Be Prepared to Assign POA Indicators

Vol. 18 •Issue 5 • Page 8

Be Prepared to Assign POA Indicators

Coders must understand POA indicators and the effect on Medicare reimbursement under IPPS.

A previous CCS-Prep column briefly discussed the 2006 ICD-9-CM Official Guidelines for Coding and Reporting related to reporting the Present on Admission (POA) indicator. This column will go into more detail on the reporting requirements for the POA indicator and will also discuss the Centers for Medicare and Medicaid Services (CMS) identified Hospital-acquired Conditions (HAC) and their codes that, if not present on admission, will not be considered in determining the MS-DRG assignment.

POA Indicator

POA is defined as present at the time the order for inpatient admission occurs. The purpose of the POA indicator is to differentiate between conditions present at the time of admission from those conditions that develop during the inpatient admission. Going forward you cannot code a Medicare inpatient case without also assigning the POA indicator. Therefore, coders must become as proficient in the assignment of the POA indicator as they are in capturing complications and comorbidities (CCs) and major CCs (MCCs).

Reporting Requirements

The Deficit Reduction Act of 2005 (DRA) requires that CMS implement the reporting of the POA indicators for all diagnoses reported on Medicare claims for inpatient acute care discharges beginning Oct. 1, 2007. Critical access hospitals, Maryland waiver hospitals, long-term care hospitals, cancer hospitals and children’s inpatient facilities are exempt from this requirement.

Hospitals that improperly submit the POA indicator for discharges on or after Jan. 1, 2008, will receive remittance advice remark code N36.3 informing them that they failed to report a valid POA indicator: “Alert: in the near future we are implementing new policies/procedures that would affect this determination.” According to CMS when you see this remark code on your remittance advice, it is to alert you that there is a problem with your submission of POA.

Beginning with discharges on or after April 1, 2008, fiscal intermediaries will return claims to hospitals that do not include a valid POA indicator for each diagnosis on the claim. Hospitals will then have to supply the correct POA indicator and resubmit the claim.

POA Reporting Guidelines

The POA indicator is required for the principal and all secondary diagnoses to determine whether a selected condition developed during a hospital stay. Specific instructions on how to select and report the correct POA indicator are included in the “ICD-9-CM Official Guidelines for Coding and Reporting” and in CMS Transmittal 1240.

The POA guidelines are to be used as a supplement to the ICD-9-CM Official Guidelines to facilitate the assignment of the POA indicator for each diagnosis and external cause of injury code reported on the UB-04 and 837 Institutional claim forms. CMS does not require a POA indicator for external cause of injury codes unless they are reported as an “other diagnosis.”

Conditions that develop during an outpatient encounter, including emergency department, observation or outpatient surgery, are considered as POA. Medical record documentation from any provider involved in the care and treatment of the patient may be used to determine whether a condition was POA or not. In this context, the term provider means a physician or any qualified health care practitioner who can legally establish the patient’s diagnosis.

A list of categories and codes exempt from POA reporting is provided in the guidelines. These codes are exempt because they represent circumstances that do not represent a current disease or injury or are always POA.

Assigning the POA Indicator

The POA indicator is reported using one of the following variables:

Y = Yes = present at the time of inpatient admission

N = No = not present at the time of inpatient admission

U = Unknown = the documentation is insufficient to determine if the condition was present at the time of inpatient admission

W = Clinically Undetermined = the provider is unable to clinically determine whether the condition was present at the time of inpatient admission or not

1 = Unreported/Not usedÐExempt from POA reporting = This code is the equivalent code of a blank on the UB-04, however, it was determined that blanks were undesirable when submitting this data via the 4010A1. The “ICD-9-CM Official Guidelines for Coding and Reporting” instructs the use of a Blank for reporting the POA for exempt codes. However, Medicare does require that “1” be reported.

When to assign Y

  • Assign Y for any condition the provider explicitly documents as being POA.
  • Assign Y for conditions that were diagnosed prior to admission. For example: hypertension, diabetes mellitus, asthma.
  • Assign Y for conditions diagnosed during the admission that were clearly present but not diagnosed until after admission occurred. Diagnoses subsequently confirmed after admission are considered POA if at the time of admission they are documented as suspected, possible, rule out, differential diagnosis or constitute an underlying cause of a symptom present at admission.
  • Assign Y for any condition that develops during an outpatient encounter prior to a written order for inpatient admission. For example, a patient undergoes outpatient surgery. During the recovery period, the patient develops atrial fibrillation and the patient is subsequently admitted to the hospital as an inpatient. Assign Y on the POA field for the atrial fibrillation because it developed prior to a written order for inpatient admission.

    When to assign N

  • Assign N for any condition the provider explicitly documents as not present at the time of admission. For example, a patient is admitted to the hospital for a coronary artery bypass surgery. Postoperatively he developed a pulmonary embolism. Assign N on the POA field for the pulmonary embolism. This is an acute condition that was not POA.
  • If the final diagnosis contains a possible, probable, suspected, or rule out diagnosis, and this diagnosis was based on symptoms or clinical findings that were not POA, assign N.

