Diagnosis coding for malnutrition can positively affect hospital reimbursements. Our goal was to quantify the possible increase in reimbursements when the diagnosis of malnutrition was identified and appropriately coded. A sample of 234 cases representing 14% of Medicare patients seen from March 1991 through February 1992 at Allenmore Hospital in Tacoma, Wash, was retrospectively reviewed. Malnutrition diagnoses (using ICD-9-CM codes) were assessed according to established criteria. Ninety-four cases (39.7%) met the criteria for malnutrition. Seven demonstrated increased reimbursement, totaling $12,326 for the sample. Length of hospital stay was significantly longer in the malnourished group (P=.001). The results indicated a need for an improved system of documenting and coding malnutrition diagnoses for improved identification and reimbursement enhancement purposes. An example of criteria used for each malnutrition ICD-9-CM diagnosis code and a policy defining the criteria usage are shown. A nutrition assessment form, which includes each malnutrition ICD-9-CM code title for enhanced interdisciplinary communication leading to improved coding of malnutrition diagnoses, is also shown. We conclude that effective identification of malnutrition leading to enhanced reimbursement strengthens the leadership potential of hospital dietitians and improves hospital revenues. Additionally, we suggest that such a system initiates a process that may lead to improved, cost-effective treatment of persons identified as being malnourished and provide a foundation for surviving within the future health care reform environment. J Am Diet Assoc. 1995; 95:468–475.