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The definition of a principal procedure is part of the Uniform Hospital Discharge Data Set (UHDDS): the standard set of data elements used for inpatient billing and statistical information. It is also included in some of the core measures from the Centers for Medicare & Medicaid Services (CMS) and the Joint Commission. The principal procedure is the procedure performed for definitive treatment, rather than diagnostic or exploratory purposes, or which is necessary to take care of a complication.

While the definition was in place prior to ICD-10 implementation, it was not part of the official coding guidelines. Now, procedural guidance includes instructions for the selection of principal procedure and clarification on the importance of the relation to the principal diagnosis when more than one procedure is performed.

This article delves deeper than the coding guidelines, with emphasis on specific issues revealed by audits, the importance of sequencing, and examples of proper selection of the principal procedure code.

Sequencing ICD-10-PCS Procedures

We all know that proper sequencing of the principal diagnosis is one of the keys to accurate MS-DRG assignment, but how much effort do we put into sequencing procedures? Though the order of ICD-10-PCS procedures may not directly impact payment, procedural sequencing is important for statistical data and core measures reporting. Since ICD-10 implementation, one of the areas where we often see coding errors is in the assignment of the first-listed procedures. These misplaced procedures do not meet the “principal procedure” definition set forth by coding guidelines.

While coders are keenly focused on sequencing diagnoses, many have not considered the possibility of a procedural sequencing error. Most grouper software in encoders is designed to pull the procedure that impacts DRG assignment into the first position. In most cases, that logic would be correct. Consider the case of a patient with uterine cancer who undergoes a hysterectomy. The procedure code for a hysterectomy is automatically pushed to the first procedure position, and it’s also the code that drives DRG assignment.

However, there are unusual cases in which a procedure (one that does not meet the definition of principal procedure) is pulled to the top because it affects the DRG assignment. This happens when a procedure is designated as a surgical procedure but the principal procedure, according to the definition, is a nonsurgical procedure. While grouping errors may not be new with ICD-10 implementation, the addition of principal procedure definitions to the guidelines has brought the issue to the forefront. Here are three such topics that have captured our attention.

Arterial monitoring lines often pulled to the top when it is not the primary procedure. This is particularly prevalent in pediatric hospitals, where children with multiple issues may be admitted. Arterial monitoring has been listed as an OR procedure that may be sequenced before non-OR procedures that meet the principal procedure definition. The OR procedure grouping issue was fixed in grouper version 34.0 of MS-DRGs, but still impacts APR-DRGs in version 34.0. This can be a problem for hospitals with high Medicaid populations since many state-administered Medicaid programs base payment on the APR-DRGs.

Multiple OR procedures with incorrect sequencing. Groupers pull the OR procedures to the top of the procedure list, but if there’s more than one, they don’t resequence those codes. For example, say a patient with malnutrition is admitted for placement of a percutaneous endoscopic gastrostomy (PEG) tube and medical management for failure to thrive. Unfortunately, the laparoscopic procedure has to be converted to an open procedure. A subcutaneous continuous infusion catheter is also placed during surgery for postoperative pain management. In this case, the principal procedure is the feeding tube placement (0DH60UZ, Insertion of feeding device into stomach, open approach) since it is the most definitive procedure related to the principal diagnosis. Additional codes include the laparoscopic portion before it was converted to an open procedure (0WJG4ZZ, Inspection of peritoneal cavity, percutaneous endoscopic approach) and placement of the subcutaneous catheter (0JHT03Z, Insertion of infusion device into trunk subcutaneous tissue and fascia, open approach). Both the feeding tube placement and laparoscopy codes are OR procedures under MS-DRGs. All three procedures are OR procedures in the APR-DRG system. The grouper will make sure an OR procedure is the first position, but it may not match the principal procedure definition. It is the coder’s responsibility to ensure that the feeding tube code is sequenced first.

Excisional debridement not related to the principal diagnosis. While this is not new to PCS, it remains a sequencing issue that we often see. Here is a typical example:

A patient with a principal diagnosis of acute hypoxic respiratory failure is placed on a ventilator for more than 96 hours. A secondary diagnosis of stage 3 decubitus ulcer of the buttocks requires excisional debridement of skin. The debridement code drives the MS-DRG assignment since it is an OR procedure: MS-DRG 166, other respiratory system, or procedures with MCC. Many encoders will sequence the debridement code as the principal procedure. Correct procedural sequencing places the ventilator first, since it was a definitive procedure performed to treat the respiratory failure. The table below depicts correct versus incorrect sequencing.

Correct Sequencing

Incorrect Sequencing





J96.01, Acute respiratory failure with hypoxia

5A1955Z, Respiratory ventilation, 96+ hours

J96.01, Acute respiratory failure with hypoxia

0HB8XZZ*, Excision of buttock skin, external approach

L89.303, Pressure ulcer of unspecified buttock, stage 3

0HB8XZZ*, Excision of buttock skin, external approach

L89.303, Pressure ulcer of unspecified buttock, stage 3

5A1955Z, Respiratory ventilation, 96+ hours

*Procedure Drives MS-DRG Assignment

Why Proper Sequencing Matters

Accurate coding is required for proper billing, reimbursement, and compliance. As shown in the examples above, coders must make sure the DRG-impacting procedure is on the bill, though it doesn’t have to be listed first. The DRG-impacting code must be in the top six – I recommend spot No. 2 if it doesn’t meet the principal procedure definition.

Sequencing directly affects compliance and core measures that rely on the principal procedure field. Accuracy is becoming increasingly critical to value-based payment, improved patient outcomes, and maintaining high-quality care.

Here are three strategies to consider:

  • Check your code book to determine if the most recent ICD-10-PCS guidelines are included up front. Sometimes the book is published before the latest version of the guidelines is released. A best practice is to pull the current version from the CMS website.
  • As part of ongoing training and education, conduct audits based on industry requirements to confirm correct sequencing and improve coding performance. Also, identify areas for improvement based on specific knowledge and skills gaps.
  • Develop a procedure sequencing checklist as a quick reference for coders. Here’s a simple example:

               Order of procedure coding:

                          •  Procedure most related to principal diagnosis that is therapeutic in nature
                          •  Procedure most related to principal diagnosis that is diagnostic in nature
                          •  No procedure related to principal diagnosis, but therapeutic procedure performed for secondary diagnosis
                          •  Diagnostic procedures related to secondary diagnoses


Kristi Pollard, RHIT, CCS, CPC, CIRCC, AHIMA-Approved ICD-10-CM/PCS Trainer

An AHIMA-Approved ICD-10-CM/PCS Trainer, Kristi is Director of Coding Quality and Education for Haugen Consulting Group. With more than 25 years of industry experience, she’s responsible for the development and presentation of coding education, as well as assisting with facility inpatient and outpatient coding audits. Kristi possesses an extensive background in coding education and consulting and is a national speaker and published writer.

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