MedicaidReimbursementHigh impact
Newsletter Vol. 18, No. 07
New Jersey Medicaid·NJ·Provider Notice
Effective date
Jul 1, 2008
We identified it
Jun 20, 2026
Summary
New Jersey Medicaid (DMAHS) is changing DRG assignment and reimbursement for inpatient hospital claims with hospital-acquired conditions (HACs) coded as secondary diagnoses. Effective July 1, 2008, claims with HACs not present on admission (POA) will no longer receive higher-paying DRGs. All claims must now include a POA Indicator (Y, N, U, or W) on the UB-04 form or will be denied.
Action Required
By July 1, 2008: (1) Billing team must ensure all UB-04 claim submissions include a POA Indicator for every diagnosis code—claims without POA Indicators will be denied by DMAHS. (2) Coding staff must accurately document POA status: code 'Y' for conditions present at admission (eligible for CC/MCC DRG payment), 'N' or 'U' for conditions not present or undetermined (will not receive higher DRG payment), and 'W' for clinically undetermined conditions (eligible for CC/MCC DRG payment). (3) Clinical documentation must support POA determination—review medical records policies to ensure admission notes clearly establish baseline conditions. (4) Train coders and billers on the new POA Indicator requirements and the reimbursement impact. (5) Update billing system validation rules to reject claims missing POA Indicators before submission. (6) Review HAC list from DMAHS and ensure those specific diagnoses are properly flagged during coding. Failure to comply will result in claim denials.