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March 27, 2018

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POA Indicator a Must Beginning October 1

September 11, 2007:
Effective October 1, 2007, all claims submitted to Medicare Part A contractors must contain a present-on-admission (POA) indicator for every diagnosis on acute care hospital claims. Critical access hospitals, Maryland waiver, long-term care, cancer, and psychiatric hospitals, as well as inpatient rehabilitation and children’s inpatient facilities are exempt from this requirement.

Section 5001(c) of the Deficit Reduction Act of 2005 requires hospitals to begin reporting the secondary diagnoses that are POA beginning for discharges on or after October 1, 2007. By October 1, 2007, the Centers for Medicare & Medicaid Services (CMS) will have selected at least two high-cost or high-volume (or both) diagnosis codes that:
  • Represent conditions (including certain hospital acquired infections) that could reasonably have been prevented through the application of evidence-based guidelines
  • When present on a claim along with other (secondary) diagnoses, have a DRG assignment with a higher payment weight.
Beginning for discharges on or after October 1, 2007, hospitals should start reporting the POA code for acute care inpatient PPS discharges. There is one exception, however: Claims submitted via direct data entry (DDE) should not report the POA codes until January 1, 2008, since DDE screens will not be able to accommodate the codes until that date.

Hospitals that fail to provide the POA code for discharges on or after January 1, 2008, will receive a remittance advice remark code informing them that they failed to report a valid POA code. However, beginning with discharges on or after April 1, 2008, Medicare will return claims to the hospital if the POA code is not reported, and the hospital will have to supply the correct POA code and resubmit the claim. To be able to group these diagnoses into the proper DRG, CMS needs to capture a POA indicator for all claims involving inpatient admissions to general acute care hospitals. CR 5499, the source for this article, announces this requirement and provides your fiscal intermediaries (FI) and A/B MACs with the coding and editing requirements, and software modifications needed to successfully implement this indicator.

After October 1, 2008, for claims for acute care inpatient PPS discharges with one of these selected conditions present at the time of discharge but not at the time of admission (as indicated by the POA), hospitals will not be allowed to select a DRG that results in higher reimbursement.

Deborah C. Hall
Clinical/Technical Editor


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