rcm glossary

Principal diagnosis

Principal diagnosis is the primary condition or disease identified by a healthcare provider as the main reason for a patient's encounter or hospitalization.

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What is Principal Diagnosis?

The term "principal diagnosis" is a crucial concept in healthcare revenue cycle management (RCM) and plays a significant role in medical coding, billing, and reimbursement processes. It refers to the primary condition or reason for a patient's encounter with a healthcare provider, which is determined after a thorough evaluation and assessment by the attending physician or healthcare professional.

In medical coding, the principal diagnosis is assigned a specific code from the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) coding system. This code represents the primary condition that necessitated the patient's visit to the healthcare facility. The principal diagnosis code is used for various purposes, including billing, reimbursement, statistical analysis, and research.

Difference between Principal Diagnosis and Other Similar Terms

While discussing the concept of principal diagnosis, it is essential to differentiate it from other related terms that are often used interchangeably but have distinct meanings. Let's explore the differences between principal diagnosis, admitting diagnosis, and primary diagnosis:

Admitting Diagnosis: The admitting diagnosis refers to the condition or reason for a patient's admission to a healthcare facility, such as a hospital. It is the diagnosis provided by the physician or healthcare professional at the time of admission. The admitting diagnosis may or may not be the same as the principal diagnosis. In some cases, the admitting diagnosis may change after further evaluation and assessment, leading to a different principal diagnosis.

Primary Diagnosis: The primary diagnosis is a term commonly used in the context of primary care or general medical practice. It refers to the main condition or illness that a patient presents with during a routine visit to a primary care physician. Unlike the principal diagnosis, which is determined for each encounter with a healthcare provider, the primary diagnosis is typically assigned for ongoing or chronic conditions managed by a primary care physician.

It is important to note that the principal diagnosis is specific to each encounter or visit to a healthcare provider, while the primary diagnosis is more general and may remain the same over multiple encounters.

Examples of Principal Diagnosis

To provide a better understanding of the concept, let's consider a few examples of principal diagnosis:

Example 1: A patient visits an emergency department with symptoms of severe chest pain. After a thorough evaluation, the attending physician determines that the patient is experiencing a myocardial infarction (heart attack). In this case, the principal diagnosis would be "Acute myocardial infarction" with the corresponding ICD-10-CM code assigned.

Example 2: A patient undergoes a surgical procedure to remove a malignant tumor from their colon. The principal diagnosis for this encounter would be "Malignant neoplasm of colon" with the appropriate ICD-10-CM code assigned.

Example 3: A patient visits a primary care physician complaining of persistent cough and shortness of breath. After conducting various tests and examinations, the physician diagnoses the patient with chronic obstructive pulmonary disease (COPD). In this scenario, the principal diagnosis would be "Chronic obstructive pulmonary disease" with the corresponding ICD-10-CM code assigned.

These examples illustrate how the principal diagnosis represents the primary condition or reason for a patient's encounter with a healthcare provider. It is essential to accurately identify and assign the principal diagnosis to ensure proper coding, billing, and reimbursement processes.

Importance of Accurate Principal Diagnosis

Accurate determination and assignment of the principal diagnosis are of utmost importance in healthcare revenue cycle management. Here are a few reasons why accurate principal diagnosis is crucial:

1. Billing and Reimbursement:

The principal diagnosis plays a significant role in determining the appropriate reimbursement for healthcare services provided. Insurance companies and government payers rely on the principal diagnosis code to process claims and reimburse healthcare providers. Accurate coding and documentation of the principal diagnosis ensure that providers receive appropriate reimbursement for the services rendered.

2. Medical Coding:

Medical coders rely on the principal diagnosis to assign the correct ICD-10-CM code, which is essential for accurate billing and reimbursement. The principal diagnosis code also affects the assignment of secondary diagnosis codes, procedure codes, and other relevant codes. Accurate coding ensures compliance with coding guidelines and regulations, reducing the risk of claim denials and audits.

3. Statistical Analysis and Research:

The principal diagnosis code is used for statistical analysis and research purposes. It helps in tracking and analyzing disease patterns, treatment outcomes, and healthcare utilization. Accurate and consistent reporting of principal diagnoses enables researchers and policymakers to identify trends, allocate resources, and make informed decisions regarding healthcare delivery and public health initiatives.

4. Quality Reporting:

The principal diagnosis is often used in quality reporting initiatives, such as those required for value-based reimbursement programs. Accurate reporting of principal diagnoses helps measure and assess the quality of care provided by healthcare organizations. It allows for benchmarking, performance comparisons, and identification of areas for improvement.


In healthcare revenue cycle management, the principal diagnosis is a critical element that determines the primary condition or reason for a patient's encounter with a healthcare provider. Accurate identification and assignment of the principal diagnosis are essential for proper medical coding, billing, and reimbursement processes. It impacts the accuracy of claims, statistical analysis, research, and quality reporting. Understanding the concept of principal diagnosis and its significance is crucial for healthcare professionals, medical coders, and individuals involved in healthcare RCM.

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