BASIC PRINCIPLES OF DIAGNOSIS CODING

Objectives

After completing this chapter, you should be able to:

Demonstrate how to use the diagnosis codebook

Relate basic rules for selecting diagnosis codes and determining code specificity

Relate basic coding conventions for special circumstances

Discuss the role of diagnosis coding in reimbursement

Explain how diagnosis coding is used to establish medical necessity

Discuss strategies for helping physicians meet diagnosis code requirements

Discuss legal responsibilities related to diagnosis coding

Key Terms

alphabetical index

an alphabetical listing of diagnoses, located in Section 1 of Volume 2 of the ICD-9-CM codebook.

alphabetical index to external causes of injury and poisoning

an alphabetical listing of causes and places of injuries and poisoning, located in Section 3 of Volume 2 of the ICD-9-CM codebook, right after the table of drugs and chemicals.

category

three-digit related codes within each section of a chapter in the Volume 1 tabular list of codes in the ICD-9-CM codebook.

chapter

the first major division in the tabular list in Volume 1 of the ICD-9-CM codebook. Chapters represent body systems or types of conditions.

comorbidity

secondary diagnoses and conditions that influence treatment; diagnoses that coexist.

downcoding

a code is chosen for a less severe condition than is recorded in the patient’s medical record, or for a lesser procedure than was actually performed; undercoding.

E-code

an explanatory code that lists the external causes and places of occurrence for injuries and poisonings.

greatest level of specificity

the code with the greatest level of detail that matches the patient’s medical record with the greatest accuracy.

hypertension table

a table to assist with code choices for hypertension; part of the alphabetical index in Section 1 of Volume 2 of the ICD-9-CM codebook.

ICD-9-CM

International Classification of Diseases, Ninth Revision, Clinical Modification; the version of the diagnosis codebook used in the United States for diagnosis coding until the date ICD-10-CM is implemented.

ICD-10-CM

International Classification of Diseases, Tenth Revision, Clinical Modification; the next version of the diagnosis codebook that will be used in the United States. It might be used for diagnosis coding as early as October 2007, but implementation could be delayed until a later year.

main term

the word to look up in an alphabetical index; in ICD-9-CM, a condition, disease, or injury.

morbidity

sickness or statistical incidence of disease.

mortality

death or statistical incidence of death.

neoplasm table

a table to assist with code selection for neoplasms; located in the alphabetical index in Section 1 of Volume 2 of the ICD-9-CM codebook.

pigeonholing

the practice of using a short list of diagnosis codes and using those codes for all patients, regardless of whether the codes match actual diagnoses and conditions.

primary diagnosis

the condition that prompted an outpatient visit or treatment or the underlying cause for a hospital visit.

principal diagnosis

the condition that is found after study to be chiefly responsible for a hospitalization.

RBRVS

resource-based relative value system; the prospective payment system used by Medicare to pay physicians. It considers the CPT code in relation to work, overhead expenses, and malpractice (risk). A geographical adjustment is then made to account for cost-of-living differences throughout the nation.

secondary diagnosis

a diagnosis that contributes to a condition; for an outpatient visit, it may include the underlying cause.

section

related groups of codes within a chapter in the tabular list in Volume 1 of ICD-9-CM; the major divisions within each chapter.

subcategory

the fourth digit in an ICD-9-CM code; further defines the codes within a category in the Volume 1 tabular list of codes.

subclassification

the fifth digit in an ICD-9-CM code; adds more specificity to distinguish between codes within a subcategory in the Volume 1 tabular list of codes.

table of drugs and chemicals

a table to assist with code selections that identify drugs and other chemicals. It is located in Section 2 of Volume 2 in ICD-9-CM, right after the alphabetical index.

tabular list

a numerical list of diagnosis codes presented in a format similar to a table; it is located in Volume 1 of ICD-9-CM and is arranged by body system or types of conditions.

upcoding

a code is chosen for a more severe condition or for a more extensive procedure than is documented in the patient’s medical record; overcoding.

V-code

a supplemental code that describes reasons other than illness for which a person might encounter the health care system; many V-codes cannot be used as a principal or primary diagnosis.

Introduction

The first time diagnoses were used for statistical purposes was in England in the early to mid-1600s when John Graunt, a merchant who sold buttons, needles, and other “notions,” tracked births and deaths in London. Mr. Graunt analyzed the findings with his friend, Dr. William Petty, using theories of probability that until then had only been used in games of chance (gambling). He published the findings in a book called Natural and Political Observations Made Upon Bills of Mortality. At least five editions of his book were published, and the London Bills of Mortality became an ongoing statistical study.

