Introduction to diagnostic coding
Diagnostic coding
A diagnosis has many purposes in healthcare. Patient treatment plans are based on the diagnosis. Reimbursement from insurance companies is based, in part, on the diagnosis. Researchers use diagnoses for their studies. Diagnostic coding has been used to standardize the reporting of medical conditions, illnesses, and injuries. It was initially developed to study the causes of mortality. Over time, diagnostic coding has been expanded to include all diseases and conditions. The World Health Organization (WHO) has established the International Classification of Diseases (ICD). This classification system is in its tenth revision and is known as the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM). These codes are used for the following:
- Mortality data
- Epidemiologic data
- Billing purposes
The ICD-10-CM allows providers to be much more specific when assigning diagnostic codes than was possible with previous revisions. This will, in turn, result in more accurate data collection and billing practices. The CDC’s National Center for Health Statistics (NCHS) is responsible for ICD-10-CM, and the Centers for Medicare and Medicaid Services (CMS) is responsible for the procedure code set, ICD-10-PCS. The two agencies co-chair the committee that reviews proposed changes every year, and the updated code sets take effect every October 1.
Additions, revisions, and deletions are made to many of the diagnostic codes, code descriptions, and guidelines. You must always use the current year’s coding manual to ensure accurate coding and comply with regulatory guidelines.
The Health Insurance Portability and Accountability Act (HIPAA) has mandated that specific code sets be used to help standardize the process of claims submission. The ICD-10-CM is the mandated diagnostic code set.
This chapter looks at the structure of the ICD-10-CM codes and how to accurately determine the correct code.
The history of medical coding
Medical coding began as medical classification in 17th century England, when the statistician John Graunt developed a system to study mortality in children under age 6. In the mid-1800s, William Farr and Jacques Bertillon expanded and organized this work into the International List of Causes of Death, published in 1893 and revised every 10 years. After the League of Nations formed in 1920, the list was broadened for use by insurers, hospitals, and other stakeholders and was renamed the International List of Diseases.
In 1946 the International Commission of the World Health Organization (WHO) established codes to define specific infectious diseases, parasites, symptoms, and causes of death. This code set was called the Manual of the International Statistical Classification of Diseases, Injuries, and Causes of Death (ICD).
The WHO approved ICD-10, the international tenth revision, in 1990, and it took effect in member states in 1993. The United States clinical modification, the ICD-10-CM, was subsequently developed by the CDC’s National Center for Health Statistics (NCHS) together with CMS for use in the United States. This code set has a different format from that of the ICD-9-CM. As of October 1, 2015, the ICD-10-CM has been used in the United States.
Medical coding in the United States
As history dictates, the original purpose of medical coding was to collect statistical data. The United States relies heavily on diagnostic coding for health insurance reimbursement, in contrast to that original statistical purpose. Providers are responsible for billing the insurance company for any services rendered during the encounter (i.e., any meeting between a patient and a healthcare provider), and the provider must use approved medical codes for these procedures and services to obtain reimbursement. This means that the provider must supply diagnostic information that demonstrates the need for the rendered procedures or services. The provider assigns a diagnosis through an assessment of the patient.
All components of the encounter (i.e., diagnostic findings, procedures, and services) are used to determine the charges and generate an insurance claim. This chapter focuses on the ways the medical assistant should gather diagnostic information and translate it into a diagnostic code. The ICD-10-CM coding manual is used for this purpose.
What is diagnostic coding?
Diagnostic coding changes written descriptions of diseases, illnesses, or injuries into alphanumeric codes. The ICD-10-CM code set uses up to seven characters to identify the disease or injury; some codes require a seventh character, called an extension, to show information such as whether the encounter is the initial encounter, a subsequent encounter, or a sequela (a late effect) of an injury or condition. Using the ICD-10-CM can help ensure both accurate health record documentation and efficient claims processing.
The ICD-10-CM code set is available through online resources, within the electronic health record (EHR) as an encoder or as a print manual. The print manual is produced by several publishers and may use different layouts, symbols, color coding, and some other features. For the coding manual, however, the format, conventions, tables, appendices, content, and basic structure are the same.
When you use the ICD-10-CM, you will be choosing a standardized alphanumeric code for the diagnostic statement assigned by the provider. Diagnostic statements are found in the following documents:
- Operative reports
- Discharge summaries
- History and physical exam (H&P) reports
- Reports on ancillary diagnostic services (e.g., radiology, pathology, and laboratory reports)
All of these should provide the patient’s diagnosis or diagnoses. Healthcare providers use these reports to code and report clinical information. On an insurance claim, the diagnostic codes are linked to the procedures performed and tell the insurance company why the services or procedures were done. This linking shows whether a procedure or service was medically necessary; if the diagnosis code does not support the services provided, the insurance company will not pay for them. For example, if diabetes mellitus is the diagnosis and the procedure is a throat culture, the insurance company would not pay it, as a throat culture is not medically necessary for the treatment of diabetes mellitus. Practice management software, clearinghouses, and insurance companies recognize these codes, which simplifies the coding process and speeds reimbursement to healthcare providers.