June 18, 2020
Reducing Denials through Correct Coding
Medicare develops both National and Local Coverage Determinations (NCD and LCD) to set forth coverage parameters for a variety of diagnostic and therapeutic services. Implementation of coverage policy can occur through post-payment review or clinical editing. The latter requires providers to translate the medical record into a series of codes, then placed on a claim for payment.
As part of our responsibility as a Medicare Administrative Contractor (MAC), CGS Administrators continually monitors utilization patterns and claim adjudication in Kentucky and Ohio, the J15 jurisdiction. Our data and our appeals experience indicate that a substantial number of claim denials occurring as a result of clinical editing are due to incorrect coding. Extensive use of unspecified and non-specific codes and lack of coding to specificity among specific codes account for a substantial number of these denials. The impact of these denials is protean. Providers incur interruption in receipts and the administrative and time expense of filing an appeal, while MACs incur the expense of the evaluation and processing appeals. Correct coding of claims upon the first submission will avoid delays in processing of services.
Unspecified and non-specific codes |
"Code also" codes |
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ICD-10-CM, the latest version of the coding set, represents a significant expansion of the number of diagnostic codes, allowing for more specificity in coding. Nevertheless, unspecified codes are still represented in this set. While necessary, they substantially contribute to claim denials for incorrect coding.
ICD-10-CM, among other changes from ICD-9-CM, included the concept of laterality in the code set.
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These codes and code series typically require a second code to adequately describe the condition.
For example; The code Z51.12 [Encounter for antineoplastic immunotherapy] requires a second code, since there are many conditions for which such therapy is medically necessary and many where it is not. A code labeled "code also" does not speak to position on the claim, only that additional code is needed. |
Coding to Specificity |
7th character |
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The ICD-10-CM character set contains codes of 3-7 digits.
Where such codes contain child codes (indented under the parent code), then the additional digit or digits are required if the code is to be considered valid. |
Some of the code sets in ICD-10-CM require a 7th character. A red circle with the number "7" precedes the code and its descriptor. Where the code is less than six characters and requires a seventh, a capital "X" should be used as a placeholder. The seventh character can also contain special notations about the episode of care. For instance, codes in the series S00-T88, require seventh characters. Those characters are:
A frequent coding mistake is to consider a second or subsequent visit for a condition or problem where the patient is still receiving active treatment, to be a subsequent encounter and use the "D" as the seventh character. The "A" seventh character should be used as long as the current episode of care generates encounters for active treatment and the "D" reserved for routine after care. |
Examples of incorrect coding: |
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J2182 Mepolizumab and J45.909 Unspecified asthma, uncomplicated
Heart Failure (ICD-10 code series I50)
7th Character coding
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