1. Chapter 11:
Diagnostic Coding

2. Learning Outcomes Cognitive Domain
Note: AAMA/CAAHEP 2015 Standards are italicized.
1. Spell and define the key terms
2. Describe the relationship between coding and reimbursement
3. Name and describe the coding system used to describe diseases, injuries, and other reasons for encounters with a medical provider
4. Explain the format of the ICD-9-CM
5. Give four examples of ways E codes are used
6. Describe how to use the most current diagnostic coding classification system
7. Describe the ICD-10-CM/PCS version and its differences from ICD-9

3. Learning Outcomes (cont'd.)
Psychomotor Domain
Note: AAMA/CAAHEP 2015 Standards are italicized.
1. Perform diagnostic coding (Procedure 11-1)
2. Utilize medical necessity guidelines (Procedure 11-1)

4. Learning Outcomes (cont'd.)
Affective Domain
Note: AAMA/CAAHEP 2015 Standards are italicized.
1. Work with physician to achieve the maximum reimbursement
2. Utilize tactful communication skills with medical providers to ensure accurate code selection

5. Learning Outcomes (cont'd.)
ABHES Competencies
1. Apply third-party guidelines
2. Perform diagnostic and procedural coding
3. Comply with federal, state, and local health laws and regulations

6. Introduction
Coding is the assignment of a number to a verbal statement or description. It is used for health insurance claims processing. Correct coding is essential. Incorrect or incomplete information can result in nonpayment of claim and incorrect insurance data can affect a patient’s insurability.
International Classification of
Diseases, Ninth Revision, Clinical Modification (ICD-
9-CM: a system for transforming verbal
descriptions of disease, injuries, conditions, and procedures to numeric code
It is essential that the physician and medical assistant work together to achieve accurate documentation, code assignment, and reporting of diagnoses and procedures.
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7. Introduction (cont’d.)
The third-party payer needs to know why a service was performed to assess medical necessity. And, the diagnosis justifies the procedure.
medical necessity: a determination made by a third party that a certain service or procedure was necessary based on
sound medical practice
advance beneficiary notice (ABN): document that informs covered patients that Medicare may not cover a certain service and the patient will be responsible for the bill
Since Medicare considers certain procedures medically necessary only at certain intervals, having the patient sign an advance beneficiary notice will ensure payment of treatments and procedures that will likely be denied by Medicare.
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8. What is meant by medical necessity?
Checkpoint Question
What is meant by medical necessity?
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9. Checkpoint Answer
Medical necessity means a particular service or procedure is reasonable.
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10. Diagnostic Coding
ICD-9-CM: statistical classification system based on the WHO
System for changing verbal descriptions into standardized numeric codes
New ICD-10-CM provides more detailed and current information
ICD-9-CM: 13,000 diagnoses codes, < 4,000 procedure codes
ICD-10-CM: 70,000 diagnoses codes, 72,000 procedure codes
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11. Diagnostic Coding (cont’d.)
Three volumes of ICD-9:
Volume 1 = Tabular list of diseases
Volume 2 = Alphabetical index of diseases
Volume 3 = Tabular list and alphabetical index of procedures
Changes must be approved by WHO
New codes published every October — keep office soft-ware and code books updated
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12. Checkpoint Question
What organization must approve any changes in the disease classification system?
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13. Checkpoint Answer
The World Health Organization must approve any changes in the coding system.
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14. Diagnostic Coding (cont’d.)
Inpatient Versus Outpatient Coding
Volumes 1 and 2 are used to justify physician services where services are provided in office or in hospital
Outpatient services provided at:
Health care provider’s office
Hospital clinic
Emergency department
Hospital same-day surgery unit or ambulatory surgical center
Observation status in hospital for short-stay
Inpatient services:
Patient admitted for treatment, staying for 24 hours or more
inpatient: a medical setting in which patients are admitted for diagnostic, radiographic, or treatment purposes
outpatient: a medical setting in which patients receive care but are not admitted
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15. Diagnostic Coding (cont’d.)
Volume 3 is used by hospitals to report procedures, services, supplies, and reasons for procedures
UB-04 (uniform bill) for inpatient admissions, outpatient procedures, and emergency services:
For nursing services and costs associated with running institution
Does not include physician services
CMS-1500 claim form to report physician services
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16. Name and give uses for the three volumes of the ICD-9-CM.
Checkpoint Question
Name and give uses for the three volumes of the ICD-9-CM.
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17. Checkpoint Answer
Volumes 1 and 2 of the ICD-9-CM are used to report the diagnostic code that justifies physician services whether those services are provided in the office or in the hospital. Hospital coders use Volume 3 to report inpatient procedures, services, and supplies, as well as the reasons for the services.
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18. The Diagnostic Codebook
Coding books available from several publishers:
Ingenix
Medicode
AMA
Classification system available as part of medical software packages
For accuracy—always use most current codes:
Important to update codes on superbills or other forms
Millions of dollars lost due to incorrect code on form not updated
