Understanding ICD-10

ICD-10-CM, which stands for International Classification of Diseases, 10th Revision, contains two code sets. They are ICD-10-CM, Clinical Modification; and ICD-10-PCS, Procedure Coding System. The PCS codes are not required for outpatient settings.

All ICD-10 information that APTA provides is related to ICD-10-CM codes.

Using ICD-10

Do I have to purchase a new ICD-10 book every year?

Providers must use the ICD-10 codes for inpatient discharges and outpatient encounters during the current financial year, which runs Oct. 1 through Sept. 30. Unless there is a hold on updating ICD-10 codes, it is best practice to purchase a current ICD-10 book each year. Most online booksellers carry a printed version of the current ICD-10-CM codes. When ordering, ensure that you are ordering a code book that is not in draft form.

You can purchase hard copy books, and you can also access the index and tabular lists online for both years at no charge. [See "Where do I find a list of ICD-10 codes?"]

The updated book typically includes new, revised, and deleted codes; changes in descriptions, an index revision, which more than just to new codes; and tabular revision with notes on “includes” and “excludes” and on additional code use.

Who Is Required to Use ICD-10

All HIPAA-covered entities were required to transition to ICD-10 from ICD-9 in 2015. This includes Medicare, Medicaid, and most private insurance companies.

Insurers such as workers' compensation and auto insurers are not subject to HIPAA and were not required to switch, but most likely transitioned, anyway. This is because ICD-9 was no longer maintained after ICD-10 was implemented, and so it is in even a noncovered entity's best interest to use ICD-10. In addition, there is value in the increased detail in ICD-10, and CMS will work with noncovered entities to use it.

For cash-based services, provide what your patients need to submit to their payers. If you had been providing ICD-9 codes, it is likely you need to use ICD-10 codes for processing your patients' out-of-network claims.

To be sure, check with each payer for details.

How do I find the "official guidelines" for ICD-10?

ICD-10-CM was developed and is maintained by the World Health Organization and the National Center for Health Statistics within the Centers for Disease Control and Prevention. It is supplemented by a set of official guidelines that are designated as part of the ICD-10-CM code set by the HIPAA "medical data code set" regulations. The CDC updates these guidelines annually. Use the codes and the guidelines that correspond with the year in which you provide the service.

Are there different coding guidelines for inpatient and outpatient settings?

The code sets apply to all non-outpatient settings, such as acute care, short-term care, long-term care, and psychiatric hospitals; home health agencies; rehab facilities; and nursing homes.

An additional section in the guidelines addresses outpatient settings. The same rules apply for hospital-based outpatient settings and private outpatient settings.

Where do I find a list of ICD-10 codes?

The ICD-10-CM and official ICD-10-CM guidelines are available on the CMS ICD-10 website page that links to, among other things, a ZIP file that contains the code table and index.

Be sure that you are downloading the codes for the correct year that the services are provided.

Do I have to provide external cause codes?

There is no national requirement to report the ICD-10 codes for "external causes for morbidity," which are found in the official guidelines. You may have to provide these codes if you are subject to a state-based external cause code-reporting mandate or if a particular payer requires them. If your state or a private payer institutes such a requirement, it would be independent of ICD-10 implementation. Even without a reporting requirement, you are encouraged to voluntarily report external cause codes, as they provide valuable data for injury research and evaluation of injury-prevention strategies.

Does CMS have a list of ICD-10 codes that must be reported along with specific CPT codes for services to be considered medically necessary?

You will need to check with your local Medicare administrative contractor to determine if you're required to report certain ICD-10 codes along with specific CPT codes for Medicare coverage.

General Coding Guidance

Who determines what ICD-10 code will be used in the claim?

This depends on whether or not the organization uses coders. If so, CMS provides the following guidance: "A joint effort between the health care provider and the coder is essential to achieve complete and accurate documentation, code assignment, and reporting of diagnoses and procedures. The importance of consistent, complete documentation in the medical record cannot be overemphasized. Medical record documentation from any provider involved in the care and treatment of the patient may be used to support the determination of whether a condition was present on admission or not. In the context of the official coding guidelines, the term 'provider' means a physician or any qualified health care practitioner who is legally accountable for establishing the patient's diagnosis."

To ensure that you are using the best codes, communication with the coder and potentially the billing department is essential. Consider reviewing charts as a team so that you all can agree that the documentation is complete and proper codes are used for submission of the claim.

What should I know up front to be successful with coding?

You should note that code construction and guidance can change from body system to body system, from condition to condition, and from inpatient setting to outpatient setting, to name a few examples. Always orient yourself when considering an unfamiliar code, to be sure you are selecting what's most appropriate. Find the code in the ICD-10 guidelines, and read the chapter's introductory information in addition to any headings and subheadings notes preceding the specific codes you are considering.
For institutional settings, such as acute care, short-term care, long-term care, and psychiatric hospitals; home health agencies; rehab facilities; nursing homes, the code or codes are determined for a single patient's claim; there are not separate codes for each provider within the institution who treats that patient.

