MCCG212 - Lecture 3 - Medical Necessity and Diagnosis Selection and Sequencing
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MCCG212 - Lecture 3 - Medical Necessity and Diagnosis Selection and Sequencing
Lesson #1 – ICD-10-CM Codes as They Relate to Medical Necessity
What is Medical Necessity?
According to Medicare, “medically necessary” is defined as “health-care services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine” (CMS, n.d., p. 3). CMS provides this specific definition of medical necessity under the Social Security Act (SSA): “No Medicare payment shall be made for items or services that are not reasonable and necessary for the diagnosis or treatment of illness or injury to improve the functioning of a malformed body member.” Many payers, including Medicare and Medicaid, have medical coverage policies that determine what procedure and diagnosis codes are supported for each diagnostic or surgical procedure. If the diagnosis code is not listed in
the policy, the payer will determine that the procedure is not medically necessary for that condition. Why is it Important? When providers submit claims for reimbursement and payment, the diagnosis and procedure or service codes will paint a clinical picture of the patient’s condition to the payer and justify why a service was performed. The
diagnosis codes drive medical necessity. Medical necessity itself can determine whether or not a claim is reimbursed. If medical necessity is lacking in the documentation, the claim will not be paid, even if the physician deems the treatment necessary. Local Coverage Determination (LCD) & National Coverage Determination (NCD) Medicare covers services that it views as medically necessary to diagnose or treat a patient’s health condition. Services must also meet criteria supplied by national coverage determinations and local coverage determinations. These determinations are decided by the federal government (for the national level) and private Medicare contractors (for the local level), to determine whether Medicare will pay for a specific item or service. NCDs and
LCDs will often provide specific criteria, including the diagnoses that will support medical necessity and provide coverage.
Reimbursement
How does medical necessity impact the provider?
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Initially, medical necessity was created to ensure that providers were reimbursed for the services they provided. Although medical necessity still determines whether or not a provider will be paid, it has much more meaning than initially intended. If a provider is unable to confirm proof of medical necessity for a service provided to a patient, they risk losing reimbursement. This is not to say that a provider must show medical necessity at any cost. Documenting the patient’s actual diagnoses appropriately will ensure medical necessity and subsequent reimbursement if applicable. Failure to establish medical necessity can transfer the financial liability for tests and treatments performed to the provider or healthcare facility. If a provider or patient chooses to appeal a medical necessity denial, the delay can have a significant impact on the financial aspect of the organization. How does medical necessity impact the patient? It is important for the patient to check with their insurance company before services or procedures are performed to confirm that they are a covered benefit. If the patient’s health insurance does not recognize a procedure or service as medically necessary based upon the documented diagnosis, the patient’s only option will be not to have the procedure performed or to pay out of pocket. The patient will not be reimbursed for any medical expenses. An example would be plastic surgery. In some cases, plastic surgery is necessary to improve the health or function of a person’s body and therefore
considered medically necessary. In many cases, if the patient’s condition is not documented completely, it is considered an elective procedure and not covered by insurance. The following are examples of plastic surgery procedures which if documented correctly by the provider, may be covered as medically necessary by payers:
Reconstructive surgery after a disease or injury such as an animal bite or significant burn
Deviated septum - Patients who have a deviated septum may suffer from difficulty breathing, frequent sinus infections, or snoring.
Breast reduction - Breasts that are disproportionate to the patient’s body can cause back, neck, and shoulder pain.