Graunt’s book led to the development of the field of statistics and every method of risk management, including insurance. Other countries were inspired to begin their own studies. The various studies merged over the years and changed names a number of times. An organization called the World Health Organization began to track both morbidity (sickness) and mortality (death) throughout the world. In 1948, the World Health Organization gave the new study its current name, International Classification of Diseases (ICD). The study is published as a book and is revised periodically. Each revision adds a number to the name. ICD-9, the ninth revision, lists three-digit numeric diagnosis codes.

ICD-9-CM is the name of the diagnosis codebook currently used in the United States for diagnosis coding. The name means “International Classification of Diseases, Ninth Revision, Clinical Modification.” The clinical modifications add fourth-digit subcategories and fifth-digit subclassifications used in the United States for (1) detailed billing and (2) detailed statistical studies. With rare exceptions, ICD-9-CM is updated annually. Valid ICD-9-CM codes can have three, four, or five numeric digits.

ICD-9-CM Volumes 1 and 2 are used for physician and provider billing.

ICD-9-CM Volumes 1, 2, and 3 are used for hospital and facility billing.

Since 1950, diagnosis codes have been used by hospitals in the United States to:

Track diseases

Classify procedures

Measure the results of medical research

Evaluate hospital utilization

By the late 1960s to early 1970s, hospitals began to use standardized claim forms, and they began to use computers to send claims electronically. Diagnosis codes were used instead of words on electronic claims to save space because computers in those days had very limited memories.

In 1981, the first medical claim clearinghouses were formed to enable individual physicians to send claims electronically. Once again, diagnosis codes were used instead of words on electronic claims to save space on computers.

Today, hospitals and individual physicians use diagnosis codes to:

Establish medical necessity for each treatment, procedure, and service

Document the complexity of medical decision-making for each encounter

Evaluate the results of specific treatments for specific conditions and diseases

Evaluate all health care utilization

Medical coding becomes more complex every year, and physicians seldom know enough about current medical coding rules to correctly code their own services. Therefore medical coding has become a distinct specialty in the medical office.

Since 1988, physicians’ offices have been required to use diagnosis codes for billing purposes. The diagnoses must be coded to the greatest level of specificity, and they must match chart documentation. Certified coders have passed a certification examination and are qualified to convert chart documentation into diagnosis codes so physicians do not have to learn every coding guideline and do not have to learn the semiannual updates to the codebooks.

Diagnosis coding is a complex subject that cannot be covered in detail in one chapter. The information presented in this chapter is an introduction to diagnosis coding and a broad overview of the most important diagnosis coding guidelines. It is not as comprehensive as the information presented in a medical coding course. Specialty-specific coding rules are not addressed.

The purpose of this chapter is to: (1) introduce the diagnosis codebook used for physician and provider billing, ICD-9-CM Volumes 1 and 2, (2) introduce the diagnosis codebook used for hospital and facility billing, ICD-9-CM Volumes 1, 2, and 3, and (3) lay the foundation for diagnosis coding. When you finish this course, you will be able to:

Use an ICD-9-CM codebook to find diagnosis codes

Match the specificity of diagnosis codes to documentation in patient medical records

Apply the correct diagnosis code order for the most common situations, including common “special circumstances”

Recognize when something is obviously wrong with the diagnosis codes you are given to place on a medical claim form

For example: You will know something is obviously wrong when:

The code for a given diagnosis requires a second code, but you cannot find documentation in the medical record to support the second code

A chronic condition is listed before an acute condition

An injury is diagnosed, but there is no explanation of how or where the injury occurred

The compliance guidance documents issued by the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) strongly recommend that job descriptions be used to assign accountability for specific tasks in the medical office. The OIG developed the compliance guidance documents to help various types of medical entities meet the accountability requirements of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191) (HIPAA). Many of the OIG’s recommendations relate directly to billing and collections, including assigning responsibility for gathering the information for the billing and coding of medical claims. The Medicare website for medical office education, which is now sponsored by numerous government agencies, www.cms.hhs.gov/medlearn/cbts.as, notes how accountability is typically assigned in a medical office, and that information provided the basis when accountability is addressed in this chapter. However, please remember that each medical office decides exactly which employee positions are assigned individual accountability for each task, and it will vary from one office to another. In addition, in a small medical office, one multiskilled professional often fills numerous employee positions.

