What is a principal diagnosis?

Principal diagnosis describes the underlying cause behind a patient’s initial hospital admission and is assigned only after a physician has completed necessary tests and examinations. This is distinct from an admitting diagnosis—which describes a patient’s condition at the time of hospital admission before formal tests have been administered.

Occasionally, complications and comorbidities may overtake the principal diagnosis in terms of treatment length and aggressiveness. In this case, the more resource-intensive condition is called the primary diagnosis.

Why is a principal diagnosis an important metric in healthcare?

Principal diagnosis serves an important function in determining which diagnosis-related group (DRG) code to assign a patient. DRGs and other diagnostic codes, like ICD-10, are not only used to electronically record a patient’s treatment history, but they also play a crucial role in healthcare billing.

Healthcare providers will use these codes to determine the complexity of patient treatment. This includes the symptoms they initially presented and the medications, treatments, procedures, and other hospital resources that they received. This information helps care providers know how to bill an insurer for a given episode of care.