Incorrect ADL coding is common and costly, expert says

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Mary Beth Newell, RN
Mary Beth Newell, RN

Improper coding related to activities of daily living is common, causing providers to lose significant Medicare reimbursements, a coding expert said during a McKnight's Super Tuesday webcast.

“The biggest coding error I find is undercoding,” said Mary-Beth Newell, RN, vice president of clinical reimbursement at Post Acute Consulting. “Undercoding is much more prevalent than overcoding.”

Nursing home staff often want to give residents as much credit as possible for doing daily living activities independently, but this can lead caregivers to shortchange themselves by not coding for assistance they provide, Newell noted. Therefore, it's crucial to educate staff about the four late-loss ADLs — bed mobility, transfers, eating and toileting — and how to determine the resident's level of independence and the nursing staff's level of assistance.

For instance, staff members sometimes do not know that “just” lifting a resident's leg may constitute weight-bearing assistance, which would be coded as extensive assistance, according to Newell. Another common error: staff members who assist residents on and off the commode during toileting frequently code this under “transfers.” However, this should actually be coded under the ADL for toilet use, Newell pointed out.

Properly coding this would raise a resident's ADL Index, and in a hypothetical example provided by Newell, this change resulted in an additional payment of $64 each day.

“Undercoding can cost you $90 or more per day in lost revenue in the same RUG category,” Newell said. She added that in areas where RUG levels are adjusted higher, such as San Francisco, that number can rise to $140 a day.

Compare residents' late-loss ADLs to help ensure proper coding, Newell advised. If transfers are coded as involving two-person assistance but toileting is coded as needing only one person, this inconsistency could indicate undercoding. Other best practices include doing detailed coding orientations for licensed nurses as well as assistants, doing daily ADL charting for each resident during every shift, designating coding mentors and doing regular in-service education.

The full webcast is available at