The Answer to Understanding the Importance of Coding Accuracy  

LW Consulting, Inc. (LWCI) strives to help clients with a variety of questions, queries, and concerns. The following blog explains the importance of coding accuracy with a malnutrition diagnosis specifically in the hospital as well as in the Skilled Nursing Facility (SNF).

From the Agency for Healthcare Research and Quality,

“Malnutrition among hospitalized patients remains a serious issue affecting more than 30 percent of hospitalized patients in the United States. According to the American Society for Parenteral and Enteral Nutrition (ASPEN), malnutrition results from a “combination of varying degrees of overnutrition or undernutrition with or without inflammatory activity that leads to a change in body composition and diminished function. The etiology of malnutrition is heterogeneous, and can result from chronic starvation (e.g., anorexia nervosa); acute or chronic illness (e.g., certain cancers, sarcopenic obesity, major infections); and injury (e.g., burns, head trauma). These conditions are often associated with inadequate intake of protein and other nutrients that can lead to nutritional imbalances, severe weight loss, muscle wasting and loss of subcutaneous fat. Factors such as advanced age, immobilization, and low income can increase the risk of malnutrition. Malnutrition is associated with high mortality and morbidity, functional decline, prolonged hospital stays, and increased health care costs.”

In 2020, the Office of the Inspector General (OIG) conducted an audit regarding a sampling of hospital inpatient claims coding severe malnutrition. Referencing the OIG’s 2020 report, the objective of the audit was to determine whether hospitals complied with Medicare billing requirements regarding a claim recording a diagnosis of severe malnutrition. The premise of the audit was to address two severe malnutrition codes; nutritional marasmus (diagnosis code E41) and unspecified severe protein calorie malnutrition (diagnosis code E43). Previous OIG audits found that hospitals billed these severe malnutrition diagnosis codes when the documentation supported mild or moderate malnutrition codes. The severe malnutrition diagnosis codes, E41 and E43 are each classified as a type of major complication or comorbidity (MCC). MCCs such as these, added to a Medicare hospital claim, can result in a higher Medicare payment. There is specific documentation that must be included in the medical record to support coding of the MCC diagnosis codes for billing in the acute care hospital.

What was the Result of the Audit?

Out of 200 claims reviewed for the billing of a severe malnutrition diagnosis, 27 claims were correctly billed; and 173 were not appropriately billed based on the documentation. Nine of the claim’s documentation supported malnutrition as a secondary diagnosis code rather than a severe malnutrition diagnosis code, but the error did not change the payment. Out of the 164 claims remaining, the coding was not supported. Hospitals recorded severe malnutrition diagnosis codes on the claims, but the documentation identified other forms of malnutrition, or a malnutrition diagnosis was not at all supported. Net overpayments of $914,128 were identified which estimated hospitals received overpayments of $1 billion for the fiscal years 2016 and 2017.

Is Miscoding of Malnutrition Still an Issue?

Miscoding of malnutrition is still an issue. In reference to the OIG report, the Centers for Medicare and Medicaid Services (CMS) is reminding hospital billing personnel to ensure severe malnutrition diagnoses and codes are supported in the medical record.  

According to the Agency for Healthcare Research and Quality, “early identification and treatment of malnutrition are critical to prevent poor outcomes in hospitalized adult patients.” After discharge, malnourished individuals are at an increased risk of re-admissions to the hospital, but the documentation must support the coding.

What are the Requirements of Documentation for Acute Care Billing of Malnutrition?

  • Meets medically necessary standards
  • Consistent documentation to support a physician documented diagnosis of severe malnutrition, which may include some of the following:
    • Level of severity
    • Complexity of the patient
    • Contributing co-morbidities-acute vs. chronic, evidence of trauma, metastatic disease, unhealing wound, prolonged intubation etc.
    • Etiology of the diagnosis
    • Supportive clinical assessments
    • Diagnostic testing and laboratory findings
    • Nutritional support interventions and recommendations
    • Other therapeutic procedures
    • Interdisciplinary Team (IDT) notes
      • Registered Dietitian -nutritional screening tools and assessment/plan
      • Wound care specialist if applicable
      • Social worker notes-inaccessibility issues to nutrition/food
    • Other clinical findings and assessments-evidence of unintended weight loss, muscle wasting, reduced grip strength, inadequate nutritional intake, irregular absorption, loss of body fat, edema etc.

For these hospital claims mentioned in the report, the overall finding concluded, hospitals did not provide supportive documentation of a severe malnutrition diagnosis or its effect on patient care.