Typically, medical billers are held accountable for the codes submitted on medical claims unless the responsibility for medical coding is clearly assigned to someone else, such as a certified professional coder (CPC, CPC-H) or a certified coding specialist (CCS, CCS-P). If the medical office you work for does not have a certified coding employee, you should consider completing a medical coding course before accepting this responsibility.

You will need a current year ICD-9-CM codebook, Volumes 1, 2, and 3, for this chapter. Open your ICD-9-CM codebook and find each item as we discuss it.

Professional edition codebooks are a little more expensive, but they contain many useful features that make coding easier.

STOP & REVIEW

Answer the following questions:

1. What codebook is currently used in the United States for diagnosis coding?

______________________

2. Where do you turn first when locating a diagnosis code?

______________________

3. What is the second step when locating a diagnosis code?

______________________

4. Once you have located the code in the alphabetical index in Volume 2, you are done. You can use that code.

______True ______ False

5. If you look up a code and find that the exact diagnosis you are coding is listed under “excludes,” what is your next step?

______________________

Find the diagnosis codes for the following:

6. Obstruction of intestine due to gallstones.

______________________

7. Acute respiratory distress in an adult.

______________________

8. Third-degree AV block.

______________________

9. Osteoarthritis left hip.

______________________

10. Intractable migraine headache with an aura.

______________________

Basic ICD-9-CM Coding

GUIDELINES

Diagnosis codes are used to portray why the patient requires medical services and to indicate the severity of the condition and the amount of work required.

The official diagnosis coding guidelines are found in the ICD-9-CM codebook just before the main index in Volume 2. Please remember that the official coding guidelines can and often do change from year to year. The official guidelines may have changed since this text was written. Current-year coding guidelines always take precedence; so any time there is a discrepancy with the information in this textbook, please follow the guidelines.

A specific code order is used to convey diagnosis information in a standard format. The “general” coding guidelines tell the usual code order. The “chapter-specific” guidelines, the “inpatient” guidelines, and the “outpatient” guidelines describe special circumstances that alter the standard code order or that alter the standard rules for billing and reporting medical services.

PRINCIPAL DIAGNOSIS

The principal diagnosis is the condition that, after study, is found to be the main reason for a hospitalization. The principal diagnosis is listed first for inpatient coding. It is often, but not always, the same as the primary diagnosis.

Remember, italicized codes in the tabular list and codes in slanted brackets in the alphabetical index may not be listed as principal diagnoses and must be listed in the order specified.

PRIMARY DIAGNOSIS

Inpatient

The primary diagnosis is the underlying cause for a hospitalization. Sometimes the primary diagnosis is the same as the principal diagnosis. However, the principal diagnosis and the primary diagnosis are not always the same. Many times a chronic condition is the primary diagnosis, or underlying cause, for an acute condition that prompted the hospitalization. When they are different, the principal diagnosis is listed first and the primary diagnosis is listed second unless the coding guidelines or the codebook instructions direct you to a different code order.

For example:

If a patient with chronic asthma is seen for an acute asthma attack, the acute asthma is the principal diagnosis and the chronic asthma is the primary diagnosis.

If a patient with cerebral palsy is seen for problems related to a muscle contracture, the problem related to the muscle contracture is the principal diagnosis and the cerebral palsy is the primary diagnosis.

If a patient with type 2 diabetes is admitted because home tests show sugar in the urine, glycosuria is the reason for the admission and type 2 diabetes is the underlying cause. However, the codebook specifies: code first the underlying cause, the diabetes. Remember, anytime the codebook specifies the order in which two codes are to be listed, you must list them in that order. Therefore diabetes becomes the principal diagnosis for this admission.

Outpatient

For outpatient services, the primary diagnosis is the main reason for the service(s). There is no principal diagnosis for outpatient services. When there is an underlying cause for an outpatient service, it is listed directly after the primary diagnosis unless the coding guidelines or the codebook instructions direct you to a different code order. For outpatients, when a definitive diagnosis has not yet been established, you code the presenting symptoms.

The official coding guidelines for outpatient services do not use the term “primary diagnosis.” Instead, they simply refer to the “first-listed” diagnosis for each circumstance.

