Clinical Classification Systems · 8 min read
Apply Inpatient Coding Guidelines
Inpatient coding assigns diagnosis and procedure codes for patients formally admitted to a hospital by a physician's order. ICD-10-CM reports diagnoses and ICD-10-PCS reports procedures. Inpatient codes drive MS-DRG assignment, quality reporting, and healthcare statistics, so the rules for selecting the principal diagnosis and reporting additional diagnoses are tested heavily.
The ICD-10-CM Classification
The International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) is the HIPAA-mandated code set for reporting diagnoses in every U.S. healthcare setting. It contains more than 70,000 codes organized into 22 chapters by body system or etiology. Codes are alphanumeric and three to seven characters long: the first character is a letter, the second is a number, and the third may be a number or a letter (for example, C7A). A decimal point follows the third character.
| Rule | What to do | Example |
|---|---|---|
| Placeholder X | Use X to fill empty character positions when a 7th character is required | T50.905A needs no placeholder; T15.02XA fills position 6 with X |
| Injury 7th character A | Active treatment (surgery, ED, evaluation by a new physician) | S72.001A at hospital admission for hip fracture repair |
| Injury 7th character D | Subsequent encounter during healing or recovery | Cast change or follow-up visit after treatment |
| Injury 7th character S | Sequela (late effect) | Scar contracture after a burn |
| Invalid code | A code missing a required character is invalid and will be rejected | S52.52 is incomplete |
Official Guidelines for Coding and Reporting
Appendix I contains the present on admission (POA) reporting guidelines. The guidelines are a HIPAA-required companion to the code set; adherence is required when assigning ICD-10-CM codes.
ICD-10-CM Conventions
Coding begins in the Alphabetic Index, where main terms (conditions, injuries, eponyms) are listed with indented subterms. The code is then verified in the Tabular List, which arranges codes in categories, subcategories, and codes and contains the instructional notes that must be followed. Never assign a code from the Index alone.
| Convention | Meaning | Coding action |
|---|---|---|
| Includes | Clarifies conditions included in a category | Use as a guide to the content of the category |
| Excludes1 | "NOT CODED HERE": the two conditions cannot occur together | Never report both codes, except when the conditions are unrelated |
| Excludes2 | "Not included here": the excluded condition is a different condition | Both codes may be reported when both conditions exist |
| Code first | The underlying condition must be sequenced first | Sequence the etiology, then the manifestation |
| Use additional code | An additional code is needed for a complete picture | Add the code after the current code |
| Code also | Two codes may be needed; sequence depends on the circumstances | Sequence by the reason for the encounter |
| NEC | Not elsewhere classified: documentation is specific but no specific code exists | Assign the 'other specified' code |
| NOS | Not otherwise specified: documentation lacks detail | Assign the 'unspecified' code only when no further detail is documented |
| See / See also | Cross-references in the Alphabetic Index | 'See' must be followed; 'see also' points to another possibly useful entry |
| With / in | Presumed causal relationship between conditions linked in the Index | Code as related unless the provider documents they are unrelated |
| Brackets [ ] | In the Index, a manifestation code listed second | Sequence the bracketed code after the etiology code |
Selection of Principal Diagnosis
The Uniform Hospital Discharge Data Set (UHDDS) defines the principal diagnosis as "that condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care." The phrase after study means the coder looks at the whole stay, not just the admitting diagnosis.
