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FY 2021 ICD-10 Coding Updates: How to Prepare

On Oct. 1, the revised fiscal year (FY) 2021 ICD-10-CM code sets and FY 2021 ICD-10-CM Official Guidelines for Coding and Reporting go into effect. Understanding these annual updates is crucial. ICD-10 coding accuracy has always been key to submitting clean claims and sharing relevant diagnoses with other healthcare providers to ensure quality of care. However, it has grown even more important since the implementation of the Patient-Driven Payment Model (PDPM) in the Skilled Nursing Facility Prospective Payment System (SNF PPS), which uses ICD-10 codes in MDS items I0020B (ICD Code/Resident’s Primary Medical Condition) and I8000 (Additional Active Diagnoses) to classify residents into case-mix groups—not to mention the ICD-10 codes that risk-adjust certain quality measures in the Skilled Nursing Facility Quality Reporting Program (SNF QRP).

Here’s what nurse assessment coordinators (NACs) and other coders should know to be ready to implement the FY 2021 ICD-10 codes:

COVID-19 guideline revisions

“The biggest change to the Coding Guidelines is that there is a whole section on COVID-19 coding guidelines,” says Sue Bowman, MJ, RHIA, CCS, FAHIMA, senior director of coding and compliance at AHIMA in Chicago. “This section duplicates some of the interim COVID-19 coding guidelines that were released in April. However, it also expands and clarifies some of those interim guidelines.”

Changes to the COVID-19 guidelines from April include the following:

* Presumptive positives. “The April guidelines included a section on how to code presumptive-positive COVID-19 cases,” says Shelly Maffia, MSN, MBA, RN, NHA, QCP, CHC, director of regulatory services for Proactive Medical Review and Consulting in Evansville, IN. “That was not brought forward to the FY 2021 Coding Guidelines. The Centers for Disease Control and Prevention (CDC) no longer requires a second confirmation with a CDC lab test, so the guidance on coding confirmed cases was streamlined to reflect that.”

* Acute respiratory manifestations of COVID-19. “This new section states that when the reason for admission is a respiratory manifestation of COVID-19, coders should assign U07.1 (COVID-19) as the principal diagnosis, and then assign the respiratory manifestations as an additional diagnosis,” says Maffia.

Note: U07.1 coded in MDS item I0020B qualifies a resident for the Pulmonary clinical category under PDPM, according to the FY 2021 PDPM ICD-10 Mappings tool.

The following example excerpted from the revised Coding Guidelines explains how to code pneumonia:

For a pneumonia case confirmed as due to the 2019 novel coronavirus (COVID-19), assign codes:

  • U07.1 (COVID-19), and
  • J12.89 (Other Viral Pneumonia).

In addition, the Coding Guidelines have added acute respiratory failure as another respiratory manifestation that can be coded secondary, points out Maffia. “The list of examples of common respiratory manifestations of COVID-19 now includes pneumonia, acute bronchitis, lower respiratory infection, acute respiratory distress syndrome, and acute respiratory failure.”

Note: The acute respiratory failure codes J96.00, J96.01, and J96.02 coded in MDS item I8000 all count as cardio-respiratory failure and shock, which is worth 1 point in the non-therapy ancillaries (NTA) comorbidity score calculation under PDPM, according to chapter 6 of the Long-Term Care Facility Resident Assessment Instrument 3.0 User’s Manual. These codes, captured in MDS item I0020B when appropriate, also can qualify a resident for the Pulmonary clinical category just like the COVID-19 diagnosis U07.1.

* Non-respiratory manifestations of COVID-19. “This new section also states that when the reason for admission is a non-respiratory manifestation of COVID-19, such as gastrointestinal symptoms, the coder should still code the COVID-19 as the primary diagnosis using U07.1 and then code the non-respiratory manifestation as an additional diagnosis,” says Maffia.

April COVID-19 guidelines that still matter

In addition to the revisions, some guidelines carried forward from the April release are worth reviewing again. Here are the steps NACs and other coders still need to take:

* Code only confirmed COVID-19 cases

“Coders should code only confirmed COVID-19 cases. Documentation of a positive test result—even for asymptomatic residents—is one source of that confirmation, but you don’t always have to have a positive test result,” says Maffia. “You also can code confirmed cases as documented by the physician (or physician extender). If the physician documents that the resident has COVID-19 regardless of test results, that is sufficient to code U07.1 for COVID-19.”