To become an expert medical coder, you need general knowledge of human anatomy and medical terminology.
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19. Checkpoint Question
How often is the ICD-CM updated? When is the use of the new codes required?
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20. Checkpoint Answer
ICD-CM is updated annually, published in late summer and effective every October 1st.
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21. The Diagnostic Codebook (cont’d.)
Tabular List of Diseases
Classification of conditions and injuries by code number
17 chapters in ICD-9-CM; 21 chapters in ICD-10-CM
Grouped by etiology and body systems
Each chapter is assigned a range of code numbers
Three-digit codes = general disease
Fourth digit = further breaks down category
Fifth digit = highest specificity
Always used to code condition to highest definition
Includes 5 appendices
Etiology: cause of disease
Truncated coding: diagnosis coding that is not done at the highest level available for a particular diagnosis or problem
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22. The Diagnostic Codebook (cont’d.)
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Table of contents from ICD-9-CM, Volume 1, and ICD-10-CM
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23. The Diagnostic Codebook (cont’d.)
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Sample page from ICD-9-CM, Volume 1, showing categories, subheadings, and so on
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24. The Diagnostic Codebook (cont’d.)
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25. The Diagnostic Codebook (cont’d.)
Supplementary Classifications
ICD-9-CM
V-codes
E-codes
ICD-10-CM
Chapter 20, External Causes of Morbidity
Chapter 21, Factors Influencing Health Status and Contact with Health Services
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26. The Diagnostic Codebook (cont’d.)
Factors Influencing Health Status
V01 to V82 in ICD-9-CM
Z00 to Z99 in Chapter 21 in ICD-10-CM
Gives reason for physician or hospital care not due to current illness
History of illness
Immunizations
Live-born infant type of birth
ICD-10-CM gives additional codes to further explain situation include lifestyle problems
V-codes: codes assigned to patients who receive service but have no illness, injury, or disorder, e.g., a vaccination or a screening mammogram
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27. The Diagnostic Codebook (cont’d.)
External Causes of Injury
E800 to E999 in ICD-9-CM
Chapter 20 in ICD-10-CM
Codes for external causes of injury and poisoning
Used in conjunction with regular codes in chapters 1–17
Do not affect reimbursement — used for statistics in industry, insurance, national safety, public health
ICD-9-CM, Volume 2, Section 3, separate index to access E codes
E-codes: codes indicating the external cause or reason for an injury or illness
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28. List four reasons for using supplemental codes.
Checkpoint Question
List four reasons for using supplemental codes.
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29. Insurance underwriters National safety programs
Checkpoint Answer
Supplemental codes are used to provide information concerning injuries:
Industrial medicine
Insurance underwriters
National safety programs
Public health agencies and others
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30. The Diagnostic Codebook (cont’d.)
Alphabetic Index of Diseases
Arranged by condition
ICD-9-CM has 3 sections; ICD-10-CM has replaced section 3 with chapter 20
Section 1:
Alphabetic Index to Diseases and Injuries
Main terms along with codes
Must cross-reference or check tabular list to ensure correctness
System of exceptions
cross-reference: notation in a file telling that a record is stored elsewhere and giving the reference; verification to another source; checking the tabular list against the alphabetic list in ICD-9 coding
You must not accept a number as the correct code without a cross-reference or check of the tabular list.
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31. The Diagnostic Codebook (cont’d.)
Section 2:
Table of Drugs and Chemicals
Includes drugs, toxins, chemical agents
Section 3:
Alphabetic Index to External Causes of Injuries and Poisonings
Accidents, injuries, and violence
Not used for medical diagnoses — supplement the diagnosis to give clearer picture
Should not be used alone
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32. Checkpoint Question
What are supplemental codes to classify Factors Influencing Health Status used for?
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33. Checkpoint Answer
Supplementary codes to classify Factors Influencing Health Status are used to report reasons for receiving services other than illness.
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34. The Diagnostic Codebook (cont’d.)
Inpatient Coding
Tabular List and Alphabetic Index of Procedures
Used for inpatient facilities
Based on anatomy, not to surgical specialty
Includes miscellaneous diagnostic and therapeutic procedures
Two-digit codes with two-decimal digits
Replaced by ICD-10-PCS
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35. Locating the Appropriate Code
conventions: general notes, symbols, typeface, format, and
punctuation that direct and guide the coder to the most complete and accurate ICD-9 code
Using the Diagnostic Coding Conventions
Conventions are standardized and must be strictly followed
Main Term
Choose main term within diagnostic notes – often an eponym
Find the condition, not the location
eponym: word derived from a personal name, e.g., Alzheimer disease
main term: words in a multiple-word diagnosis that a coder should locate in the alphabetic listing. They represent the condition (not the location to be coded.
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36. Locating the Appropriate Code (cont’d.)
Conventions used in diagnostic coding
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37. Locating the Appropriate Code (cont’d.)
Additional Digits
In many cases a fourth digit has been added to provide more specificity
Others also have fifth digit