| Situation | Principal diagnosis |
|---|---|
| Symptom with a confirmed underlying cause | The underlying condition; integral symptoms are not coded |
| Two or more diagnoses equally meet the definition | Either may be sequenced first unless the circumstances of admission, therapy, the Tabular List, or the Index indicate otherwise |
| Two or more comparative or contrasting conditions ('either/or') | Code both as if confirmed and sequence according to the circumstances of admission |
| Uncertain diagnosis at discharge ('probable', 'suspected', 'likely', 'questionable', 'possible', 'still to be ruled out', 'compatible with', 'consistent with') | Code as if established (short-term, acute, long-term care, and psychiatric hospitals) |
| Admission from observation or outpatient surgery | The condition that caused the inpatient admission (for postoperative complications, the complication) |
| Admission for a complication of surgery or care | The complication code |
| Original treatment plan not carried out | The condition that occasioned the admission, even though treatment was not performed |
Reporting Additional Diagnoses
UHDDS defines other diagnoses as conditions that coexist at admission or develop subsequently and affect patient care. Report a secondary condition when it requires at least one of the following:
- Clinical evaluation
- Therapeutic treatment
- Diagnostic procedures
- Extended length of hospital stay
- Increased nursing care and/or monitoring
Do not code conditions from a previous admission that no longer affect care, but history codes (Z85–Z87) and status codes may be reported when they influence current care. Abnormal findings (laboratory, X-ray, pathology) are not coded unless the provider indicates their clinical significance. When a condition has both acute and chronic forms with separate codes and no combination code, code both and sequence the acute code first.
The ICD-10-PCS Procedure Coding System
ICD-10-PCS reports procedures performed in the hospital inpatient setting. It contains roughly 79,000 codes, each exactly seven alphanumeric characters long. The letters O and I are never used, so they cannot be confused with zero and one. Codes are built from the PCS Tables, where every character value must come from the same table row.
Root Operations
The root operation (character 3) describes the objective of the procedure. The Medical and Surgical section uses 31 root operations. Choosing the root operation that matches the documented objective is the most frequently tested PCS skill.
| Group | Root operations |
|---|---|
| Take out some or all of a body part | Excision (portion, no replacement), Resection (all of a body part), Detachment (extremity), Destruction (eradication by energy, force, or agent), Extraction (pulling or stripping out) |
| Take out solids, fluids, or gases | Drainage (fluids or gases), Extirpation (solid matter such as a calculus or clot), Fragmentation (breaking solid matter into pieces) |
| Involve cutting or separation only | Division, Release |
| Put in, put back, or move living body part | Transplantation, Reattachment, Transfer, Reposition |
| Alter the diameter or route of a tubular body part | Restriction, Occlusion, Dilation, Bypass |
| Always involve a device | Insertion, Replacement, Supplement, Change, Removal, Revision |
| Involve examination only | Inspection, Map |
| Other repairs | Control (stopping or attempting to stop postprocedural or other acute bleeding), Repair (restoring function, used only when no other root operation applies) |
| Other objectives | Fusion, Alteration (cosmetic), Creation (new genital structure) |
| Value | Approach | Example |
|---|---|---|
| 0 | Open | Open cholecystectomy through an abdominal incision |
| 3 | Percutaneous | Needle biopsy of the liver |
| 4 | Percutaneous endoscopic | Laparoscopic or arthroscopic procedure |
| 7 | Via natural or artificial opening | Urinary catheter insertion |
| 8 | Via natural or artificial opening endoscopic | Colonoscopy, EGD, cystoscopy |
| F | Via natural or artificial opening with percutaneous endoscopic assistance | Laparoscopic-assisted vaginal hysterectomy |
| X | External | Closed reduction of a fracture; skin procedures |
Present on Admission (POA) Indicator
| Value | Meaning |
|---|---|
| Y | Diagnosis was present at the time of inpatient admission (includes conditions developing in the ED or observation before the inpatient order) |
| N | Diagnosis was not present at the time of inpatient admission |
| U | Documentation is insufficient to determine whether the condition was present (query the provider) |
| W | The provider is clinically unable to determine whether the condition was present |
| Blank | Code is exempt from POA reporting (listed in Appendix I) |
POA reporting is required for all diagnosis codes on inpatient claims for acute care hospitals. Medicare does not pay the higher DRG for certain hospital-acquired conditions (HACs), such as catheter-associated urinary tract infections and stage 3 or 4 pressure ulcers, when the condition is reported with POA indicator N or U.
Complications and Comorbidities
A comorbidity is a pre-existing condition that affects treatment; a complication arises during the stay. CMS designates certain secondary diagnoses as CCs or MCCs because they increase resource use. Reporting a documented CC or MCC can move a case to a higher-weighted MS-DRG. A CC or MCC does not count when it appears on the CC exclusion list for the principal diagnosis.
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