A POA indicator shows whether each diagnosis existed when the inpatient order was written. What Y, N, U and W mean, why exempt codes are blank, and how N lowers the MS-DRG.
A present on admission (POA) indicator is a one-character flag attached to each diagnosis on an inpatient claim, showing whether the condition existed when the inpatient admission order was written. Medicare uses it to stop paying the higher MS-DRG for certain hospital-acquired conditions. Values are Y, N, U and W; exempt codes are left blank.
POA indicator values
| Value | Meaning | Higher MS-DRG paid for a selected hospital-acquired condition? |
|---|---|---|
| Y | Present at the time of the inpatient admission order | Yes |
| N | Not present at the time of the inpatient admission order | No |
| U | Documentation is insufficient to determine whether the condition was present | No |
| W | Clinically undetermined: the provider can't determine whether it was present | Yes |
| Blank | Code is on the POA exempt list | Not applicable |
Values and payment treatment are from CMS's POA indicator fact sheet and Noridian's POA guidance. Older claims and some references show "1" for exempt codes. That value was used under the 4010A claim format; since the move to 5010, exempt codes are left blank instead.
What "present on admission" means
POA is defined by the time of the inpatient admission order, not the time the patient arrived. A condition that develops in the emergency department, in observation or during outpatient surgery before the order is present on admission. That's one reason the status decision matters; our guide to observation, inpatient and ED status covers how the order is placed.
Three rules from the ICD-10-CM Official Guidelines (Appendix I) cover most questions:
- Diagnosed later, present earlier. A condition diagnosed after admission is still Y if it was clearly present before the order, for example a cancer found on day three that obviously existed on arrival.
- Chronic conditions are Y even when first diagnosed during the stay.
- Combination codes are N if any part of the condition developed after admission, and Y only if every part was present.
When documentation doesn't say, the coder queries the provider. U is the result of an unanswered or unanswerable question, and it pays like N. For sepsis, POA status also decides the principal diagnosis; see our guide to sepsis coding guidelines.
Why the POA indicator affects payment
For discharges since October 1, 2007, Medicare's hospital-acquired condition (HAC) payment provision has applied to hospitals paid under the inpatient prospective payment system. If a diagnosis on the HAC list is reported with N or U, the claim groups as though that diagnosis weren't there, so it can't raise the MS-DRG to a "with CC" or "with MCC" level.
The HAC categories include retained foreign objects, air embolism, blood incompatibility, stage 3 and 4 pressure injuries, falls and trauma, catheter-associated urinary tract infections, central line-associated bloodstream infections, manifestations of poor glycemic control, and certain surgical site infections and post-procedure blood clots.
A wrong N therefore costs money twice: lost DRG payment, and a hospital-acquired condition the hospital didn't actually cause, recorded in its quality data.
Which hospitals report POA
CMS's affected hospitals list applies the requirement to IPPS hospitals. These are exempt from both POA reporting and the payment provision: critical access hospitals, long-term care hospitals, cancer hospitals, children's hospitals, inpatient psychiatric hospitals, inpatient rehabilitation facilities, religious non-medical health care institutions, and VA and Department of Defense hospitals. Maryland waiver hospitals are exempt from the payment provision but must still report POA.
Many Medicaid programs and commercial payers apply their own HAC non-payment rules using the same indicators, so report them accurately on every inpatient claim.
Related questions
Is the POA indicator the same as the HAC Reduction Program?
No. The POA payment provision adjusts individual claims. The separate Hospital-Acquired Condition Reduction Program reduces total Medicare payments for hospitals ranked in the worst-performing quartile on HAC measures.
Who assigns the POA indicator?
The coder assigns it from the provider's documentation. The provider determines whether the condition was present; the coder doesn't make that clinical judgment.
Do outpatient claims need POA indicators?
No. POA reporting applies to inpatient claims. Observation, emergency department and other outpatient claims don't carry POA indicators, though conditions that arose during those services count as present on admission if the patient is later admitted.
Should W be used often?
No. W is for cases where the provider has been asked and genuinely can't determine timing. A high W rate usually points to a query or documentation problem.
This page is general coding education, not a coding determination for any specific encounter.