However, physician documentation needs to clearly indicate the presence of COVID-19, says Maffia. “If the physician documents ‘suspected,’ ‘possible,’ ‘probable,’ or ‘inconclusive’ COVID-19, then you would not assign U07.1 for COVID-19. You would only code the signs and symptoms that are reported. So you may need to follow up and query the physician to see if you can obtain a confirmation of COVID-19 to code it as the primary diagnosis if there is no outstanding test that comes back positive.” Note: The updated guidelines refer coders to section I.C.1.g.1.g for information about coding signs and symptoms.

“Testing shortages and other issues can result in a resident not being tested for COVID-19, or sometimes the test result is negative,” adds Bowman. “What you need to remember is that the physician has the last word. If they assess the resident and document, ‘Yes, this resident has COVID-19’ vs. documenting ‘suspected’ or ‘possible’ COVID-19, then that is sufficient to use the U07.1 code for COVID-19. Only confirmed cases should be coded, and in the context of the Coding Guidelines, confirmation doesn’t require documentation of a positive test result.”

* Understand sequencing

“If the resident has a confirmed diagnosis of COVID-19, then the manifestations of COVID-19 come second, except in very limited circumstances,” says Bowman. “For example, if the resident has pneumonia due to COVID-19, COVID-19 is always coded first.” Note: The only exceptions occur when certain codes, such as sepsis or transplant complications, are sequenced first per the requirements of another guideline. For details, see section I.C.1.g.1.b of the Coding Guidelines.

* Learn when—and when not—to code sequelae (late effects)

Some coders get confused about the difference between a manifestation of COVID-19 and a late effect of COVID-19, says Bowman. “The guidelines don’t specifically address the sequelae issue for COVID-19. However, AHIMA and the American Hospital Association (AHA) put out some Frequently Asked Questions (FAQs) that are relevant even though they aren’t all specific to long-term care.” Note: See questions 31 – 35 in “AHIMA and AHA FAQ: ICD-10-CM/PCS Coding for COVID-19” from the Journal of AHIMA.

These FAQs explain that if a resident has a specific condition resulting from COVID-19, such as peroneal palsy, then that would be coded as a sequelae of COVID-19, says Bowman. “In addition to coding the peroneal palsy, you should use the sequalae code B94.8 (Sequalae of Other Specified Infectious and Parasitic Diseases) as a secondary diagnosis,” she explains. “However, if the resident who had COVID-19 just requires deconditioning for generalized debility, you should code the specific symptoms, such as generalized weakness or debility, and then assign code Z86.19 (Personal History of Other Infectious and Parasitic Diseases) as a secondary diagnosis.”

The difference between a real sequalae resulting from the COVID-19 infection and debility or weakness from having been in bed for a long time can be difficult to see, acknowledges Bowman. “The key to coding sequelae is having some specific condition (e.g., a heart condition) that is linked in the physician documentation to COVID-19. If you can’t make that link to COVID-19 and the resident just has debility or weakness due to a prolonged hospitalization or a prolonged ICU stay, then that would not be coded as a sequalae because it was not actually caused by COVID-19.”

Note: B94.8 and Z86.19 are both return-to-provider (RTP) codes for MDS item I0020B for PDPM clinical classification.

* Understand the coding impact of positive vs. negative tests

“If a resident tests positive, that is a confirmed case that should be coded as COVID-19 even if the resident doesn’t have symptoms,” says Bowman. “However, if the test results aren’t known or the test is negative—nor has the physician documented a confirmed diagnosis of COVID-19—then you should code Z20.828 (Contact With and (Suspected) Exposure to Other Viral Communicable Diseases). The Z20.828 code indicates that testing was done, and the results were not positive or were inconclusive or unknown.”

Note: For PDPM clinical classification, Z20.828 is an RTP code for MDS item I0020B.

* Avoid screening codes for now

With widespread testing ramping up in nursing homes, it’s important to know that the Coding Guidelines state that a screening code “is generally not appropriate” for COVID-19 testing during the pandemic, says Bowman. “That may change after the pandemic is over and there is no longer a public health emergency. However, during the pandemic, the assumption is that pretty much everyone may have been exposed because COVID-19 is all around us. So the current guidelines tell coders to use Z20.828 for contact and exposure to the disease instead of a screening code.”

Other FY 2021 guideline updates

Additional changes to review include the following:

* Diabetes treatment coding. In the diabetes mellitus section, both the diabetes and the secondary diabetes guidelines have been updated to address how to code when a resident receives (1) either insulin or an oral hypoglycemic drug, and (2) an injectable noninsulin antidiabetic drug, says Maffia.