ICD-9-CM codes requiring a fifth digit are identified in both volumes 1 and 2
ICD-10-CM may have 4 to 7 additional digits
specificity: relating to a definite result
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38. Locating the Appropriate Code (cont’d.)
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Samples of fifth-digit classifications from ICD-9-CM. (A) Volume 1. (B) Volume 2.
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39. Locating the Appropriate Code (cont’d.)
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Samples of seventh-digit classification from ICD-10
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40. Locating the Appropriate Code (cont’d.)
Primary Codes
Primary diagnosis in outpatient coding
Primary code listed first on the CMS-1500
When More Than One Code Is Used
Necessary to convey accurate picture of the patient’s total condition
If any condition is related to or affects treatment, should be listed as supplementary information
Multiple codes should be sequenced
Allows 12 different diagnostic codes
primary diagnosis: the condition or chief complaint that brings a person to a medical facility for treatment
When patients have more than one diagnosis, it is necessary to convey an accurate picture of the patient’s total condition.
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41. Locating the Appropriate Code (cont’d.)
Sample CMS-1500 claim form indicating proper sequencing.
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42. Locating the Appropriate Code (cont’d.)
Late Effects
Code late affects with current complaint first, then original cause second
Key words defining late effects
“late”
“due to an old injury”
“due to a previous illness/injury”
“due to an illness or injury occurring a year or more ago”
“sequela of …”
“as a result of…”
“resulting from …”
late effects: conditions that result from another condition. For example, left-sided paralysis may be a late effect of a stroke
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43. Locating the Appropriate Code (cont’d.)
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Sample section of late effects in ICD-9-CM. (A) Volume 1. (B) Volume 2.
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44. Locating the Appropriate Code (cont’d.)
Coding Suspected Conditions
Inpatient setting — coders list conditions after testing is complete
Outpatient-coder reports reason for visit as it occurs
First visit is “headache
MRI ordered for:
“Rule out”
“Suspected”
“Probable”
Not accurate to code visit as “brain tumor” before it is confirmed
Symptom code
In outpatient settings, the coder reports the reason for the patient visit as it occurs.
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45. Checkpoint Question
When coding a visit on a date before a definitive diagnosis is made, what is coded?
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46. Checkpoint Answer
Before a definitive diagnosis is assigned to a patient, services must be coded with the patient’s symptoms at the time he or she was seen.
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47. Locating the Appropriate Code (cont’d.)
Documentation Requirements
Code based on patient’s medical documentation
If not in the chart, didn’t happen
Audits compare codes used with patient documentation
Audits ensure compliance and detect fraud
audit: a review of an account; inspection of records to
determine compliance and to detect fraud
As discussed throughout this chapter, you should choose the code assigned to any given claim for a service or procedure based on the documentation available in the patient’s record at the time of the service.
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48. Scheduled to be implemented on October 1, 2015
The Future of Diagnostic Coding: International Classification of Diseases, Clinical Modification, Tenth Revision
Scheduled to be implemented on October 1, 2015
WHO has revised ICD to improve data quality
Includes more codes and will be used by every type of health care provider for all encounters, including hospice and home health care
Codes are alphanumeric
Index similar to that of ICD-9-CM
Two new chapters added:
Disorders of eye
Basic knowledge of ICD-9-CM will prove invaluable
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49. Many conventions will not change
The Future of Diagnostic Coding: International Classification of Diseases, Clinical Modification, Tenth Revision (cont’d.)
Conventions
Many conventions will not change
One difference is “Excludes” notes — ICD-10 uses two:
“Excludes1” means not coded here and does not allow for exceptions
“Excludes2” indicates that if medical documentation supports both conditions, both may be coded
Placeholder “X”
Some disorders will require a 7th character in ICD-10-CM
Some will have no 5th or 6th, and “X” is used as a placeholder
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50. Used with external cause code + place of occurrence code
The Future of Diagnostic Coding: International Classification of Diseases, Clinical Modification, Tenth Revision (cont’d.)
Special Codes
E-Codes and V-Codes:
No longer located in supplemental listing but are in main classification system
Don’t start with E and V
Used with external cause code + place of occurrence code
Diabetes mellitus codes:
Changing considerably
Provide more detail
Find training opportunities through various coding professional organizations and the CMS
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51. The Future of Diagnostic Coding: International Classification of Diseases, Clinical Modification, Tenth Revision (cont’d.)
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52. Checkpoint Question
How will the implementation of ICD-10-CM improve the coding of reasons for services?
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53. Checkpoint Answer
In ICD-10-CM, the longer combination of numbers and letters allows for expanding of the system as new technologies are discovered and used. The codes will also provide more information which will enhance efficiency and accuracy.
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