In 2025, hospital billers must be diligent in reporting the POA indicator on UB04 forms. Every diagnosis on an acute inpatient claim requires a POA flag to identify conditions that were present at admission versus those acquired during the stay. Accurate POA reporting ensures correct MS-DRG assignment and helps avoid payment errors and denials. This guide explores CMS’s latest guidelines, code definitions (Y/N/U/W), exempt diagnoses, form fields, and best practices for reporting POA indicators on UB-04 claims.
What Is the POA Indicator on UB04 and Why It Matters?
The POA indicator is a one-character code appended to each diagnosis code on an inpatient UB-04 claim. It tells payers whether a condition was present at the time of admission. This distinction is crucial for accurate payment and compliance. CMS requires POA flags for all diagnoses on acute-care claims. POA data affects MS-DRG grouping and helps identify hospital-acquired conditions (HACs).
When a secondary diagnosis on a HAC list is coded as “not present” (N) at admission, Medicare may deny additional payment. On the other hand, coding it as “yes” (Y) or “clinically undetermined” (W) often preserves eligibility for higher reimbursement. Correct POA coding ensures claims are paid appropriately and withstand audits.
POA reporting is federally mandated for Medicare acute care hospitals and widely adopted by commercial payers. UnitedHealthcare, for example, requires POA indicators for all applicable inpatient diagnoses on UB-04 forms. The 2025 ICD-10-CM Official Guidelines also emphasize POA reporting for each diagnosis and external cause code on institutional claims.
How to Report the POA Indicator on UB04 Forms
Each diagnosis field on the UB-04 claim form includes an 8-character space. The first seven characters are for the ICD-10-CM code, and the 8th character is for the POA indicator. This applies to:
- Principal diagnosis (FL67)
- Additional diagnoses (FL67A–FL67Q)
- External cause codes (FL72a–c)
CMS POA Code Definitions:
- Y – Yes, present at the time of inpatient admission
- N – No, not present at the time of inpatient admission
- U – Unknown, documentation is insufficient
- W – Clinically undetermined
- Blank – Diagnosis is exempt from POA reporting (leave field blank)
Coders should assign Y or N when documentation supports a definitive answer. Use U or W only when necessary. If the diagnosis is on the CMS POA Exempt List, the POA field must be left blank. Do not use the code “1” for exempt conditions under the 5010 electronic standard.
2025 POA Policy Updates
No major regulatory changes were issued for POA reporting in 2025. However, updated ICD-10-CM codes effective October 1, 2024, and payer-specific edits reinforce the importance of accurate POA coding. The April 2025 update did not change the CMS POA Exempt List, but facilities should review updates for FY2026 discharges.
To stay compliant in 2025:
- Use the latest ICD-10-CM and UB-04 coding guidelines
- Consult the POA Exempt List regularly
- Query providers when documentation is unclear
- Double-check POA indicators on claim resubmissions
Billing and Payment Impact
Incorrect POA coding can result in payment reductions or claim denials. For example, a HAC coded as “N” may eliminate a CC/MCC, reducing DRG payment. Some payers deny claims outright if POA indicators are missing or incorrect. For best results:
- Ensure all non-exempt diagnoses have a valid POA indicator
- Leave POA fields blank for exempt codes
- Review POA entries when adjusting claims
Explore our UB-04 claim form guide and condition code guide for additional help.
Common POA Coding Errors to Avoid
- Missing POA indicators – Required fields must not be left blank unless the diagnosis is exempt.
- Incorrect use of POA codes – Avoid using U or W unless justified by documentation.
- Using outdated codes – The “1” code is obsolete under 5010. Use blank fields for exempt conditions.
- Failure to query providers – Always clarify documentation when the POA status is uncertain.
FAQ
Is the POA indicator required for outpatient claims?
No. POA indicators are not required for outpatient claims. They apply only to inpatient claims submitted by general acute-care hospitals. Certain facility types (e.g., rehab or psych hospitals) may be exempt.
What should I do if a POA code was submitted incorrectly?
Submit a corrected claim with the accurate POA indicator. If the claim has already been paid, file an appeal with supporting documentation. Refer to our guide on denial code explanations for help.
Conclusion
The POA indicator on UB-04 claims remains a critical element of accurate inpatient billing in 2025. Understanding POA requirements, code definitions, and CMS updates will reduce denials and improve compliance. Assign POA indicators carefully, document queries when needed, and monitor payer policies regularly. For more tools and resources, visit our billing and coding section at cms1500claimbilling.com.