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Improve Your ICD-10 Coding by Understanding Its True Purpose

Improve Your ICD-10 Coding by Understanding Its True Purpose

Know what the ICD-10-CM and ICD-10-PCS guidelines mean and how to enforce them in your practice or facility.

Coding guidelines are a medical coder’s rule book. It is important to learn and know the official guidelines to be sure you’re coding and sequencing diagnoses appropriately. Only when everyone is following the same rules in the same way can we ensure the usefulness of the data we are reporting. 

Being diligent to follow the rules and guidelines is also helpful when appealing denials. When you can support the codes applied with the documentation, coding guidelines, and medical necessity, you have a better chance of winning the appeal.

Some Background on Medical Coding

Coding was originally designed for tracking diagnoses and procedures associated with hospital utilization and causes of death in 1893. It was not about reimbursement. It was all about data. Coding wasn’t really linked to reimbursement systems until late 1983.

The code sets are still technically not meant for reimbursement purposes. That is why ICD-10 had to be modified to be used in the United States for reporting diagnoses and procedures on healthcare transactions and why it took so long to implement ICD-10-CM and ICD-10-PCS.

Although ICD-10 was developed by the World Health Organization (WHO), ICD-10-CM codes are created by the National Center for Health Statistics (NCHS) for medical diagnoses, under authorization by the WHO. The Centers for Medicare and Medicaid Services (CMS) developed the Procedure Coding System (ICD-10-PCS) for inpatient procedures. NCHS maintains both ICD-10-CM and ICD-10-PCS codes. CPT® codes are created and maintained by the America Medical Association’s (AMA) CPT Editorial Panel with the help of physicians and other allied health experts, and HCPCS Level II codes are created and maintained by CMS.

There are specific guidelines for each code set that you should read/review every year for changes and updates.

Note: The ICD-10-CM and ICD-10-PCS Official Coding Guidelines for Coding and Reporting always take precedence over any other coding advice, including the American Hospital Association’s Coding Clinic.

COVID-19 Tests Our Data Reporting Skills

The medical codes and coding guidelines created at the spur of the moment this year for COVID-19 proved the importance for all coders to code the same way — not only nationally, but worldwide. New codes and guidelines were needed to ensure this vital data could be used to statistically track those who tested positive for the virus and studied universally.

Breakdown the ICD-10-CM Guidelines

Below are just some of the ICD-10-CM guidelines I use and reference on a regular basis:

Guideline Section IA:13 – Etiology/Manifestation Convention – Code first and Use additional code notes are sequencing rules in the classification of certain codes that are not part of an etiology/manifestation combination. These instructional notes indicate the proper sequencing order of the codes (etiology followed by manifestation).

Guideline Section IB:8 – Acute and Chronic Conditions – If the same condition is described as both acute (subacute) and chronic, and separate subentries exist in the Alphabetic Index at the same indentation level, code both and sequence the acute (subacute code) first. There are combined codes for acute and chronic conditions. See guideline Section IB:9 regarding combined codes.

Guideline Section IB:9 – Combination Code – A combination code is a single code used to classify two diagnoses, a diagnosis with an associated secondary process (manifestation), or a diagnosis with an associated complication. Multiple codes should not be used when the classification provides a combination code that clearly identifies all the elements documented in the diagnosis.

Guideline Section IB:14 – Documentation by Clinicians Other Than the Patient’s Provider – Code assignment is based on the documentation by the patient’s provider (i.e., physician or other qualified healthcare practitioners legally accountable for establishing the patient’s diagnosis, such as a nurse practitioner, for example).

There are a few exceptions when code assignment may be based on medical record documentation from the clinicians who are not the patient’s provider, such as codes for body mass index (BMI), depth of non-pressure chronic ulcers, pressure ulcer stage, coma scale, and National Institute of Health Stroke Scale (NIHSS). However, the associated diagnosis — such as overweight, obesity, acute stroke, or pressure ulcer — must be documented by the patient’s provider.

If there is conflicting medical record documentation, either from the same clinician or different providers, including other physicians and nurses, query the patient’s attending provider for clarification. Report BMI, coma scale, NIHSS codes, and codes in categories Z55–Z65 only as secondary diagnoses. You cannot code the BMI if the provider didn’t also note the associated diagnosis of overweight, obesity, or malnutrition; likewise, you cannot code a stage II pressure ulcer if the provider didn’t document the presence of the pressure ulcer.

Guideline Section II:C – Two or more diagnoses that equally meet the definition for principal diagnosis – The principal diagnosis is defined by the Uniform Hospital Discharge Data Set (UHDDS) as “the condition established ‘after study’ to be chiefly responsible for occasioning the admission of the patient to the hospital for care.” In 1974, The UHDDS was mandated to obtain uniform comparable discharge data on all inpatient admissions. It is the core data set for inpatient admissions. The data is collected on inpatient hospital discharges for Medicare and Medicaid programs and includes patient identification, provider information, clinical information on the patient’s episode of care, and financial information. The goal of the UHDDS is to obtain uniform, comparable discharge data on all inpatients to improve the consistency of comparable data across all inpatient settings.