For outpatient settings, there is additional specific guidance for hospital-based and private outpatient clinics. See ICD-10-CM Official Guidelines for Coding and Reporting, Section IV. Diagnostic Coding and Reporting Guidelines for Outpatient Services.

What are the basic steps to use in selecting the codes?

You will find this information at ICD-10-CM Official Guidelines for Coding and Reporting.

Locate the term that best identifies the diagnosis or reason for visit in the Alphabetical Index. Always start you search with the Alphabetical Index to help ensure that you are looking up the correct code that most accurately reflects the condition.
Verify the code to the greatest level of specificity in the Tabular Index. Once you have identified the appropriate 3-digit code in the Alphabetical Index, use that code to search in the Tabular Index.
Make sure you understand the guidance from the ICD-10 Official Guidelines for Coding and Reporting. The guidelines note: "The most critical rule involves beginning the search for the correct code assignment through the Alphabetical Index. Never begin searching initially in the Tabular List as this will lead to coding errors."

You can download a ZIP file of the 2023 Alphabetical Index and Tabular index from CMS's website 2021 ICD-10-CM. First download the "2023 Code Tables and Index [ZIP, 21.0MB]. The files are titled "ICD10cm" Index 2023.pdf." and "ICD10cm Tabular 2023.pdf"

Can I use multiple codes?

Yes, use the number of codes needed to adequately describe the patient. List the diagnosis, condition, problem, or other reason for the encounter/visit shown in the medical record to be chiefly responsible for the services provided, and list additional codes that describe any coexisting conditions. Pay close attention to notes included with the codes; some codes cannot be used with other codes.

There are codes for Right, Left, or Unspecified. If the problem is bilateral, do I choose Unspecified or use two codes for both Right and Left?

This is a good example of the need to follow the guidance for each specific code. Do not assume that the instructions for one code will apply elsewhere. Some codes indicate right, left, and bilateral. Some indicate right and left but not bilateral, so if the condition affects the right and left you would use both. For some codes, such as torticollis, you might think a side would be appropriate, but the code does not provide that option. Below is an example of very specific instructions for a condition:

Codes from category I69, Sequelae of cerebrovascular disease, that specify hemiplegia, hemiparesis, and monoplegia identify whether the dominant or nondominant side is affected. Should the affected side be documented but not specified as dominant or nondominant, and the classification system does not indicate a default, code selection is as follows:

For ambidextrous patients, the default should be dominant.
If the left side is affected, the default is nondominant.
If the right side is affected, the default is dominant.

Can I use ICD 10 codes to report signs and symptoms?

Yes, signs and symptoms, and even "unspecified" codes, are at times not only acceptable but necessary. While you should report specific diagnosis codes when they are supported by the available medical record documentation and clinical knowledge of the patient's health condition, at times signs, symptoms, or unspecified codes are the most accurate code choices. Code each encounter to the level of certainty known for that encounter.

In an outpatient setting do our codes need to match the physician's?

No. Your coding needs to be as complete as you can make it based on confirmed information that you identify during the visit. You may use codes for signs or symptoms pertinent to the physical therapy services you provided--codes that the physician may not have included.

If I suspect my patient has a condition, such as a herniated disc, but he or she has had no imaging, do I code for what I suspect?

No, you code to the level you can confirm. If a herniated disc is not confirmed, you cannot code that one is present.

Should I report ICD-10 codes such as BMI if I believe it will influence the episode of care?

Yes, in this case, consider BMI (Z68 Body mass index [BMI]) an "Other Diagnoses," which is described as "all conditions that coexist at the time of admission, that develop subsequently, or that affect the treatment received and/or the length of stay. Diagnoses that relate to an earlier episode which have no bearing on the current hospital stay are to be excluded."

In an outpatient setting, how do you determine the first-listed condition?

HIPAA requires assigning ICD-10-CM diagnosis codes according to the ICD-10-CM Official Guidelines for Coding and Reporting. The ICD-10-CM Official Guidelines for Coding and Reporting FY 2023 state:

"List first the ICD-10-CM code for the diagnosis, condition, problem, or other reason for encounter/visit shown in the medical record to be chiefly responsible for the services provided. List additional codes that describe any coexisting conditions. In some cases, the first-listed diagnosis may be a symptom when a diagnosis has not been established (confirmed) by the provider."

"Codes for symptoms, signs, and ill-defined conditions from Chapter 18 are not to be used as principal diagnosis when a related definitive diagnosis has been established."

"Codes that describe symptoms and signs, as opposed to diagnoses, are acceptable for reporting purposes when a diagnosis has not been established (confirmed) by the provider."