Breast reconstruction - Reconstructive surgery after a mastectomy
Eyelid procedures - Significant eyelid drooping can cause affect a patient’s ability to see. Advanced Beneficiary Notice (ABN)
The Advance Beneficiary Notice of Noncoverage (ABN) is a written notice issued by providers (including independent laboratories, home health agencies, and hospices), physicians, and practitioners to beneficiaries in
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situations where Medicare payment is expected to be denied. The ABN is issued to transfer potential financial liability to the Medicare beneficiary (patient) in certain instances (CMS). The ABN lists the items and services that Medicare isn’t expected to pay for along with the estimate of the costs for the items and services as well as the reasons why Medicare may not provide reimbursement. The ABN therefore helps beneficiaries make informed decision about items and services before they have been provided. The beneficiary has the right to refuse the items or
services that may not be reimbursed by Medicare. If the patient signs the ABN and the procedures and services are not covered, the beneficiary will be
responsible for the full payment. An ABN is not an official denial for coverage by Medicare. Beneficiaries have the right to file an appeal if Medicare denies payment when a claim is submitted. If Medicare denies coverage and the provider did not give the beneficiary an ABN, the provider or supplier may be financially liable for the costs. Clinical Documentation Improvement (CDI)
Clinical documentation improvement is one of the most important elements of patient care. Clinical documentation specialists ensure that provider documentation is complete and accurate. They help to educate physicians on
the importance of documentation that is legible, timely, complete, precise, and clear. Educating Physicians
Physicians are not taught how to complete documentation in order to accurately assign codes. They are also not trained in coding, yet they do know that coding plays an important role in their billing process. It takes a supportive CDI staff to educate them regarding the elements of a complete and compliant health record and how to accurately describe the overall clinical picture of a patient’s condition. Physicians must understand that a diagnosis code should never be altered to
match a diagnosis code listed on the coverage policy as supporting medical necessity. It would be inappropriate and fraudulent to report a diagnosis just because it is on an approved list of conditions that meet medical necessity by the payer. This type of practice will result in fines, penalties, and even criminal prosecution of the provider. Physicians and other qualified healthcare providers must document completely in the medical record. They must document problems addressed, comorbidities that may affect treatment, new issues or concerns related to the presenting condition. Some ways to help educate physicians would be to:
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Explain why clinical documentation improvement is important and describe the overall effect it can have on patient care, compliance, and
reimbursement.
Provide consistency when initiating documentation queries so physicians can know what to expect when additional information is needed.
Provide meaningful data and feedback.
Properly Linking Diagnoses to Procedures The purpose of code linkage is to prove medical necessity and give insurance
companies a reason to pay a medical provider. Code linkage connects a diagnosis code with a procedure code. Lack of linking a diagnosis code to a procedure code or linking these two codes without demonstrating medical necessity will prevent the practice from being reimbursed for those services. Recovery Audit Contractor (RAC) Audits The Medicare Recovery Audit Contractor program started in 2005. It was created as part of the Medicare Integrity Program from the Centers for Medicare and Medicaid Services (CMS). The program’s mission is to identify and correct improper Medicare payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries. It also identifies underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states. The RAC audits also focus on discrepancies such as fraud, duplicative services, wrong coding, and services deemed “not reasonably necessary.” Lesson #1 Completed!
Thank you! You have completed this lesson. Please scroll down to complete a
short, ungraded Knowledge Check activity.
Check Your Knowledge #1
1.
True or False - If the diagnosis code is not listed in the policy, the payer will determine that the procedure is not medically necessary for that condition. Answer: True 2.
True or False - Medical necessity determinations are made on both the local and the national level.
Answer: True
3.
True or False
- It would be appropriate for a physician to provide diagnoses codes to meet medical necessity even if the patient does not have that condition.
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Answer: False - It would not be appropriate for a physician to provide diagnosis codes simply to meet medical necessity. This would be considered fraudulent and could have serious consequences. Lesson #2 - ICD-10-CM Codes as they Relate to Diagnosis Selection
Review of How to Look up an ICD-10-CM Diagnosis Code
Because diagnosis codes play a major role in determining medical necessity, it’s important to follow the appropriate steps to looking up a diagnosis code. Let’s review how to look up an ICD-10-CM diagnosis code utilizing your ICD-
10-CM code book.
After reviewing the provider documentation, consider what the chief complaint is. What conditions are the patient is being treated for? Additionally, review the note for any chronic diseases that may impact the severity of the encounter. Accurately reporting ICD-10-CM codes is a two-
step process. Coders should complete both steps to ensure they are arriving at the correct code and all the appropriate guidelines are followed.