What about a Malnutrition Diagnosis in a Skilled Nursing Facility (SNF)?

Why is Accuracy in Coding so Important?

Similarly, to coding malnutrition on an inpatient hospital claim, medical necessity standards must be met when recording malnutrition on a SNF claim. The documentation must support the malnutrition diagnosis is physician documented (within a 60-day lookback period) and the diagnosis must be active (within a seven-day lookback period). Under the Patient Driven Payment Model (PDPM) and referencing the Resident Assessment Instrument (RAI) Manual, the guidance instructs to check Item I5600 of the Minimum Data Set (MDS) if there is documentation of malnutrition (protein or calorie), or the resident may just be “at risk for malnutrition”. There is no specific ICD-10 code for “at risk for malnutrition;” however, there are certain screening tools and physician documentation is required to support the risk.  Unlike the hospital, coding of malnutrition in a SNF does not have to be a severe malnutrition diagnosis to count toward payment.

  • When coding malnutrition, documentation must support:
    • The physician must document the condition.
    • IDT documentation must support an active diagnosis. Active diagnoses are supported by intervention, assessment, modification of treatment or inclusion in plans of care.

Examples of supportive documentation may include:

  • Insufficient energy intake, weight loss, loss of muscle mass, loss of subcutaneous fat, localized or generalized fluid accumulation that may mask as weight loss, and diminished functional status as measured by hand grip strength.
  • Evidence of the need for nutrition supplementation.
  • Other co-morbidities impacting the resident such as an unhealing wound, lab work identifying protein deficiencies etc.

Reimbursement for Medicare Part A for SNF benefits is calculated under the Patient Driven Payment Model.  A five-digit HIPPS code supports payment. The fourth digit comes from the NTA which stands for Non-Therapy Ancillary. The NTA is based on the presence of specific comorbidities or the use of certain extensive services. CMS considered various options to incorporate comorbidities into payment. The total number of comorbidities is linked to NTA costs; a malnutrition diagnosis is one of them. Malnutrition when supported in the documentation, contributes one point to a facility’s NTA score.

As an auditing team, LWCI is still identifying errors across the continuum of care in supporting the diagnosis of malnutrition which can affect payment.

What are Some of the Root Causes of Error when Billing for Malnutrition in a SNF?

Documentation does not include the following or a combination of the following:

  • The resident’s medical assessment lacks identification of areas that are relevant to the diagnosis.
  • Physician does not document the diagnosis within the 60-day lookback period.
  • There is no support the diagnosis is active, within a seven-day lookback period.
  • A dietician completes the Mini-Nutritional Assessment (MNA) screen, but there are no recommendations or needed interventions to support the at-risk score and the physician never records malnutrition as a problem.

There are important foundational concepts regarding the interdisciplinary documentation. The documentation needs to support MDS coding and Medicare regulations. Individual staff may be unaware of the components of skilled documentation requirements and regulations. It is imperative the interdisciplinary team understands the importance of supporting the coding of the MDS and the claim. If the documentation does not support skilled services and the coding of the MDS items which provides the payment HIPPS code; the facility could be at risk of denied payments.

What Can You Do Now?

  • Analyze claims recording severe malnutrition codes or any other specific codes.
  • Monitor and establish an internal auditing process/system to review malnutrition claims prior to submission.
  • Consider using an external auditing team like LWCI to provide an unbiased review of malnutrition documentation or other ICD-10 codes to ensure accuracy of claims and develop an action plan.

In all continuums of care, for all coding, billing and documentation needs, LWCI is here to assist you.

LW Consulting, Inc. (LWCI) offers a comprehensive range of services that can assist your organization in maintaining compliance, identifying trends, providing education and training,  or conducting documentation and coding audits. For more information, contact LWCI to connect with one of our experts!


Agency for Healthcare Research and Quality. Malnutrition in Hospitalized Audits. October, 2020. Reviewed November 9th, 2023.
CGS: A Celerian Group Company. Importance of Using Severe Malnutrition Codes Correctly. June 2023. Reviewed November 9th, 2023.
Department of Health and Human Services Office of Inspector General. (OIG). Hospitals Overbilled $1 billon by Incorrectly Assigning Severe Malnutrition Diagnosis Codes to Inpatient Claims. July, 2020. Reviewed November 9th, 2023.
Noridian Healthcare Solutions. CMS Reminds Hospitals to Use Severe Malnutrition Codes Correctly. October, 2023. Reviewed November 9th, 2023.