AAPACN is dedicated to supporting post-acute care nurses provide quality care.

Accurate ICD-10 Coding Requires a Deeper Dive

A nurse assessment coordinator (NAC) needs an ICD-10-CM diagnosis code for MDS section I (Active Diagnoses) or a Medicare claim. They enter the physician-documented, active diagnosis into a software tool or online lookup tool and then choose an ICD-10 code from the list of options that pops up. Simple, right?

Not so fast, says Jennifer LaBay, RN, RAC-MT, RAC-MTA, CRC, a curriculum development specialist with AAPACN. “ICD-10 coding involves more than plugging in numbers from a list. Doing ICD-10 coding without using the ICD-10-CM Official Guidelines for Coding and Reporting is like doing MDS coding without using the Long-Term Care Facility Resident Assessment Instrument 3.0 User’s Manual.”

To accurately code the MDS, NACs and other assessors must know the instructions and intent behind each MDS item, notes LaBay, who will present the session “ICD-10 Codes and Quirks: Focus on Fractures, Diabetes, and Cardiovascular Codes” at Connected | Together, the April 12 – 14 AAPACN 2022 Conference in Las Vegas, NV. “Similarly, you don’t want to fly by the seat of your pants with ICD-10 coding. There are conventions and instructions—requirements behind the codes—that you need to follow.”

Medical review before and after PDPM

Accurate ICD-10 code assignment and sequencing have been mandated for many years under the Health Insurance Portability and Accountability Act (HIPAA), points out LaBay. “However, no one really audited ICD-10 coding in nursing homes. During medical reviews prior to the implementation of the Patient-Driven Payment Model (PDPM) in the Skilled Nursing Facility Prospective Payment System (SNF PPS), Medicare auditors would check diagnoses in the medical record as part of making a coverage determination. Then, they would look to see whether the documentation supported the MDS coding that generated the billed HIPPS code, but there was no true focus on the accuracy of the ICD-10 codes.”

Under PDPM, ICD-10 coding directly impacts case-mix classification for the first time, says LaBay. “A lot of the payment is now diagnosis-based. If you don’t have the correct ICD-10 codes in place on the MDS, it can affect, for example, the clinical category for the physical therapy (PT) and occupational therapy (OT) components and the comorbidity score calculation for the non-therapy ancillary (NTA) component.”

Note: For details on the way that ICD-10 codes captured in MDS items I0020B (ICD Code/Resident’s Primary Medical Condition) and I8000 (Additional Active Diagnoses) influence PDPM payment, including how each fiscal year’s PDPM ICD-10-CM Mappings file connects accurate ICD-10 coding on the MDS to the payment components, see the PDPM Calculation Worksheet for SNFs in chapter 6 of the RAI User’s Manual.

While the COVID-19 public health emergency slowed the rollout of PDPM audits, providers may see ICD-10 coding accuracy targeted during Medicare medical reviews going forward, suggests LaBay. “Any time that money is involved, there will be some review—and ICD-10 coding is a very easy area for medical reviewers to review and find incorrect if you don’t follow the coding guidance.”

Inaccurate ICD-10 coding also could be a Pandora’s box that spurs medical reviewers to dig deeper in additional areas, says LaBay. “For example, if you don’t follow the rules for coding fracture aftercare, they may ask, ‘What other rules are you not following? Are you also not following Medicare coverage guidelines? Are you also not following the coding instructions in the RAI User’s Manual?’”

The problem for nursing homes is a sector-wide lack of ICD-10 training and resources, says LaBay. “Other provider types—from hospitals to physician practices—have trained coders working in their billing offices. They aren’t clinicians, but they review the physician documentation and know the coding rules. They also have advanced coding software that can steer coders to the most appropriate ICD-10 code based on the coding guidance.”

Conversely, all SNFs and NFs have is human power, says LaBay. “Unless you are lucky enough to be attached to a hospital, and you have your own coders with access to that type of coding software, you are on your own. That puts nursing homes at a great disadvantage—both on the individual facility level and across the entire sector. You have to know ‘Why can’t I code this and this together?’ because you don’t have complex coding software to guide you, and finding answers means that you must do a deep dive into the coding guidelines to learn what those different things mean.”

Why training is worth the effort

On the positive side, developing this knowledge offers multiple benefits, says LaBay. “Understanding the ICD-10 coding guidelines and knowing how to capture codes based on that guidance is a key step in ensuring that you have the ICD-10 codes in place to obtain accurate case-mix classification under PDPM, as well as to guide the plan of care. In other words, it gives you extra ammunition to do your job—and a key marketable skill.”