Please note: APTA is aware of the many questions about the first-listed diagnosis for patients receiving outpatient physical therapist services. For clarification, APTA contacted the ICD-10 Cooperating Parties, which include the American Hospital Association, the American Health Information Management Association, CMS, and the Centers for Disease Control and Prevention. The Cooperating Parties agree that with the transition to ICD-10 it is important that all health care providers code consistently.

APTA recognizes that payers have not been consistent with instructions on the first-listed diagnosis, and physical therapists may not have been coding according to the guidelines above. Going forward with ICD-10, APTA believes the first-listed diagnosis should be consistent with the ICD-10 Coordinating Parties, payers, and other organizations.

If you follow the ICD-10-CM Official Guidelines for Coding and Reporting, and your claim is delayed or denied, contact APTA's Practice Department staff who can help answer questions or provide guidance.

Can the ICD-10 code change throughout the episode of care?

Yes, if the diagnosis becomes more definitive or additional diagnoses develop then add the appropriate ICD-10 code. Also add codes for identified signs and symptoms if they were not initially included as part of the diagnostic codes.

Aftercare Codes

What are aftercare codes, and when do I use them?

Aftercare visit codes (Z codes) cover situations in which the initial treatment of a disease has been performed or the injury or disease has been removed, and the patient requires continued care during the healing or recovery phase or for the long-term consequences of the disease. Do not use the Z code if treatment is directed at a current, acute disease. Use the diagnosis code in these cases.

Also, do not use the Z codes for aftercare for injuries that are still present. For aftercare following an injury, assign the acute injury code with the appropriate seventh character (for subsequent encounter).

For injuries, the appropriate seventh characters identify subsequent care with the diagnosis code. Use the acute injury code with the appropriate seventh character for subsequent encounter, such as "D."

To avoid payment delays or denials, check with your payers for their requirements on the use of aftercare codes.

Aftercare code examples:

Patient is seen by the PT after a total knee replacement to remove osteoarthritis in the right knee. Codes include:

Z47.1 Aftercare following joint replacement surgery
Z96.651 Presence of right artificial knee joint

Some common Z codes that physical therapists use include:

Z44: Encounter for fitting and adjustment of external prosthetic device. (Includes: removal or replacement of external prosthetic device. Excludes 1: malfunction or other complications of device presence of prosthetic device (Z97.-))

Z44.1 Encounter for fitting and adjustment of artificial leg
Z44.11 Encounter for fitting and adjustment of complete artificial leg
Z44.111 Encounter for fitting and adjustment of complete right artificial leg

Z47: Orthopedic aftercare (Excludes 1: aftercare for healing fracture-code to fracture with 7th character D)

Z47.1 Aftercare following joint replacement surgery
Use additional code to identify the joint (Z96.6-) (e.g. Z96.641 Presence of right artificial hip joint)

Z47.8: Encounter for other orthopedic aftercare

Z47.81 Encounter for orthopedic aftercare following surgical amputation
Z47.82 Encounter for orthopedic aftercare following scoliosis surgery
Z47.89 Encounter for other orthopedic aftercare

Z48: Encounter for other postprocedural aftercare (Excludes1: encounter for follow-up examination after completed treatment (Z08-Z09); Excludes2: encounter for attention to artificial openings (Z43.-); encounter for fitting and adjustment of prosthetic and other devices (Z44-Z46)

Z48.0: Encounter for attention to dressings, sutures and drains (Excludes1: encounter for planned postprocedural wound closure (Z48.1))
Z48.00: Encounter for change or removal of nonsurgical wound dressing; Encounter for change or removal of wound dressing NOS

Z48.2: Encounter for aftercare following organ transplant

Z48.21 Encounter for aftercare following heart transplant
Z48.22 Encounter for aftercare following kidney transplant
Z48.23 Encounter for aftercare following liver transplant
Z48.24 Encounter for aftercare following lung transplant
Z48.28 Encounter for aftercare following multiple organ transplant
Z48.280 Encounter for aftercare following heart-lung transplant
Z48.288 Encounter for aftercare following multiple organ transplant

Use of the 7th Character

What is the Seventh character, and when do I use it?

ICD-10 added the code extensions, or seventh character, for injuries and external causes to identify the encounter: initial, subsequent, or sequela. The applicable seventh character is required for all codes within the category, or as the notes in the Tabular List instruct. The code extension to identify encounter must always be in the seventh position of the data field, so if a code that requires a seventh character does not have six characters, use a placeholder X to fill in the empty character(s).

Do all codes have seven characters?

No, ICD-10-CM diagnosis codes may contain between three and seven characters. Codes with three characters are included in ICD-10-CM as the heading of a category of codes that may be further subdivided using fourth-sixth characters, which provide greater detail. Codes for injury or trauma generally have a seventh code. In addition, it is used in the Obstetrics, Musculoskeletal, and External Cause chapters.

