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Deep Dive into ICD-10-CM: Misunderstood Coding Guidelines

Diagnosis accuracy, long a critical component of the MDS, is escalating in importance. With the recently released draft Long-Term Care Facility Resident Assessment Instrument (RAI) 3.0 User’s Manual version 1.18.11, which will become effective October 1, 2023, the Centers for Medicare & Medicaid Services (CMS) is increasing its scrutiny of diagnosis assignment. The draft RAI User’s Manual incorporates information previously released in the July 15, 2022, errata document which explains that the medical record must contain appropriate diagnostic information from the physician to document MDS diagnosis assignment. Therefore, skilled nursing facility (SNF) staff responsible for assigning ICD-10-CM codes based on physician documentation must understand coding conventions and guidelines. This article will assist all SNF ICD-10-CM coders (e.g., nurse assessment coordinators and therapists) to better understand this guidance by exploring five commonly misunderstood conventions and guidelines.

Convention – Code assignment and clinical criteria

Per the ICD-10-CM Official Guidelines for Coding and Reporting for FY 2023, updated April 1, 2023, “The assignment of a diagnosis code is based on the provider’s diagnostic statement that the condition exists. The provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.”

This differs significantly from the RAI User’s Manual (v1.17.1 and v1.18.11) instruction on page I-12 where CMS requires more medical record documentation than just a diagnosis from the physician or non-physician practitioner (NPP) to code a diagnosis on the MDS. It states:

In situations where practitioners have potentially misdiagnosed residents with a condition for which there is a lack of appropriate diagnostic information in the medical record, such as for a mental disorder, the corresponding diagnosis in Section I should not be coded, and a referral by the facility and/or the survey team to the State Medical Boards or Boards of Nursing may be necessary.

Additionally, the CMS memo QSO-23-05-NH, which addresses the new audits reviewing schizophrenia coding on the MDS indicates that facilities “should work with their psychiatric providers and medical directors to ensure the appropriate professional standards and processes are being implemented” prior to diagnosing individuals with schizophrenia.

So, what is a coder to do when two different sets of rules conflict? The SNF coder must follow both the ICD-10-CM Official Guidelines for Coding and Reporting and the RAI User’s Manual instructions. When assigning a code in section I of the MDS, the coder must apply the more restrictive RAI User’s Manual instructions. CMS’s concern is the inappropriate assignment of schizophrenia to exclude the resident from triggering the two antipsychotic quality measures (QMs). The additional guidance in the RAI User’s Manual that exceeds the instruction in the ICD-10-CM Official Guidelines for Coding and Reporting ensures more scrutiny before the physician assigns this diagnosis. While the ICD-10-CM guidelines are more permissive, to assign a diagnosis code to the MDS, the facility must follow CMS’s more stringent instruction and guidance from the RAI User’s Manual.

Convention – Exclusion notes

The ICD-10-CM guidance contains two types of excludes notes: Excludes1 and Excludes2. Coders often misunderstand these two types of notes. The exclusion notes are found in the Tabular List to indicate that codes excluded from each other are independent of each other.

  • Excludes1 – This is a true excludes note. When reviewing a code in the Tabular List, if there is an Excludes1 note under the three-digit character code, or of the more specific code itself, it means that both codes cannot be used at the same time. For example, consider a situation in which the diagnosis of depression with a category code of F32 has an Excludes1 note that lists bipolar disorder F31.- This means one cannot code a depressive episode diagnosis under code F32.- at the same time as bipolar disorder. If the medical record shows that the physician has documented both, SNF staff must query the physician for clarification.
  • Excludes2 – This indicates that the code is not included in the description of the original code, but both codes could exist in the medical record if there is physician documentation to support both diagnoses. For example, also under the three-digit category code of F32.- for depressive episode is an Excludes2 note listing adjustment disorder F43.2. This means that the depressive episode code of F32.- does not include the code of F43.2, but if the physician has documented both conditions, both codes could apply.

If a SNF coder does not use the Tabular List, he or she may miss these instructions. Some coding systems, in settings other than nursing facilities, have coding guidance embedded into the ICD-10-CM billing software that prohibits two Excludes1 codes from being used together. If the facility is attached to a hospital, the SNF ICD-10-CM coder may be lucky enough to use this type of software. However, most nursing facilities do not use this advanced software when adding a code to the medical record. The importance of using the ICD-10-CM Official Guidelines for Coding and Reporting cannot be overstated.

