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The Physician and “I”: Part 1 on Diagnoses and MDS Coding Relationships

Written by Michelle Olear, RHIT, BSN 
Director of Documentation Analysis and Professional Coding Services 
Minimum Data Set Consultants, LLC 

The physician’s role in the skilled nursing facility (SNF) is essential to delivering skilled, quality care for skilled and long-term care residents. Physicians are the facility’s lead in providing clinical decision-making and properly defining, clarifying, and verifying diagnoses. Physician documentation is the foundation from which nurse assessment coordinators (NACs) extract resident diagnoses and nurses build their plan of care in the nursing home. This blog will clarify who can provide a resident’s diagnosis, how the diagnosis is determined, the requirements for physician documentation, as well as the MDS coding requirements for section I (Active Diagnoses), and the steps NACs can take to ensure accurate coding. 

Who can provide a diagnosis? 

The existence of a diagnosis starts with clinical decisions made by clinicians. In the SNF/NF setting, these clinicians are known as our physicians and physician extenders (physician assistant (PA), nurse practitioner (NP), etc.). 

CMS defines physicians treating residents in a nursing facility as providers. Specifically, a provider is a physician or qualified healthcare practitioner who is legally accountable for establishing patient diagnoses. (HHS, 2022) 

Diagnoses can only come from the documentation of the physician/physician extender providing the care. This is why, for example, NACs should not use X-rays signed off by a physician specializing in radiology (radiologist) when coding the MDS, as this physician would not be legally accountable for the resident. On the other hand, independent physicians, consulting physicians, NPs, PAs, and medical residents who are licensed and rendering direct care (thereby meeting the definition of a “qualified health care practitioner who is legally accountable for establishing the patient’s diagnosis”) can assign ICD-10 codes based on documentation. 

While there are other qualified healthcare practitioners who may document a condition for a resident, such as a dietitian for BMI and risk for malnutrition, the associated diagnosis of obesity or malnutrition must be documented by the provider. 

How providers determine a diagnosis 

Providers undertake four steps before they formulate a diagnosis: 

  1. Review resident history 
  2. Conduct a physical/mental examination 
  3. Complete diagnostic testing 
  4. Summarize the data to determine the diagnosis 

It is the fourth step that the SNF/NF needs and relies upon for complete and accurate MDS coding. 

Physician documentation requirements 

For documentation to be compliant, physicians must adhere to rules and guidelines established by CMS and other regulatory groups.Physician documentation must be legible and possess patient identification, visit dates, signatures, and credentials. All conditions and diseases must be documented to substantiate the diagnosis. Missing any one of these pieces will place the documentation out of compliance and make the diagnosis unusable (and subsequently, unsuitable for coding in section I of the MDS). (CMS, 2023-c)  

A common acronym used in the medical physician community is MEAT, which describes the basic information needed in physician/provider documentation to make a diagnosis legitimate for the SNF/NF to use on the MDS and UB04 form: 

M = Monitoring 

E = Evaluation 

A = Assessment 

T = Treatment for documentation practices 

MDS coding requirements for section I (Active Diagnoses) 

Only the verified diagnosis is to be used on the MDS, but NACs should not confuse this verified diagnosis with the RAI’s definition of active diagnosis. Once a diagnosis is verified, NACs must then determine if the verified diagnosis is active within the 7-day look-back of the assessment reference date (ARD) window (exception: UTI is a 30-day look-back). The diagnosis must first be present before determining if it falls under the scrutiny and definition of an active diagnosis as defined in the RAI User’s Manual

The RAI definition states that the diagnosis must be documented in the last 60 days and have a direct relationship to the resident’s current functional, cognitive, mood, or behavior status, medical treatments, nursing monitoring, or risk of death during the 7-day look-back of the assessment. Page I-7 of the RAI User’s Manual states, “Medical record sources for physician diagnoses include progress notes, the most recent history and physical, transfer documents, discharge summaries, diagnosis/problem list, and other resources as available. If a diagnosis/problem list is used, only diagnoses confirmed by the physician should be entered.” (CMS, 2023-b) 

Therefore, the NAC must verify that there is in fact physician documentation of an “active diagnosis” in the last 60 days.  

A joint effort between the healthcare provider and the coder is essential to achieve complete and accurate documentation, code assignment, and reporting of diagnoses and procedures. These guidelines have been developed to assist both the healthcare provider and the coder in identifying those diagnoses that are to be reported. The importance of consistent, complete documentation in the medical record cannot be overemphasized. Without such documentation, accurate coding cannot be achieved. The entire record should be reviewed to determine the specific reason for the encounter and the conditions treated.” (CMS, 2023-a)  

Steps NACs can take to ensure accurate MDS coding

Therefore, to ensure accuracy, the NAC should review a resident for active diagnosis by checking that the diagnosis is included in the provider’s documentation to support the existence of the diagnosis and confirm it is relevant to the resident’s condition in the 7-day look-back. When NACs look at orders, he or she should verify they are signed off by the physician with a diagnosis next to them. 

About MDS Consultants

MDS Consultants provides a nurturing educational environment with an intense focus on MDS integrity, regulatory compliance, and reimbursement methodologies. Our per-diem, no long-term contracts have received positive feedback and have been highly looked upon as a solution that has assisted the skilled nursing community in optimizing their quality of care. We are a trusted supporter and can provide the following services:

  • MDS Completion
  • MDS System Management
  • MDS Data Integrity Audits
  • Medicare Documentation Audits
  • Care Plan Audits
  • ICD Coding Reviews    
  • Case-Mix Management Strategies

Centers for Medicare & Medicaid Services (CMS). (April 1, 2023-a). ICD-10-CM Official Guidelines for Coding and Reporting. https://www.cms.gov/files/document/fy-2023-icd-10-cm-coding-guidelines-updated-01/11/2023.pdf

Centers for Medicare & Medicaid Services (CMS). (October 2023-b). Long-Term Care Facility Resident Assessment Instrument 3.0 User’s Manual, version 1.18.11. https://www.cms.gov/files/document/finalmds-30-rai-manual-v11811october2023.pdf  

Centers for Medicare & Medicaid Services (CMS). (May 25, 2023-c). Medicare Program Integrity Manual. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c03.pdf   

Health and Human Services (HHS). (January 2022). MLN Evaluation and Management Services Guide. Medicare Learning Network (MLN), MLN006764. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/07.06.2022_MLN906764_E_M_Services_Hybrid_508.pdf