Use a three-character code only if it is not further subdivided. A code is invalid if it has not been coded to the full number of characters required for that code, including the seventh character, if applicable.

How and when do I use the seventh character?

The seventh character focuses on the patient's condition and the specific circumstance related to the treatment of the condition; not the health care provider being seen. This means "initial" or "subsequent" encounter is based on the patient's course of treatment and not whether it is his or her first visit vs follow-up treatment with a provider.

A = initial encounter

Definition: When the patient is receiving active treatment for the condition
Examples: surgical treatment, emergency department encounter and evaluation and treatment by a new physician

D = subsequent encounter

Definition: For encounters after the patient has received active treatment of the condition and is receiving routine care for the condition during the healing or recovery phase
Examples: cast change or removal, removal of external or internal fixation devices, medication adjustment or other aftercare and follow-up visits following treatment of the injury or condition

S = sequela

Definition: Complications or conditions that arise as a direct result of a condition
Example: scar formation after a burn
NOTE: This is typically a second code. The presenting complication is listed first.

The common fracture extensions include greater detail: Example:

A = Initial encounter for closed fracture
B = Initial encounter for open fracture
D = Subsequent encounter for fracture with routine healing
G = Subsequent encounter for fracture with delayed healing
K = Subsequent encounter for fracture with nonunion
P = Subsequent encounter for fracture with malunion
S = Sequelae

Refer to the tabular section of the ICD-10 coding guidelines to identify if a 7th seventh character is required and what it is.

When do I use an X as a placeholder?

Some ICD-10 categories indicate there is an applicable seventh character, which then is required for all codes within the category, unless the notes in the Tabular List instruct otherwise. The seventh character must always be in that position, so if a code is fewer than six characters, use a placeholder X to fill in the empty characters.

When submitting a claim for the first physical therapy encounter with the patient, should I use the "initial encounter" seventh character?

Not all ICD-10 codes require use of a seventh character. If a code does, you need to determine whether the patient is in an active phase of care or a healing or recovery phase. In most instances, physical therapy would be considered part of the healing or recovery phase of care. If the patient is in the healing and recovery phase, then you would report the "subsequent encounter" code for the first physical therapy visit.

If a patient comes to me under direct access, do I use the seventh character for an initial visit?

Before you try to figure out if a visit is initial, subsequent, or sequelae, determine if the code requires a seventh character. If it does not, then the initial, subsequent, and sequelae characters are irrelevant for that code.

If a patient comes to you under direct access and has not seen another provider for the condition and you are providing active treatment, it would be considered the initial encounter. This is true for private practice and hospital-based outpatient services. In this scenario, if a seventh character is required for the ICD-10 code, you would use the "initial" seventh character for this first visit and use "subsequent" as the seventh character for visits after that.

What is the "sequela" seventh character, and when do I use it?

A sequela is the residual effect (produced by the condition) after the acute phase of an illness or injury has ended. There is no time limit on when a sequela code can be used. The residual may be apparent early, such as in cerebral infarction, or it may occur months or years later, such as recent pain due to an old injury. Examples of sequela include scar formation resulting from a burn, deviated septum after a nasal fracture, and infertility caused by tubal occlusion from past tuberculosis. Reporting sequela generally requires two codes sequenced in the following order: the condition or nature of the sequela, then the sequela code.

When using seventh character "S," use both the injury (or other condition) code that precipitated the sequela and the code for the sequela itself. Add the "S" only to the injury code, not the sequela code. The "S" identifies the injury or condition responsible for the sequela. The specific type of sequela, such as a scar, is sequenced first, followed by the injury code.

An exception to the above guidelines is when the code for the sequela is followed by a manifestation code identified in the tabular list and title, or the sequela code has been expanded (at the 4th, 5th or 6th character levels) to include the manifestation(s). The code for the acute phase of an illness or injury that led to the sequela is never used with a code for the late effect.

Is there a time limit for coding a subsequent visit?

The use of the initial or subsequent visit is not based on time. The seventh character “D” for “subsequent encounter" is used for encounters after the patient has received active treatment of the condition and is receiving routine care for the condition during the healing or recovery phase. If your patient is still in the healing and recovery phase and you are not seeing him or her initially under direct access, you would use "subsequent" if the appropriate code requires the seventh character. Examples of subsequent care are cast change or removal, an x-ray to check healing status of fracture, removal of external or internal fixation device, medication adjustment, and other aftercare and follow-up visits following treatment of the injury or condition.

Documentation

Do I need to include the ICD-10 code in my documentation?

No. While you would need to document a diagnosis, you do not need to include the actual ICD-10 code in your documentation; however, you must document all the details including test and measures that were performed, patient complaints and comments, and identified past medical history that led you to use those ICD-10 codes.

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