“If a resident is treated with both insulin and an injectable noninsulin antidiabetic drug, you should assign Z79.4 (Long-Term (Current) Use of Insulin) and then Z79.899 (Other Long-Term (Current) Drug Therapy) to account for the injectable noninsulin antidiabetic drug,” explains Maffia. “Likewise, if the resident is on both an oral hypoglycemic and an injectable noninsulin antidiabetic drug, you should code Z79.84 (Long-Term (Current) Use of Oral Hypoglycemic Drugs) and then that Z79.899 with it.”

Note: For PDPM clinical classification via MDS item I0020B, Z79.4 and Z79.84 are both RTP codes.

* Social determinants of health. “Patient self-reported documentation will be allowed to be used to assign codes for the social determinants of health, so you won’t have to depend only on physician documentation,” says Maffia. “These are the codes in the Z55 – Z65 categories, and they include social situations such as homelessness, the death of a family member, and addiction in the family.”

Note: Z55 – Z65 are RTP codes for PDPM clinical category classification using MDS item I0020B.

New FY 2021 codes to know

In addition to the revised guidelines, there are changes to the ICD-10 code sets themselves. Key new codes include the following:

* Immunodeficiency status codes. “There are some new codes for immunodeficiency status under D84.8 (Other Specified Immunodeficiencies) that address when residents are immunocompromised due to another condition, due to a drug such as chemotherapy, or due to some environmental cause,” points out Bowman. The following excerpt from the FY 2021 ICD-10-CM Tabular List of Diseases and Injuries highlights the new codes:

D84.8 Other specified immunodeficiencies

D84.81 Immunodeficiency due to conditions classified elsewhere

Code first underlying condition, such as:

  • chromosomal abnormalities (Q90-Q99)
  • diabetes mellitus (E08-E13)
  • malignant neoplasms (C00-C96)


  • certain disorders involving the immune mechanism (D80-D83, D84.0, D84.1, D84.9)
  • human immunodeficiency virus [HIV] disease (B20)

D84.82 Immunodeficiency due to drugs and external causes

D84.821 Immunodeficiency due to drugs


  •  Immunodeficiency due to (current or past) medication
  • Use additional code for adverse effect if applicable, to identify adverse effect of drug (T36-T50 with fifth or six character 5)
  • Use additional code, if applicable, for associated long term (current) drug therapy drug or medication such as:

o long term (current) drug therapy systemic steroids (Z79.52)

o other long term (current) drug therapy (Z79.899)

D84.822 Immunodeficiency due to external causes

  • Code also, if applicable, radiological procedure and radiotherapy (Y84.2)
  • Use additional code for external cause such as:

o exposure to ionizing radiation (W88)

Note: Under PDPM, D84.81 is an RTP code for MDS item I0020B. However, D84.821 and D84.822 both will qualify the resident for the Medical Management clinical category. D84.8 codes in MDS item I8000 also can qualify the resident for 1 point for immune disorders in the NTA comorbidity score calculation.

* Hepatic fibrosis codes. “The revised code set includes new codes in K74.0 (Hepatic Fibrosis) to allow you to identify early and advanced stages of hepatic fibrosis,” says Bowman.

The following excerpt from the Tabular List highlights the new codes:

K74.0 Hepatic fibrosis

Code first underlying liver disease, such as:

  • nonalcoholic steatohepatitis (NASH) (K75.81)

K74.00 Hepatic fibrosis, unspecified

K74.01 Hepatic fibrosis, early fibrosis

  • Hepatic fibrosis, stage F1 or stage F2

K74.02 Hepatic fibrosis, advanced fibrosis

  • Hepatic fibrosis, stage F3
  •  Excludes1:

o cirrhosis of liver (K74.6-)

o hepatic fibrosis, stage F4 (K74.6-)

Note: Under PDPM, all K74.0 codes are RTP for MDS item I0020B.

* Stage 3 chronic kidney disease codes. “Stage 3 chronic kidney disease, which is moderate chronic kidney disease, has been broken out so that you can code stage 3a and stage 3b,” says Bowman.

The following excerpt from the Tabular List highlights the new codes:

N18.3 Chronic kidney disease, stage 3 (moderate)

  • N18.30 Chronic kidney disease, stage 3 unspecified
  • N18.31 Chronic kidney disease, stage 3a
  • N18.32 Chronic kidney disease, stage 3b

Note: All three N18.3 codes captured in MDS item I0020B will qualify a resident for the Medical Management clinical category under PDPM.

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