CODE LINKING

Only the physician claim form uses the concept of code linkage. In Chapter 4, you learned to use code linkage in block No. 24E of the CMS-1500 claim form to identify the main reason, or primary diagnosis, for performing a specific procedure. The field links the procedure on that line to a specific diagnosis from the choices in block No. 21. Many payors use this field to establish medical necessity for the service listed on this line.

Sometimes the diagnosis coding conventions directed you to list another diagnosis first in block No. 21, yet the primary diagnosis for each service in block No. 24 is clearly established by linking each service in block No. 24 to a line number from block No. 21 that represents the primary reason for that specific service. Each service is individually linked to the best diagnosis for that service.

The UB-92 claim form, used for reporting the hospital’s charges, identifies the principal diagnosis by providing a separate field for it, FL 67. The principal diagnosis applies to the entire hospitalization and is not tied to individual services.

Fnding Information in ICD-9-CM, Volumes 1 and 2

Most ICD-9-CM codebooks publish Volume 2, the Alphabetical Index to Diseases, at the beginning of the book, followed by Volume 1, the Tabular List of Diagnosis Codes. The proper way to use the ICD-9-CM codebook is to look up the diagnosis first in the alphabetical index before proceeding to the tabular list, so placing Volume 2 first makes sense.

Volume 2 of ICD-9-CM begins with Section 1, an alphabetical index to diseases. A hypertension table and a neoplasm table are included in Section 1, the alphabetical index. These tables allow a quick comparison of available codes, listing some of the criteria that cause similar diagnoses to have different code numbers. Hypertension is the medical term for high blood pressure. It is not just one elevated blood pressure reading; it is an actual disease process. A neoplasm is an abnormal growth or tumor. A benign neoplasm is not cancer; a malignant neoplasm is cancer.

A table of drugs and chemicals follows the alphabetical index and is called Section 2 of Volume 2. The last item in Volume 2 is Section 3, an alphabetical index to external causes of injury and poisoning (an index to E-codes).

Volume 1 of ICD-9-CM is a tabular list of diagnosis codes. The tabular list is organized numerically. Chapters represent body systems or types of conditions. Sections are related groups of topics within each chapter. Categories are single topics and are represented by three-digit codes within each section. Fourth-digit subcategory codes and fifth-digit subclassification codes add more specificity and give more information to differentiate the diagnoses included within that topic. Valid ICD-9-CM codes can have three, four, or five numeric digits.

V-codes and E-codes are valid ICD-9-CM codes that are listed in supplements to the Volume 1 tabular list. They begin with a single alpha digit (V or E) followed by two, three, or four numeric digits. They do not represent active diseases. V-codes describe other reasons for medical encounters, and E-codes describe the “how” and “where” for injuries and poisonings.

In the Volume 1 tabular list, chapters flow into one another seamlessly with new chapters sometimes starting in the middle of a page or column. The professional and expert versions of the codebook start new chapters on a separate page, and color-code the edges of the page, with each chapter a separate color. Although a number series that starts in one chapter may end in another chapter, the sections and the lower subdivisions of each section are wholly contained within a chapter.

Appendices are listed at the back of Volume 1 as follows: Appendix A–Morphology of Neoplasms (a rating scale for a scientific study of changes in neoplasms); Appendix B was deleted in 2005. Appendix B was a glossary of mental disorders that helped mental health providers convert mental health diagnoses from the criteria in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-IV) into billable ICD-9-CM codes; Appendix C–Classifications of Drugs (ICD-9-CM equivalents of American Hospital Formulary Services List Numbers); Appendix D–Classification of Industrial Accidents According to Agency; and Appendix E–List of Three-Digit Categories. Some codebook publishers provide other appendices as a unique feature for their codebook.

FINDING CODES

To find the numerical code for a diagnosis, begin by looking up the main term for the condition, disease, or injury in the alphabetical index or the related tables. A small sampling of valid main terms is listed in Box 5-1.

Box 5-1 Examples of Main Terms

ICD-9-CM is not a user-friendly book. Many diagnoses include anatomical terms that identify the involved body parts, yet you can seldom locate a diagnosis code by looking up the anatomical term(s). In ICD-9-CM, anatomical terms are usually used as subterms listed under a main term that identifies the condition, disease, or injury. Note: Many anatomical terms are listed as a “main term” in the alphabetical index as a courtesy, but the listing usually gives directions to look up the condition rather than providing useful information.

For example:

To find “knee pain,” look up the condition “pain” as a main term, the anatomical subterm “joint,” and the more specific anatomical subterm “knee.”

