital)
6. Catheter-Associated Urinary Tract Infection (CAUTI) (T83.511-)
7. Vascular Catheter-Associated Bloodstream Infection (CLABSI) (T80.211-)
8. Surgical Site Infections (SSI) following orthopedic, CABG, or bariatric surgery
9. Manifestations of Poor Glycemic Control (Diabetic ketoacidosis, hyperosmolar coma, hypoglycemic coma developing in-hospital)
10. Deep Vein Thrombosis (DVT) / Pulmonary Embolism (PE) following total knee or total hip replacement

The HAC Payment Mechanism

In the Inpatient Prospective Payment System (IPPS), a secondary diagnosis can function as a Complication or Comorbidity (CC) or a Major Complication or Comorbidity (MCC), significantly increasing the MS-DRG relative weight and hospital reimbursement.

graph TD
    A["Secondary Diagnosis on Claim is a CC or MCC"] --> B{"Is Condition a CMS-Designated HAC?"}
    B -- "No" --> C["POA Status 'Y' or 'N' -> CC/MCC Weight Granted"] 
    B -- "Yes" --> D{"What is the POA Indicator?"}
    D -- "POA = 'Y' (Present at Admission)" --> E["CC/MCC Tier Elevation Granted<br/>• Full MS-DRG Reimbursement Paid"]
    D -- "POA = 'N' or 'U' (Not POA for payment)" --> F["This HAC diagnosis is not used as a CC/MCC for MS-DRG payment<br/>• Final tier still depends on every other reportable diagnosis"]

• Financial Consequence: If a patient develops a Stage 4 hospital-acquired pressure injury (an MCC) while hospitalized (POA = N), CMS MS-DRG software suppresses the MCC status of that pressure ulcer. If no other MCC exists on the claim, the hospital is paid at the lower base MS-DRG rate, preventing the hospital from profiting from the complication.