ICD-10 education also provides some legal comfort, says LaBay. “When you sign your name for section I at Z0400 (Signatures of Persons Completing the Assessment or Entry/Death Reporting), that is an attestation. You are putting it on the line that section I is coded appropriately, and part of that is knowing what the ICD-10 coding guidance is. So, education can help you feel confident about signing your name to an MDS.”

How is ICD-10 structured?

The Centers for Medicare & Medicaid Services (CMS) and the National Center for Health Statistics (NCHS) at the Centers for Disease Control and Prevention (CDC) issue updated code sets for each fiscal year (FY) that take effect every Oct. 1, as well as releasing updates as needed. For example, FY 2022 code sets and coding guidelines were implemented on Oct. 1, 2021, and revisions to both will go into effect this April 1. Note: Find these updated resources here.

The ICD-10 code sets include two primary components:

  • The Alphabetic Index is an alphabetical list of diagnoses and their corresponding ICD-10 code.
  • The Tabular List is a structured code list (with categories, subcategories, and codes) that is broken into chapters based on body system or condition.

The coding guidelines, officially the ICD-10-CM Official Guidelines for Coding and Reporting, are a set of rules that complement and expand upon the coding and sequencing instructions in the Tabular List and Alphabetic Index. Some key components of these additional instructions include the following:

  • Conventions are the general rules of the road for using the ICD-10 classification system (e.g., the conventions explain the role of 7th characters, what “other” codes and “unspecified” codes are used for, and the two types of “excludes” notes).
  • General coding guidelines are the core instructions for locating, assigning, and sequencing ICD-10 codes (e.g., the general guidelines explain how to use the Alphabetic Index and the Tabular List, when and how to code sequelae (late effects), and when codes can be assigned based on documentation by clinicians other than the resident’s physician or nonphysician practitioner (NPP)).
  • Chapter-specific coding guidelines provide coding instructions for specific diagnoses and/or conditions broken out by the same chapters used in the Tabular List (e.g., chapter 1 is “Certain Infectious and Parasitic Diseases (A00-B99), U07.1, U09.9,” and it includes guidelines for coding methicillin-resistant Staphylococcus aureus (MRSA) conditions).

“Many beginner coding classes emphasize the coding conventions and the general coding guidelines,” notes LaBay. “My conference session will focus on the higher-level chapter-specific coding guidelines. I will drill down and pay close attention to specific chapters that frequently impact nursing homes to address common ICD-10 coding mistakes. That will include looking at the coding conventions and the general coding guidelines to help orient beginning coders, but I will take the approach of applying them from the standpoint of the chapter-specific guidance.”

LaBay offers two examples of the types of diagnoses that she will highlight:


“Fractures often are miscoded because NACs and other coders go by what the doctor has listed instead of the coding guidance,” says LaBay. “For example, a resident had a hip fracture that was repaired surgically with an open reduction with internal fixation (ORIF) or a hip replacement. Then, the physician documented it as ORIF or hip replacement throughout the medical record. Some coders may incorrectly say, ‘We need to do an aftercare Z code,’ because they are not familiar with the chapter-specific coding guidelines that state that aftercare codes should not be used with an injury diagnosis.”

Sequelae of cerebrovascular accident (CVA)

“Often, the physician will document a CVA without listing any late effects or sequelae associated with that CVA,” says LaBay. “Not seeing—and not coding—the relationship between the CVA and any sequelae could have a huge impact on payment and care.”

First, acute CVA codes shouldn’t be used in the long-term setting, but some coders do try to code them, says LaBay. “In addition, there is a big difference between a resident who has had a CVA and has aphasia, vs. someone who has had a CVA and has hemiplegia, and failing to get the right codes in place also can affect payment.”

On the care side of the equation, if the physician is just writing CVA in the medical record, how does the team treat that? asks LaBay. “There could be several different sequelae of that CVA that the team needs to know about. For example, therapy may see dysphagia or aphasia and treat it as a straight issue vs. as the sequela of the resident’s CVA that it actually is if it’s not coded correctly. Coders need to understand to query the physician or NPP in this scenario to ensure that the resident’s diagnosis connects from the documentation all the way through to the plan of care and the provision of care—and then use the chapter-specific guidance to capture the correct code.”

Note: To find LaBay’s Wednesday, April 13 session on the conference schedule and make plans to attend, download the conference brochure here. LaBay encourages attendees to come with any and all ICD-10 coding questions that they have.

For permission to use or reproduce this article in full or in part, please complete a permissions form