How to search the Alphabetic Index
The Alphabetic Index is divided into two parts: (1) the index to diseases and injury and (2) the index to external cause of injury. The first step is to locate the main term or sub term in the Alphabetic Index, which is listed in alphabetical order by name. It is important to remember that the Alphabetic Index does not always provide the full code, which may include laterality and
seventh characters if applicable. The full code may be found in the Tabular List. Once the correct term and code are located, the coder then refers to that code in the Tabular List. Following up with the Tabular List The Tabular List is organized chronologically in chapters based on body systems. It is a numerical listing of all codes and is divided into 21 chapters. While researching the code in the Tabular List, the coder must verify the highest specificity and review any chapter-related coding guidelines to ensure proper reporting of the patient’s condition. Confirming Diagnosis with Documentation
ICD-10 Official Coding guidelines state that a diagnosis can only be coded if it is specifically documented by the provider in the medical record. It is inappropriate for coders to presume a given condition exists based on symptoms or diagnostic tests alone. As an example, if the patient’s hemoglobin is abnormally low in lab results, the coder may not assign anemia. The coder may query the physician for significance of the abnormal results; however, the physician would need to interpret the results and assign a final diagnosis.
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Specificity
Laterality
Documentation must be specific and complete to ensure the patient’s condition is not questionable. Specificity includes acuity, stage or severity, underlying cause, complications/associated conditions, site, episode of care, and laterality. ICD-10 Official Coding guidelines provide specific guidelines as it relates to reporting laterality. Some ICD-10-CM codes indicate laterality, specifying whether the condition occurs on the left, right, or is bilateral. If no bilateral code is provided and the condition is bilateral, assign separate codes for both the left and right side. If the side is not identified in the medical record, assign the code for the unspecified side.
When a patient has a bilateral condition and each side is treated during separate encounters, assign the “bilateral” code (as the condition still exists on both sides) for the encounter to treat the first side. For the second encounter, for treatment after one side has previously been treated and the condition no longer exists on that side, assign the appropriate unilateral code
for the side where the condition still exists (e.g., cataract surgery performed on each eye in separate encounters). The bilateral code would not be assigned for the subsequent encounter, as the patient no longer has the condition in the previously treated site. If the treatment on the first side did not completely resolve the condition, then the bilateral code would still be appropriate (ICD-10-CM Official Guidelines for Coding and Reporting, I.B.13 Laterality). Initial, Subsequent, Sequela An initial
encounter (character “A”) describes an episode of care where the patient is receiving active treatment for the condition. “Initial encounter” does
not
necessarily mean “initial visit.” A patient may receive active treatment for a condition beyond the initial visit. While the patient may be seen by a new or different provider over the course of treatment for an injury, assignment of the 7th character is based on whether the patient is undergoing active treatment and not whether the provider is seeing the patient for the first time (ICD-10-CM, Chapter 19). Assuming the provider is providing active care, a seventh character of “A” is appropriate, regardless of how many times the provider saw the patient previously.
Example of an initial encounter: Emergency department encounter
A subsequent
encounter (character “D”) describes an episode of care where the patient receives routine care for her or his condition during the healing or recovery phase. It is important to note that ICD-10-CM guidelines do not definitively establish when “active treatment” becomes “routine care.” This is a clinical decision based on the individual’s course of treatment. A rule of thumb is when the doctor sees the patient and develops
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a plan of care, this would be considered active treatment. When the patient is following the plan of care, that would indicate subsequent. If for any reason, the physician needs to adjust the original plan of care or the patient has a setback, the care then becomes active again. Example of a subsequent encounter: Change or removal of a cast
A sequela
encounter (character “S”) is appropriate to use during the recovery phase despite the number of times the provider saw the patient for the problem previously. A sequela character is applied for complications or conditions that arise as a direct result of a condition or injury. Typically reporting of sequela will need two codes. The first would describe the condition or nature of the sequela and the second would describe the sequela or late effect. Example of a sequela encounter: An example of sequela would be a scar that
forms following a burn.
