Pulmonology Coding Alert

Question: Our understanding is that the first-listed diagnosis must be used in lieu of the principal diagnosis when reporting observation. Often, the first listed diagnosis on the discharge summary is not the reason for the admission to observation. Should the reason for admission always be the first listed? If a patient is admitted for shortness of breath but the provider documents that the patient was dehydrated and experiencing an acute asthma attack, should shortness of breath still be the first listed diagnosis?

Codify Subscriber

 Answer: You should report the diagnosis that’s chiefly responsible for the visit rather than the diagnosis listed first on the discharge summary. Because observation care is considered an outpatient service, you’ll follow the outpatient coding rules, which dictate that, in your example, you’d report the diagnosis for the asthma attack first, followed by dehydration. There is no need to list the diagnosis for shortness of breath, since that’s inherent to an asthma attack.

Here’s why: “For outpatient claims, providers report the full diagnosis code for the diagnosis shown to be chiefly responsible for the outpatient services,” CMS says in Section 10.3 of Chapter 23 of the Medicare Claims Processing Manual.

“For instance,” the Manual says, “if a patient is seen on an outpatient basis for an evaluation of a symptom (e.g., cough) for which a definitive diagnosis is not made, the symptom is reported. If, during the course of the outpatient evaluation and treatment, a definitive diagnosis is made (e.g., acute bronchitis), the definitive diagnosis is reported.”

Therefore, in this case, the shortness of breath is the symptom but the definitive diagnosis is the asthma, while dehydration is a tertiary diagnosis.