Convention – NOS versus NEC

The NOS, or not otherwise specified, and NEC, not elsewhere classifiable, items appear under the coding convention “abbreviations” in the ICD-10-CM Official Guidelines for Coding and Reporting. Although users often confuse them, each has a distinct purpose. NOS communicates that the physician or NPP has documented a diagnosis that does not have enough detail to support the more specific ICD-10-CM codes that are available in the manual. For example, the physician may document seizure disorder. The medical record may contain no other specifics about the type or cause of the seizure disorder, but several more specific ICD-10-CM codes are available. G40.909 would be the correct code, as seizure disorder NOS is listed as an inclusion term under this code in the Tabular List.

NEC refers to a diagnosis for which a physician or NPP has provided specifics in the medical record, but none of the current codes in the ICD-10-CM manual reflect that level of detail. Using a code with NEC means there is not a more specific ICD-10-CM code to assign. Chapter 18 of the ICD-10-CM manual explores this type of code. Usually, facilities should not use codes from this chapter if there is a more specific diagnosis or code that should be assigned. For example, R26.2, Difficulty in walking, not elsewhere classified, indicates that the medical record documents the cause of the difficulty, but there is not a corresponding ICD-10-CM code to assign. However, if a specific diagnosis is causing the difficulty walking, such as a hip fracture, code the specific diagnosis. In this example, only the hip fracture would be coded, not R26.2, since the specified cause of the difficulty walking has its own code.

General coding guidelines – Signs, and symptoms, and conditions that are an integral part of a disease process

Facilities can include in the medical record codes that describe signs and symptoms, rather than a definitive diagnosis, when there is not yet a related definitive diagnosis. However, once the physician has established a definitive diagnosis, the facility should mark the signs and symptoms code as resolved. Chapter 18 of the ICD-10-CM manual, “Symptoms, signs, and abnormal clinical and laboratory findings, not elsewhere classified (R00-R99)” contains many such codes. Often, the rehabilitation treatment codes are signs and symptoms codes. If a definitive diagnosis routinely includes a sign or symptom, code only the definitive diagnosis. For example, someone with pneumonia often has an acute cough as a symptom. The code R05.1, Acute cough is not appropriate in this case; the facility would use only the code for pneumonia. However, if there is a sign or symptom that is not usually associated with a condition, code that sign and symptom, in addition to the definitive diagnosis code. For example, hemoptysis is not a usual symptom of pneumonia, so R04.2, Hemoptysis would be appropriate to code with the pneumonia diagnosis.

Chapter-specific coding guideline – Chapter 21: “Factors influencing health status and contact with health services (Z00-Z99)” – Use of Aftercare Z codes with an injury

Chapter 21 of the ICD-10-CM manual contains what are known as Z codes. Many of these codes are appropriate for use in the SNF setting and many serve as a primary diagnosis. Care provided in the SNF setting is often aftercare following a hospitalization for a surgery or procedure. A Z code for aftercare following surgery to a body system represents these situations. However, when the aftercare relates to an injury, the coder may not use the Z code for aftercare. Following injuries, the aftercare is represented by the acute injury ICD-10-CM code with a subsequent encounter 7th character (in most cases D). For example, a resident breaks his right hip and the hip is repaired with a joint replacement. Although there are codes for aftercare following joint replacement surgery (Z47.1) and encounter for other orthopedic aftercare (Z47.8), neither of these codes is appropriate to use with a fracture. S72.001D would indicate the acute fracture, with the 7th character of D indicating subsequent care with routine healing. This subsequent care character communicates all the aftercare needed for this condition, including rehabilitation and nursing care.

For more information on ICD-10-CM coding, check out the ICD-10-CM Official Guidelines for Coding and Reporting for FY 2023, as well as AAPACN’s ICD-10-CM Coding Certificate Program for SNFs and the new Introduction to ICD-10-CM Coding for Long-Term Care course coming to the Resident Assessment Coordinator—Certified (RAC-CT) education and certification program on July 10.

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