Fracture Coding
ICD-10 coding requires specific and exact documentation when coding orthopedic procedures. Coders who report codes for fractures should be sure
the following details are available in the physician documentation:
Type of fracture – closed, open, displaced, nondisplaced
Specific anatomical site
Laterality
Routine versus delayed healing
Nonunion
Malunion
Type of encounter – initial, subsequent, sequela
CDI specialists should also assist in the knowledge of the Gustilo-Grade Classification system for open fractures in addition to knowing the distinction
in the types of Salter-Harris fractures. Documentation
Active vs. “history of” Active
- Medical conditions can occur suddenly and last a short period of time, such as a few days or weeks. An acute condition should be coded when
present and actively being treated. Medical record documentation needs to support the active/acute condition. History of
- Medical conditions that no longer exists or have resolved should
not be reported as active. History codes are used to explain a patient’s past medical condition that they are no longer receiving active treatment for.
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History of codes is acceptable on any medical record regardless of the reason for the visit.
Diagnostic testing
Diagnostic testing is an essential part of a medical record if performed before, during, or after a patient encounter. According to Official ICD-10-CM Coding Guidelines, for patients receiving diagnostic services only during an encounter/visit, sequence first the diagnosis, condition, problem, or other reason for encounter/visit shown in the medical record to be chiefly responsible for the outpatient services provided during the encounter/visit. Codes for other diagnoses (e.g., chronic conditions) may be sequenced as additional diagnoses. For encounters for routine laboratory/radiology testing in the absence of any signs, symptoms, or associated diagnosis, assign Z01.89, Encounter for other specified special examinations. If routine testing is performed during the same encounter as a test to evaluate a sign, symptom, or diagnosis, it is appropriate to assign both the Z code and the code describing the reason for the non-routine test. For outpatient encounters for diagnostic tests that have been interpreted by a physician, and the final report is available at the time of coding, code any confirmed or definitive diagnosis(es) documented in the interpretation. Do not code related signs and symptoms as additional diagnoses
Medication and Problem Lists The Agency for Healthcare Research and Quality (an agency of the U.S. Department of Health and Human Services) says that there should be a single medication list that is the “one source of truth” for the patient. Medical practices should standardize and simplify the medication reconciliation process in order to make the right thing to do the easiest thing
to do.
Problem lists used within health records are a list of illnesses, injuries, and other factors that affect the health of an individual patient, usually identifying the time of occurrence or identification and resolution. Problem lists play a significant role in the continuity of care for the patient by creating
a consistent and clear picture of patient issues that either need to be addressed or are currently under treatment. Lesson #2 Completed!
Thank you! You have completed this lesson. Please scroll down to complete a
short, ungraded Knowledge Check activity.
Check Your Knowledge #2
1.
True or False - The Tabular List is organized chronologically in chapters based on body systems.
Answer: True
MCCG212 - Lecture 3
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2.
True or False - In some instances, it is appropriate to report signs and symptoms when a definitive diagnosis is present.
Answer: False -
It is never appropriate to report signs and symptoms when a more definitive diagnosis is present.
3.
True or False - Medical conditions that no longer exists or have resolved should not be reported as active.
Answer: True
Lesson #3: ICD-10-CM Codes as they Relate to Sequencing Etiology/Manifestation, Code First & Use Additional Code
Certain conditions have both an underlying etiology and multiple body system manifestations due to the underlying etiology. For such conditions, the ICD10-CM has a coding convention that requires the underlying condition
to be sequenced first, if applicable, followed by the manifestation. Wherever such a combination exists, there is a “use additional code” note at the etiology code, and a “code first” note at the manifestation code. These instructional notes indicate the proper sequencing of the codes, etiology followed by manifestation. In most cases, the manifestation codes will have in the code title, “in diseases classified elsewhere.” Codes with this title are a
component of the etiology/ manifestation convention. The code title indicates
that it is a manifestation code. “In diseases classified elsewhere” codes are never permitted to be used as first listed or principal diagnosis codes. They must be used in conjunction with an underlying condition code, and they must be listed following the ICD-10-CM Official Guidelines for Coding and Reporting FY 2021 Page 11 of 126, underlying condition. Brackets are used in the ICD-10-CM Alphabetic Index to identify manifestation codes in which multiple coding and sequencing rules will apply. Below is an example of what a coder may see when coding conditions in which multiple codes are required to describe the condition.
