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Focus on Active Treatment in the Post-Acute Care Setting-Initial Encounter or Subsequent Encounter

August 12, 2021
Compliance By Armi Hernandez, Consultant

Medicare Prospective Payment System (PPS) changes in the Skilled Nursing Facilities (SNFs) and Home Health (HH) have increased the importance of diagnosis coding.


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ICD-10 Codes are three to seven characters in length:

  • The first character is alpha.
  • The second character is numeric.
  • Characters three through seven are alpha or numeric.
  • Decimal is used after the third character.
  • Digits four through six provide greater detail of etiology, anatomical site, and severity.
  • The seventh character code adds additional information to describe the encounter.
    • A = Initial Encounter
    • D =Subsequent Encounter
    • S = Sequela
  • Alpha characters are not case-sensitive.

Specific chapters of the ICD‑10‑CM Official Guidelines for Coding and Reporting require the use of the seventh character. This seventh character has a different meaning based on the section where it is used. It must always be in the seventh character position, and when a seventh character applies, codes that are missing this character are considered invalid.

The CMS ICD-10-CM Official Guidelines for Coding and Reporting for the Fiscal Year 2021 defines the use of the seventh character encounter codes:

  • A - initial encounter is used for each encounter where the patient is receiving active treatment for the condition.
  • D - subsequent encounter is used for encounters after the patient has completed active treatment of the condition and is receiving routine care for the condition during the healing or recovery phase.
  • S - sequela is for complications or conditions that arise as a direct result of a condition.

This discussion will focus on the use of the appropriate encounter code related to active treatment. To consider the use of the encounter code A - initial encounter, the keyword here is an active treatment. Active treatment is the treatment for the condition described by the ICD-10 code, even if it may be related to an earlier predisposing condition.

Here are examples of active treatment:

  • Services in the Emergency department for the start of care of a condition or complications.
  • Initial diagnosis of a condition or injury regardless of when it happened.
  • A second opinion consultation with another surgeon to validate the initial surgical course of treatment.
  • Re-injury prompting initiation of active treatment.
  • A change in the treatment plan to a new one.
  • Antibiotic treatment for post-operative infection.
  • A patient who delayed treatment for the fracture causing malunion or nonunion.
  • Wound vac treatment for wound dehiscence.
  • Any treatment for complications related to the condition described by the ICD-10 code.

The most commonly used encounter code in the post-acute care setting is D - subsequent encounter, which is the recovery phase; however, if the patient continues with active treatment for an injury or illness, it may be appropriate to use the encounter A - initial encounter.

For instance, a patient is discharged from the hospital and admitted to the SNF or HH for antibiotic treatment for an infected right prosthetic device. In the post-acute care setting, the thought process is to assign the encounter code D - subsequent encounter since the patient already received the initial care from the hospital, but the appropriate encounter code for this condition to report is T84.51XA, Infection and inflammatory reaction due to internal right hip prosthesis, initial encounter. Why? As stated in the CMS ICD‑10‑CM Official Guidelines for Coding and Reporting, Chapter 19, assign the initial encounter as long as the patient is still receiving active treatment, in this scenario the antibiotic, for the prosthetic infection regardless of when the device was placed.

Another scenario is a post-acute care patient has orders to continue wound vac treatment due to dehiscence of the abdominal surgical wound. Is this encounter considered an initial or subsequent in the SNF or HH setting? In this situation, wound vac is an active treatment irrespective of where the patient is treated; therefore, the initial encounter code is reported, T81.31XA, Disruption of external operation (surgical) wound, not elsewhere classified.

Accurate coding and reporting are essential. All characters of the reported ICD-10 code must be consistent with the medical record.

How Can LW Consulting, Inc. Help?

LW Consulting, Inc. offers a comprehensive range of services that can help your organization maintain compliance including conducting mock surveys, completing chart audits, providing education, and assisting with denial appeals.


For more information, contact Patty Klinefelter at (540) 686-1311 or email

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