Updated on: March 16, 2016

POA Reporting Impacts Reimbursement: Strength Documentation with 2013 IPPS Start

Original story posted on: October 22, 2012

Fiscal year 2013 began on October 1 for the inpatient prospective payment system (IPPS) along with its expanded versions of Medicare quality initiatives, including the Hospital Acquired Condition (HAC) Program. As you know, present on admission (POA) reporting figures into the determination of whether a condition is hospital-acquired or not.


Medicare no longer assigns an inpatient hospital discharge to a higher paying MS-DRG if a selected condition is not POA. If a selected condition that was not POA manifests during the hospital stay, it is considered a HAC, and the case is paid as though the secondary diagnosis was not present. But if a condition is POA, then the Centers for Medicare & Medicaid Services (CMS) allow assignment to the higher MS-DRG. Consequently, it is important for providers to carefully document all POA conditions in order to receive accurate reimbursement.

Documentation Requirements


An understanding of the following general guidelines from CMS will facilitate proper documentation and payment. These guidelines and more are available in CMS’s fact sheet, “Present on Admission (POA) Indicator Reporting by Acute Inpatient Prospective Payment System (IPPS) Hospitals,” which is available under the Outreach and Education tab at http://www.cms.gov.

  • CMS requires the POA indicator for all Medicare claims for inpatient admissions to general IPPS acute care hospitals.
  • Regulations define POA as present at the time the order for inpatient admission occurs. Conditions that develop during an outpatient encounter, including emergency department, observation, or outpatient surgery, are considered POA.
  • Providers assign the POA indicator to principal and secondary diagnoses (as defined in Section II of the ICD-9-CM Official Guidelines for Coding and Reporting). For these guidelines, go to http://www.cdc.gov/nchs/icd/icd9cm.htm.
  • If a condition would not be coded and reported based on Uniform Hospital Discharge Data Set definitions and current official guidelines, then the POA indicator would not be reported.
  • A POA indicator is not required for the external cause-of-injury code unless it is being reported as an “other diagnosis.”

To achieve accurate POA assignment, reimbursement managers will need to resolve any issues related to inconsistent, missing, conflicting, or unclear documentation before submitting a claim. Of course, this involves a dual effort on the part of coders and healthcare providers.

CMS advises coders to use the UB-04 Data Specifications Manual and the ICD-9-CM Official Guidelines for Coding and Reporting to facilitate the assignment of the POA indicator for each “principal” diagnosis and “other” ICD-9-CM diagnosis codes reported on the UB-04 and ASC X12N 837 Institutional (837I) forms. Using the 837I electronic claim format, hospitals submit the POA indicator in segment K3 in the 2300 loop, data element K301.

It is essential that providers—that is, physicians or any qualified healthcare practitioner who is legally accountable for establishing the patient’s diagnosis—provide complete documentation

to support the determination of whether a condition was present on admission.

Since Jan. 1, 2011, the number “1” is no longer valid on claims submitted under the version 5010 format. The POA field should be left blank for codes exempt from POA reporting.

As an example, POA reporting for a claim with one primary POA but a secondary diagnosis that was not POA would appear as follows: POAYNZ. The letter “Z” is used to indicate the end of

the data element.

Note that any resequencing of ICD-9-CM diagnosis codes prior to their transmission to CMS also requires a resequencing of the POA indicators.

Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Janis Oppelt

Janis keeps the wheel of words rolling for Panacea®'s publishing division. Her roles include researching, writing, and editing newsletters, special reports, and articles for RACMonitor.com and ICD10Monitor.com; coordinating the compliance question of the week; and contributing to the annual book-update process. She has 20 years of experience in topics related to Medicare regulations and compliance.