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ICD-10-Conventions and Guidelines. SlideShare.net
Please review the examples below. Use your code book to determine the correct code sequence.
Example 1:
Mr. Richards has a history of Parkinson’s disease with dementia. When Mr. Richards was admitted to a nursing home, the provider’s order noted progression of dementia. The correct code would be dementia with Parkinsonism which instructs the coder to use additional code
to identify dementia without behavioral disturbance in other diseases as an additional secondary diagnosis. Example 2: Jill, who suffers with anemia has been admitted for a transfusion. Jill’s anemia is documented to be due to end stage renal disease (ESRD). The correct coding for this case would be ESRD as the first-listed diagnosis, followed by anemia. The instructional notes in ICD-10-CM instruct the coder to code first
the underlying chronic kidney disease. Example 3: Chad, who has a history of herpes simplex virus (HSV) has had a flare-up of erythema. Chad’s provider refilled his anti-viral medications and
wants to see him again if he doesn’t improve.
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The correct coding sequence for this case would be HSV (etiology) followed by erythema (manifestation). When the coder references erythema in the tabular, they are instructed to code first
the underlying disease. In this case, the underlying disease is HSV. Lesson #3 Completed!
Thank you! You have completed this lesson. Please scroll down to complete a
short, ungraded Knowledge Check activity.
Check Your Knowledge #3
For the following scenarios, provide the appropriate ICD-10-CM codes. Keep in mind, these are examples of coding directives where each scenario will require more than one code. 1. Code First
Rachel is currently be treated for cancer of her left ovary diagnosed 3 months ago. Lately, Rachel has noticed swelling in her abdomen and shortness of breath. Her oncologist orders a CT which identifies that Rachel has malignant ascites. This result is confirmed by the oncologist and noted in
Rachel’s record. Assign the correct diagnosis codes to this case.
Answer
: The notation in the tabular under R18.0 Malignant ascites directs the coder to code first
the malignancy. The first listed diagnosis would be ovarian cancer C56.2
Malignant neoplasm of unspecified ovary, followed by R18.0
. In this case, the cancer would be the etiology and the ascites would be a manifestation.
2. Code First
After approximately one year of working in a pesticide factory, Ralph was diagnosed with aplastic anemia. Ralph’s physician has documented in his record that the anemia is due to the inappropriate protection from pesticides
in the workplace. Assign the correct diagnosis codes to this case.
Answer
: The correct code would be T60.01XA
as the first listed code for the
toxic effect of pesticide. This is due to the notation in Tabular List under D61.2
Aplastic anemia due to other external agents which directs the coder to code first, if applicable, toxic effects of substances chiefly non-medicinal as to source. 3. Use Additional Code Jonathan, a 38-year-old male, is visiting his primary care physician today for a painful lump at the base of his tongue. After evaluation and diagnostic testing, it is determined that Jonathan has developed a malignancy likely due
to years of chewing tobacco. Jonathan will begin treatment for the malignancy right away. Assign the correct diagnosis codes to this case.
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Answer
: The correct code would be C.01
Malignant Neoplasm at the base of
Tongue as first listed. Notation in the Tabular List directs the coder to use additional code
to specify tobacco-dependence. Secondary code F17.220
Nicotine Dependence, chewing tobacco, uncomplicated, would be added. 4. Use Additional Code
Alice is being seen in the wound care clinic today for an ulcer on her right foot. Alice is a Type 1 diabetic. The provider notes in the medical record a final diagnosis of Type 1 diabetes with ulcer of the heel. Assign the correct diagnosis codes to this case.