    When to assign U

  • Assign U when the medical record documentation is unclear as to whether the condition was POA. U should not be routinely assigned and should be used only in very limited circumstances. Coders are encouraged to query the providers when the documentation is unclear.

    When to assign W

  • Assign W when the medical record documentation indicates that it cannot be clinically determined whether or not the condition was POA.

    Combination Codes

  • If the combination code only identifies the chronic condition and not the acute exacerbation assign Y. For example, acute exacerbation of CHF.
  • Assign N if any part of the combination code was not POA. For example, obstructive chronic bronchitis with acute exacerbation and the exacerbation was not POA; viral hepatitis B progresses to hepatic coma after admission.
  • Assign Y if all parts of the combination code were POA. For example, patient with diabetic nephropathy is admitted with uncontrolled diabetes.

    Obstetric Conditions

  • If the obstetrical code includes more than one diagnosis and any of the diagnoses identified by the code were not POA assign N. For example, pre-eclampsia or eclampsia superimposed on preexisting hypertension assigned with code 642.7X.
  • If the pregnancy complication or obstetrical condition was not POA assign N. For example, patient admitted in active labor. After 12 hours of labor it is noted that the infant is in fetal distress and a Cesarean section is performed. Assign N for the fetal distress.

    Perinatal conditions

  • Newborns are not considered to be admitted until after birth. Therefore, any condition present at birth or that developed in utero is considered POA and should be assigned Y. This includes conditions that occur during delivery. For example, injury during delivery and meconium aspiration.

    Congenital conditions and anomalies

  • Assign Y for congenital conditions and anomalies. Congenital conditions are always considered POA. For example, congenital hydrocephalus.

    Codes exempt from reporting

  • Codes exempt from reporting are listed in the coding guidelines and are reported with the POA indicator of 1. These codes are exempt because the codes do not represent a current disease or injury or are always POA. For example, old MI, late effects of cerebrovascular disease and normal delivery.

    Why is POA Important?

    POA is important because it helps differentiate between comorbidities and hospital-acquired complications. It is also important because CMS has determined that for some hospital-acquired conditions reimbursement may be affected.

    Hospital-acquired Conditions

    Why is Congress requiring hospitals to go to all the trouble of reporting the POA indicator? The DRA also includes a requirement that by Oct. 1, 2007, Medicare choose at least two conditions that are:

  • High cost, high volume or both
  • Assigned to a higher paying MS-DRG when present as a secondary diagnosis
  • Reasonably preventable through application of evidence-based guidelines

    Beginning Oct. 1, 2008, codes representing these conditions will not be considered when calculating the MS-DRG assignment unless they were POA. In many cases, omission of these codes would result in a MS-DRG with a lower payment weight being assigned to the case. As a result, some hospital-acquired conditions could end up costing facilities much more. The POA condition, resulting in lower reimbursement, only applies when the selected conditions are the only CCs or MCCs present on the claim. If any other CC or MCC, not subject to the hospital-acquired infection provision, is present on the claim, the case will continue to be assigned to the higher-paying CC or MCC MS-DRG, and the MS-DRG assignment will not be affected.

    CMS partnered with the Centers for Disease Control and Prevention (CDC) to identify potential high-volume, hospital-acquired conditions that hospitals could have reasonably prevented. Beginning on Oct. 1, 2008, cases with the following conditions will not be paid at a higher rate unless the conditions were POA.

    1. Serious Preventable Event-Object Left in Surgery: CMS identifies “objects left in during surgery” as a serious preventable event. This means that this event should never occur during the health care encounter. This event is identified by diagnosis code 998.4, Foreign body accidentally left during a procedure.

    2. Serious Preventable Event-Air Embolism: Air embolisms are also identified as a serious preventable event. This event is reported with diagnosis code 999.1, Complications of medical care, NOS, air embolism.

    3. Serious Preventable Event-Blood Incompatibility: Although this event is rare, associated charges per case are high. There are prevention guidelines for avoiding the delivery of incompatible blood or blood products and this event should never occur. Blood incompatibility is identified by diagnosis code 999.6, Complications of medical care, NOS ABO incompatibility reaction.

    4.Catheter-Associated Urinary Tract Infections (UTI): Catheter-associated UTIs are the most common hospital-acquired infection, accounting for more than 1 million cases in hospitals and nursing homes nationwide. It is estimated that hospital-acquired UTIs require one extra hospital day per patient at an estimated annual cost of $424 million to $451 million. These conditions are reported with code 996.64, Infection and inflammatory reaction due to indwelling urinary catheter and one of the following UTI codes; 112.2, 590.10, 590.11, 590.2, 590.3, 590.80, 590.81, 590.9, 595.0, 595.3, 595.4, 595.81, 595.89, 595.9, 597.0, 597.80, 599.0.

    5.Pressure Ulcers: Pressure ulcers, also known as decubitus ulcers, are both a high cost and high volume condition, with more than 322,946 reported cases in FY 2006 with an average hospital charge of $40,381. CMS believes that selection of this condition will result in a closer examination of the patient’s skin on admission, resulting in better quality of care. This diagnosis is identified by diagnosis codes 707.00 through 707.09

    6.Vascular Catheter-Associated Infection: This condition appears to be both high cost and high volume, and there are prevention guidelines available. A new code was created effective Oct. 1, 2007, to report this condition, 999.31, Infection due to central venous catheter.

