Pathology/Lab Coding Alert

The federal government continues to scrutinize pneumonia coding for cases of overpayment or fraud. Included in the Office of Inspector General's (OIG) fiscal-year 2001 work plan is the ongoing investigation of pneumonia diagnosis related group (DRG) upcoding for hospital inpatients. However, if the proper laboratory tests are carried out, and the treating physician documents the link between the test results and the diagnosis in the medical record, hospitals should not worry about passing OIG scrutiny, says William Haik, MD, director of DRG review, a hospital coding consulting firm in Ft. Walton Beach, Fla.
Understand the Background
The pneumonia-upcoding project seeks to identify hospitals that incorrectly assign pneumonia diagnosis codes so cases are reimbursed under the higher rate of DRG 79 (respiratory infections and inflammations with complications) rather than DRG 89 (simple pneumonia and pleurisy with complications). The OIG and U.S. Department of Justice (DOJ) identify possible overpayment or fraud when a hospital reports a disproportionate number of pneumonia cases with ICD9 Codes assigned to DRG 79, which pays an average of $2,500 more than DRG 89. Upon OIG audit or DOJ investigation, hospitals have been cited for upcoding when the documentation in the medical record does not support the diagnosis used for the DRG assignment. Over 22 hospitals have settled their liability and paid more than $23.6 million, with many more under investigation.

Under particular scrutiny by the OIG are 482.83 (pneumonia due to other gram-negative bacteria), 482.89 (pneumonia due to other specified bacteria) and 507.0 (pneumonitis due to inhalation of food or vomitus), all of which assign to DRG 79. The first two codes are of particular interest to laboratories because those diagnoses are made largely because of cultures and other laboratory tests. Because these two codes do not specify the causative organism, coders have sometimes erroneously assigned pneumonia cases to these categories without adequate documentation. The assignment may be due to a lack of understanding of microbiology and ICD-9 coding principles or, in some cases, intentional upcoding. 
Properly Assign ICD-9 Code
"The key to avoiding or surviving OIG scrutiny for pneumonia coding is to ensure adequate documentation to justify the assignment of the ICD-9 code," Haik says. This would mean having the results of appropriate lab tests, such as some combination of smears and cultures from sputum, bronchial washings or brushings or bronchial alveolar lavage (BAL). "But no test is confirmatory without the physician stating the connection between the lab results and the diagnosis," Haik says. "For example, if a sputum culture indicates the presence of Staphylococcus aureus, the medical record must have the physician's statement to the effect of, 'pneumonia secondary to Staphylococcus aureus' (482.41)."

The coder cannot use the lab results alone to assign the diagnosis; it [...]