Answer
: The correct code would be E10.621
Type I diabetes mellitus with foot ulcer. Notation in Tabular List directs the coder to use additional code
to identify the site of the ulcer. Assign secondary code L97.419
Non-
pressure chronic ulcer of the right heel and midfoot with unspecified severity. 5. In Diseases Classified Elsewhere
Roger has a history of gout. Within the past year, he has had multiple kidney stones. Today, Roger is being seen for pain due to his latest kidney stone. Roger’s provider documents that the recurrent stones are related to the gout
flare-ups that Roger has from time to time. Assign the correct diagnosis codes to this case.
Answer
: The code for calculus of urinary tract in diseases classified elsewhere
N22 directs the coder to code first the underlying disease. In this
case the underlying disease is gout. The correct first listed code would be M10.00
Idiopathic gout, unspecified site, followed by the code N22.
6. In Diseases Classified Elsewhere
The pediatrician’s office is seeing a 1-month-old newborn today who was born with congenital syphilis and is now consequently suffering from hydrocephalus. The provider has documented these conditions in the medical record. Assign the correct diagnosis codes to this case.
Answer
: The notation in the Tabular list directs the coder under G91.4 Hydrocephalus in diseases classified elsewhere,
to code first the underlying condition. In this case, the underlying condition is congenital syphilis. The correct sequence of codes would be A50.09
Other early congenital syphilis, symptomatic, followed by G91.4
. Lecture Recap This lecture discussed
ICD-10-CM Codes as they Relate to Medical Necessity and Diagnosis Selection and Sequencing. Next week we will be reviewing all ICD-10-CM coding guidelines and practicing what we have learned so far!
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References AHIMA. Problem List Guidance in the EHR
. Retrieved September 23, 2021 from https://library.ahima.org/doc?oid=104997#.YVIn930pBPY
Allen, J. (2017, Nov. 6) Why the Medication List in Your Electronic Medical Record is Wrong.
https://hospitalmedicaldirector.com/why-the-
medication-list-in-your-electronic-medical-record-is-wrong/
Bergthold, L. A. (1995) Medical Necessity: Do We Need It?
https://www.healthaffairs.org/doi/10.1377/ hlthaff.14.4.180
California Medical Association (2015, Dec. 1). Coding Corner: “Initial” vs. “subsequent” vs. “sequela” in ICD-10-CM Coding.
https://www.cmadocs.org/newsroom/news/ view/ArticleId/26763/Coding-Corner-Initial-vs-subsequent-vs-sequela-
in-ICD-10-CM-coding
Centers for Medicare & Medicaid Services. Advance Beneficiary Notice of Non-Coverage Interactive Tutorial.
Retrieved September 19, 2021 from
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-
Network-MLN/MLNProducts/ABN-Tutorial/
formCMSR131tutorial111915f.html
Centers for Medicare & Medicaid Services. Glossary of Health Coverage and Medical Terms.
Retrieved September 27, 2021 from https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-
Resources/Downloads/UG-Glossary-508-MM.pdf
Centers for Medicare & Medicaid Services. Medicare Fee for Service Recovery
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Gurrieri, J. J. (2014, Jan. 29). Coding Fractures in ICD-10: The Right Code Means Everything. https://www.icd10monitor.com/coding-fractures-in-
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Health Partners Plans. Best Practices for ICD-10 Coding and Documenting MI and CV.
Retrieved September 19, 2021 from https://www.healthpartnersplans.com/ media/100456818/best-
practices-for-icd-10-coding-and-documenting-mi-and-cva.pdf
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Towers, Adele L. Clinical Documentation Improvement—A Physician Perspective: Insider Tips for getting Physician Participation in CDI Programs. Journal of AHIMA
84, no.7 (July 2013): 34-41. https://library.ahima.org/doc?oid=106669#.YVIp5X0pBPY WellCare. ICD-10-CM Documentation and Coding Best Practices for Medicare Advantage Risk Adjustment September 20, 2021 from https://r.search.yahoo.com/_ylt=AwrDQpeKKVJh83sA4CQPxQt.;_ylu=Y2
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