I have been working in reviewing and appealing Diagnosis-Related Group (DRG) denials, and I can tell you from that experience that insurance companies like to reference this guideline. Then they emphasize whether they feel the two diagnoses are “equal” in the circumstances of the admission. This is another good reason to know your guidelines and remember there may be more than one part to a guideline, which you must follow to determine the most appropriate diagnosis. Not only do they both have to be present on admission (POA), worked up, etc., but the overwhelming reason that caused that admission must be noted.

POA reporting guidelines are used as a supplement to the Official Guidelines to facilitate the assignment of the POA indicator for each diagnosis code and external cause of injury code reported for inpatient claims. These POA guidelines are not intended to provide guidance on when a condition should be coded, but rather how to apply the POA indicator to the final set of diagnosis codes that have been assigned in accordance with Sections I, II, and III of the Official Guidelines.

The POA indicator is assigned to principal and secondary diagnoses and the external cause of injury codes. Reporting options and definitions of the indicators for the diagnoses are:

Y – Yes (present at the time of the inpatient admission).

N – No (not present at the time of the inpatient admission).

U – Unknown (documentation is insufficient to determine if condition is present on admission).

W – Clinically undetermined (provider is unable to clinically determine whether condition was present on admission).

E – Exempt from POA reporting. As noted above, this is not saying the condition should not be coded, but rather the diagnosis does not require a POA indicator.

If, at the time of code assignment, the documentation is unclear as to whether a condition was present on admission, it is appropriate to query the provider for clarification.

There is a list of conditions/diagnoses that are exempt from POA reporting. The list is updated annually and can be found on CMS’s website here.

For more instruction on PCS coding, read “Learn and Apply the 2020 ICD-10-PCS Code Updates.”

Decipher the ICD-10-PCS Guidelines

In comparison to the 121-page ICD-10-CM guidelines, the ICD-10-PCS guidelines are very short at only 17 pages.

ICD-10-PCS codes are composed of seven characters. Each character is an axis of classification that specifies information about the procedure performed. You should always consult the PCS tables to find the most appropriate and valid code. It is not required to consult the index first before proceeding to the tables to complete the code; a valid code may be chosen directly from the tables.

Guideline A8 – All seven characters must be specified to be a valid code. If the documentation is incomplete for coding purposes, query the physician.

Guideline A9 – Within a PCS table, as shown below, valid codes include all combinations of choices in characters 4-7 contained in the same row of the table. For example, 0JHT3VZ is a valid code, while 0JHW3VZ is not a valid code.

Guideline A11 – Many of the terms used to construct PCS codes are defined within the system. It is the coder’s responsibility to determine whether the documentation in the medical record equates to the PCS definitions. The physician is not expected to use the terms used in PCS code descriptions, nor is the coder required to query the physician when the correlation between the documentation and the defined PCS term is clear. For example: When the physician documents “partial resection,” the coder can independently correlate “partial resection” to the root operation Excision without querying the physician for clarification.

Guideline B3.2 – Multiple Procedures – During the same operative episode, multiple procedures are coded if:

  • The same root operation is performed on different body parts as defined by the distinct values of the body part character. Example: Excision of a lesion in the ascending colon and excision of a lesion in the transverse colon are coded separately.
  • The same root operation is repeated in multiple body parts, and those body parts are separate and distinct body parts classified to a single ICD-10-PCS body part value. Example: Excision of the sartorius muscle and excision of the gracilis muscle are both included in the upper leg muscle body part value, and multiple procedures are coded.
  • Multiple root operations with distinct objectives are performed on the same body part. Example: Destruction of sigmoid lesion and bypass of sigmoid colon are coded separately.
  • The intended root operation is attempted using one approach but is converted to a different approach. Example: Laparoscopic cholecystectomy converted to an open cholecystectomy is coded as percutaneous endoscopic Inspection and open Resection.

Guideline B3.4b – Biopsy followed by more definitive treatment – If a diagnostic Excision, Extraction, or Drainage procedure (biopsy) is followed by a more definitive procedure, such as Destruction, Excision, or Resection at the same procedure site, both the biopsy and the more definitive treatment are coded. Example: Biopsy of breast followed by partial mastectomy at the same procedure site, both the biopsy and the partial mastectomy procedure are coded.

This is not an all-inclusive list of either code set’s guidelines. The complete guidelines for both ICD-10 code sets can be found on CMS’ website noted in the Resources section. As you can see by the few listed here, it is important to review and learn these guidelines and keep them handy for reference to help ensure compliant, complete, and appropriate code selection. This not only helps ensure claims are coded and billed appropriately, but also helps ensure accurate data reporting.


ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and Reporting:



World Health Organization “International Classification of Diseases (ICD) Information Sheet

Medical coding books

Kimberly Farley

Medical coding books

About Has 9 Posts

Kimberly Farley, CIC, COC, CPC, CHONC, is a coding compliance auditor in Lowell, Ohio. She has been in healthcare for 25 years, initially in a surgical practice before transferring to facility coding and then auditing. Farley served as education officer for the Parkersburg, W. Va., local chapter in 2019 and 2020 and member development officer in 2011 and 2012. She has also presented at chapter meetings.

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