    7.Surgical Site Infection–Mediastinitis after Coronary Artery Bypass Graft (CABG) Surgery: In its analysis of FY 2006 discharges, CMS identified 108 cases with a secondary diagnosis of mediastinitis in patients who had CABG surgery. These patients had average hospital charges of more than $300,000. This condition is identified in cases where there is both diagnosis code 519.2, Mediastinitis, and one or more of the CABG procedures codes 36.10 through 36.19 on the same claim.

    8.Hospital-AcquiredInjuries–Fractures, Dislocations, Intracranial Injury, Crushing Injury, Burn and Other Unspecified Effects of External Causes: CMS has not yet determined the codes that will be used to identify these conditions. They will be included in the FY 2009 proposed IPPS rule for comment.

    Conditions being considered for FY 2009

    CMS also indicated that they are evaluating the following conditions. They may be included in the FY 2009 proposed IPPS rule for comment:

    1.Ventilator Associated Pneumonia (VAP)

    2.Staphylococcus Aureus Septicemia

    3.Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE)

    This article only discussed the Medicare requirements for POA and hospital-acquired conditions. There are some state-specific requirements regarding the reporting of the POA indicator. To ensure compliance with any state-specific POA reporting requirement it is important to check with the appropriate state hospital association.

    Take some time now to review in detail the FY 2008 ICD-9-CM Official Guidelines for Coding and Reporting related to POA at You may also want to review the CMS Web site on Hospital-ac-quired Conditions at

    After you’ve completed your review, check yourself with the quiz below:

    1. A patient is admitted with Crohn’s disease and has an intestinal resection. After surgery the patient is diagnosed with acute blood loss anemia. The patient is transfused and experiences blood incompatibility during the hospitalization. The patient is discharged on 10/18/08. Diagnosis codes and POA indicators are assigned as follows: 555.1-Y, 285.1-N (CC) and 999.6-N (CC). Which of the following MS-DRGs is correct?

    a.329 Major small and large bowel procedure with MCC

    b.330 Major small and large bowel procedure with CC

    c.331 Major small and large bowel procedure without CC/MCC

    d.None of the above

    2. A patient presents to the ED with dehydration. While in the ED, the patient is overloaded with fluid, which put the patient into CHF. At this point it is decided to admit the patient to the hospital. The diagnoses on discharge are CHF and dehydration due to gastroenteritis. What are the correct POA assignments for this case?

    a.428.0-N, 276.51-Y, 558.9-Y

    b.276.51-Y, 558.9-Y, 428.0-Y

    c.428.0-Y, 276.51-Y, 558.9-Y

    d.558.9-Y, 276.51-Y, 428.0-N

    3.A term baby is born at the hospital. The physician documents a slight hip click on birth, which was evaluated and was determined to be due to a possible subluxation of the hip, which will be worked up after discharge. The baby developed jaundice on the second day and was treated with phototherapy. The diagnoses on discharge are normal newborn, jaundice and left hip subluxation. What are the correct POA assignments for this case?

    a.V30.00-Y, 774.6-N, 754.32-N

    b.V30.00-1, 774.6-N, 754.32, N

    c.V30.00-1, 774.6 ÐY, 754.32-Y

    d.V30.00-1, 774.6-N, 754.32-Y

    This month’s column has been prepared by Cheryl D’Amato, RHIT, CCS, director of HIM, facility solutions, and Melinda Stegman, MBA, CCS, clinical technical editor, Ingenix (, which specializes in the development and use of software and e-commerce solutions for managing coding, reimbursement, compliance and denial management in the health care marketplace.

    Coding Clinic is published quarterly by the AHA.

    CPT is a registered trademark of the AMA.

    Answers to CCS PREP!: 1. b. 330, Major small and large bowel procedure with CC, is the MS-DRG assigned for this case. Even though both the acute blood loss anemia and the blood incompatibility were not POA the reimbursement will not be affected. The reason the reimbursement will not be affected is that even though code 999.6 is ignored during MS-DRG assignment, code 285.1, acute blood loss anemia, which is a CC, is not. Acute blood loss anemia is not subject to the hospital-acquired condition provision; 2. c. The principal diagnosis in this instance is 428.0 with a POA of Y because the patient was admitted to the hospital from the ED specifically for the CHF. Even though the patient was overloaded with fluid and put into CHF while in the ED, the condition was POA when the order was written to admit the patient to the hospital for inpatient care. Codes 276.51 and 558.9 are assigned as secondary diagnoses and were both POA; and 3. d. V30.00 is assigned with a POA indicator of 1 because this code is exempt from POA reporting. Code 774.6, jaundice, is assigned with a POA of N because the condition did not occur until 2 days after admission. Code 754.32, congenital sublexation hip, is assigned with a POA of Y because it is a congenital condition identified at birth. Congenital conditions are always considered POA.

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