To find eye injury, look up the condition “injury” as a main term, and the anatomical subterm “eye.”

To find fractured femur, look up the condition “fracture” as a main term, the anatomical subterm “femur,” and then determine whether any of the additional subterms apply.

Sometimes none of the words in the diagnosis is found in the alphabetical index. When this happens, try dividing the diagnosis into word parts. Use the word parts to determine the main term, especially word parts that identify a condition, disease, or injury.

For example: Try to look up “tibial spur.” You will not find a main term “tibial” and you will not find a subterm “tibial” under the main term “spur.” If you divide the word “tibial,” you will find that it means pertaining to the tibia bone. “Bone” is a subterm under the main term “spur.” A tibial spur is a bone spur located on the tibia. Then go to the tabular list to confirm the code for a bone spur on the tibia.

When dividing the diagnosis into word parts is not helpful, look up the diagnosis in a good quality medical dictionary. Use the definition to locate a main term (usually a condition, disease, or injury) and any relevant subterms.

For example: “Patella alta” cannot be found as a main term under either “patella” or “alta,” and neither of these words can be divided into word parts. “Patella” means kneecap and “alta” means high. When you look up “patella alta” in a medical dictionary, you find that it is a condition in which the patellar tendon is too tight or contracted, and as a result, the kneecap is positioned higher than it should be. Look up the main term “tight” or the main term “contracted” and find the subterm “tendon.” Both main terms lead you to the same code in the tabular list. Next, go to the tabular list to confirm that the definition of the code for a tight or contracted tendon is the best match for the medical dictionary’s definition of patella alta.

Many times the alphabetical index does not list the fourth and fifth digit requirements for a code, and the alphabetical index never records the code definitions, notes, and the “includes” and “excludes” items that apply to each code. Codes placed on a claim form must match chart documentation closely. Therefore, each code must be confirmed in the tabular list.

After locating the main term and the subterm(s) of choice in the alphabetical index, go to the tabular list and find the code number. Read the code definition, the notes, and the “includes” and “excludes” items. The notes listed at the beginning of a chapter, section, category, or subcategory apply to all the codes in that chapter, section, category, and/or subcategory.

For example: Turn to ICD-9-CM code category 240 in the Volume 1 tabular list—the beginning of Chapter 3 in your ICD-9-CM codebook. Chapter 3, Endocrine, Nutritional and Metabolic, and Immunity Disorders (240-279), has notes and “excludes” items that apply to the entire chapter. In this instance, there are no section notes for the first section, Disorders of the Thyroid Gland (240-246), but category 242, Thyrotoxicosis with or without goiter (located in the first section) has fifth-digit subclassification requirements, notes, and “excludes” items that apply just to category 242. Each subcategory under 242 lists fourth-digit definitions. When you look up code 242.8, Thyrotoxicosis of other specified origin, there is a note that all applies just to this subcategory. Yet, the notes and the “excludes” items at the beginning of the chapter, the notes and “excludes” items at the beginning of the category, the subcategory notes, and the fifth-digit subclassification requirements, listed at the beginning of the three-digit category must all be considered. Code 242.8 is an incomplete code. A fifth digit must be applied, and all the requirements must be met, or the code cannot be used.

Be sure to read all the “includes” and “excludes” notes. “Includes” notes are a list of examples of specific diagnoses that are valid for that code. Unless a more specific code is a better match, only one diagnosis in the list needs to match your documentation to use the code. However, if even one item on the “excludes” list also matches the documentation, you may not use the code. When an item is excluded, most codebooks list a code or a range of codes to direct you to a better code choice.

Fourth and fifth digits, when available, are not optional. However, you may not add a zero (0) or zeros to create a four- or five-digit code if none exists. There are approximately 100 valid three-digit codes and there are many valid four-digit codes. The only time a zero may be used as a filler is when a fifth digit is required on a code that does not have a fourth digit. Zero is then used for the fourth digit. However, this rarely occurs. Double-check to be sure there really is no fourth digit.

In addition, you need to review the official coding guidelines for the chapter, if any. The official guidelines are usually located just before the alphabetical index in section 1 of Volume 2. The punctuation and abbreviations in the ICD-9-CM codebook are called coding conventions and are very important (Box 5-2). Coding conventions are included at the beginning of the official coding guidelines. For the example listed above, chapter 3 did not have any chapter-specific coding guidelines, but the general coding guidelines do apply.

Box 5-2 ICD-9-CM Punctuation and Abbreviations