Diagnosis Tier Matching Tutorial

Learn how to accurately match diagnoses to tier levels with step-by-step guidance and interactive practice

Understanding the Three-Tier System
IRF-PAI uses a three-tier system to adjust payment based on patient complexity

Tier 1 (Base Tier - Lowest Reimbursement)

Criteria: No comorbidities OR only low-impact comorbidities that don't significantly affect rehabilitation

Examples of low-impact conditions:

  • • Well-controlled hypertension (on 1-2 medications)
  • • Hyperlipidemia
  • • Osteoarthritis (not requiring active treatment)
  • • History of conditions not currently active

Tier 2 (Moderate Reimbursement)

Criteria: 1-2 moderate-impact comorbidities requiring active treatment during IRF stay

Examples of moderate-impact conditions (Tier 2 comorbidities):

  • • COPD with acute exacerbation (without respiratory failure)
  • • CKD Stage 4 (eGFR 15-29)
  • • Moderate malnutrition (albumin 2.5-3.0)
  • • Chronic compensated heart failure
  • • Diabetes with complications (neuropathy, retinopathy, nephropathy)
  • • Bacterial pneumonia (non-aspiration)
  • • Severe anemia (Hgb <8 g/dL)
  • • Pressure ulcer Stage 3

Tier 3 (Highest Reimbursement)

Criteria: 3+ moderate comorbidities OR 1+ high-impact comorbidity

Examples of high-impact conditions (Tier 1 comorbidities - confusing name!):

  • • Sepsis / Septicemia
  • • Acute respiratory failure
  • • Acute kidney injury / Acute renal failure
  • • Severe malnutrition (albumin <2.5, BMI <18.5)
  • • CKD Stage 5 / ESRD (on dialysis)
  • • Morbid obesity (BMI ≥40)
  • • Aspiration pneumonia
  • • Acute decompensated heart failure
  • • Complete hemiplegia (total paralysis)
  • • Pressure ulcer Stage 4

IMPORTANT: Confusing Terminology!

"Tier 1 comorbidity" means HIGH-IMPACT (like sepsis) and puts the patient in Tier 3 (highest payment). "Tier 1" as a payment tier means BASE tier (lowest payment, no/low comorbidities). Don't confuse the two!

Tier Assignment Decision Tree
Follow this flowchart to determine the correct tier
1

Does the patient have ANY high-impact (Tier 1) comorbidity?

Examples: Sepsis, acute respiratory failure, acute kidney injury, severe malnutrition

YES →

Assign Tier 3 (Highest Payment)

Even one high-impact comorbidity = Tier 3

NO ↓
2

How many moderate-impact (Tier 2) comorbidities does the patient have?

Examples: COPD exacerbation, CKD Stage 4, moderate malnutrition, diabetes with complications

3+ →

Assign Tier 3 (Highest Payment)

Multiple moderate comorbidities = Tier 3

1-2 →

Assign Tier 2 (Moderate Payment)

1-2 moderate comorbidities = Tier 2

0 →

Assign Tier 1 (Base Payment)

No/low-impact comorbidities only = Tier 1

Interactive Practice Scenarios
Test your tier matching skills with these real-world scenarios
1

Mrs. Johnson, 78-year-old female

Diagnosis: Sepsis with acute respiratory failure

Clinical Findings: WBC 18,000, Lactate 3.2, requiring BiPAP

What tier should this patient be assigned?

2

Mr. Davis, 65-year-old male

Diagnosis: Type 2 diabetes with neuropathy, hypertension, hyperlipidemia

Clinical Findings: HbA1c 8.2%, on insulin and metformin

What tier should this patient be assigned?

3

Ms. Rodriguez, 52-year-old female

Diagnosis: COPD with acute exacerbation, bacterial pneumonia, CKD Stage 4

Clinical Findings: eGFR 22, on antibiotics and steroids

What tier should this patient be assigned?

4

Mr. Thompson, 70-year-old male

Diagnosis: Well-controlled hypertension, osteoarthritis

Clinical Findings: BP 128/78 on one medication

What tier should this patient be assigned?

5

Mrs. Lee, 82-year-old female

Diagnosis: Acute decompensated CHF, moderate malnutrition, anemia (Hgb 7.2)

Clinical Findings: BNP 1,200, albumin 2.7, received transfusion

What tier should this patient be assigned?

Key Takeaways for Clinical Staff
  • Document everything: All comorbidities must be physician-documented, actively treated, and have clinical impact
  • One high-impact = Tier 3: Even a single Tier 1 comorbidity (sepsis, acute respiratory failure, etc.) makes the patient Tier 3
  • Count moderate comorbidities: 3+ moderate (Tier 2) comorbidities = Tier 3
  • Specificity matters: "CHF" vs. "acute decompensated CHF" changes tier assignment
  • Query when unclear: If documentation is vague, submit a physician query to clarify