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January 24, 2013

Rule-out Diagnosis Codes

The term rule-out is commonly used in patient care to eliminate a suspected condition or disease. While this term works well for clinicians and supports many medical and legal requirements, rule-out diagnoses are not acceptable as primary diagnoses on Medicare claims. For Medicare purposes, claims must be submitted with one or more ICD-9-CM diagnosis codes and must be coded to the highest level of specificity. In the context of ICD-9-CM coding, the "highest degree of specificity" means assigning the most precise ICD-9-CM code that fully explains the narrative description of the symptom or diagnosis.

  • Concerning level of specificity, ICD-9-CM codes may have 3, 4, or 5 digits.
  • If a 3-digit code has associated 4-digit codes, then the 3-digit code is not acceptable for claim submission.
  • If a 4-digit code has associated 5-digit codes, then the 4-digit code is not acceptable for claim submission.

You may report the full ICD-9-CM code for up to eight coexisting diagnoses. For instance, if the patient is seen in the office for evaluation of hypertension and the medical record also documents diabetes, report diabetes as another (secondary) diagnosis.

Rules for reporting diagnosis codes on Medicare claims:

  • Use the ICD-9-CM code that describes the patient's diagnosis, symptom, complaint, condition or problem. Do not code suspected diagnoses.
  • Use the ICD-9-CM code that is the primary reason for the item or service provided.
  • Assign codes to the highest level of specificity. Use the fourth and fifth digits where applicable.
  • Code chronic conditions as often as applicable to the patient's treatment.
  • Code all documented conditions that coexist at the time of the visit that require or affect patient care or treatment. (Do not code conditions that no longer exist.)
  • Claims submitted to CGS on the CMS-1500 form or its electronic equivalent must have a diagnosis code to identify the patient's diagnosis/condition (item 21).
  • Effective for claims received on or after April 1, 2013, "E-codes" may not be submitted as primary diagnoses.
  • For diagnostic laboratory services provided by independent diagnostic clinical laboratories, report the ICD-9-CM code furnished by the ordering physician or practitioner in accordance with the above instructions regarding highest level of specificity. If the ordering provider does not supply a specific ICD-9 code, use the narrative diagnosis supplied in the order to select the appropriate, specific ICD-9 code.
  • Valid ICD-9-CM diagnosis codes are required on electronic claims for ambulance services.
  • Medicare follows the ICD-9-CM Coding Guidelines for Outpatient Services (hospital-based and those provided in physician offices). These guidelines 'instruct physicians to report diagnoses based on test results, if available (reference: CMS Medicare Claims Processing Manual (Pub.100-04), chapter 23, section 10.1). The following table provides more information on diagnosis coding based on test results.

Coding Diagnoses Based on Test Results

Situation Primary Diagnosis
Other Notes

Physician confirms diagnosis based on test results

Confirmed diagnosis

May code signs/symptoms as additional diagnoses, if not explained by the test

Diagnostic test is normal or did not provide results and referring physician noted signs/ symptoms

Use signs or symptoms that prompted treating physician to order test


Test results are normal or non-diagnostic and referring physician provided a "rule-out" or uncertain diagnosis

Use signs or symptoms that prompted treating physician to order test

Do not code the "rule-out" diagnosis


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