Avoiding ICD-10 coding snafus

Cracking the Code

Alexander Miller

Dr. Miller, who is in private practice in Yorba Linda, California, represents the American Academy of Dermatology on the AMA-CPT Advisory Committee.

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Now that ICD-10 has been implemented you may be noticing some coding challenges arising from the breadth of diagnosis code choices inherent to ICD-10. Diagnosis coding must either be precisely extracted from the medical record or, when an ICD-9 to ICD-10 crosswalk is used, one should be aware that some ICD-9 codes do not neatly translate into one precise ICD-10 code. Although there are many 1:1 code correlations, there are instances where ICD-10 provides a breadth of diagnostic coding nuances for a given condition, and your biller and/or billing program should be able to distinguish which codes are appropriate and which codes are not only imprecise, but may result in delayed or non-payment from an insurer.

For example, as my office staff was preparing a test sampling of ICD-10 encoded claims to submit to Medicare, my data entry person came across a bill with a diagnosis of psoriasis. Easy, right? ICD-9 had one code for psoriasis. As the billing listed a diagnosis of “psoriasis” with no further characterization, my biller, faced with an array of seven ICD-10 codes for psoriasis, selected L40.9, “Psoriasis, unspecified.” Wrong! The type of psoriasis was perfectly evident to me: psoriasis vulgaris, optimally coded as ICD-10 L40.0 But it was not evident to the person choosing the diagnostic code. Additionally, listing a diagnosis code with an “unspecified” descriptor may lead to a payment denial, particularly from Medicare. In general, one should be careful when billing any ICD-10 diagnostic code with fifth or sixth character 0 or 9 ending, as the .0 or .9 digit indicates an unspecified type of condition that in some cases may not qualify for insurance reimbursement. Furthermore, a careful examination of the patient record will be likely to extract information justifying the selection of a more specific code, such as, in the example above, psoriasis vulgaris (L40.0), or pustular psoriasis (L40.1), or guttate psoriasis (L40.4), or erythrodermic psoriasis (L40.8 “other psoriasis”). [pagebreak]

The following tables list common dermatologic entities lumped under one numerical code in ICD-9 but expanded in ICD-10 to several alphanumeric codes identifying specific entities. The examples that follow the tables address other tricky ICD-10 coding scenarios.


Example 1: You excise an inflamed, ruptured, abscessed cyst that may represent an epidermal inclusion cyst or a pilar cyst. Your office submits a bill to the Medicare contractor in Arizona with ICD-10 diagnoses L72.9 for the unspecified cyst of the skin (follicular cyst of the skin and subcutaneous tissue unspecifed) and Z78.9 (“Other specified health status”).

Answer: Incorrect. Noridian, which is the Medicare Administrative Contractor (MAC) for the Dakotas, Arizona, Utah, and states west, has a Local Coverage Determination (LCD) for “Skin Lesion Removal” that lists, under covered entities, cyst codes except for the unspecified ICD-10 code, L72.9. Therefore, diagnosis L72.9 constitutes a non-covered entity, and no payment would be forthcoming (denied as a non-covered service). If the patient had not signed an Advance Beneficiary Notice (ABN), you would be prohibited from billing the patient for the service. In this case it would be best to either await the histopathology report for a precise cyst diagnosis and ICD-10 code or to code contemporaneously with ICD-10 code L72.8, “other follicular cysts of the skin and subcutaneous tissue,” which is a reimbursable diagnosis code.

Well then, you ask, what about this code Z78.9? What’s that? Prior to ICD-10 specifying a secondary code of “abscess” linked to the primary code for epidermal inclusion cyst would validate a covered service. No more! The Noridian LCD instructs that for a variety of listed conditions coverage will be provided only when certain specified “complications,” such as bleeding, intense itching, pain, or inflammation (including purulence - abscess) are present. Rather than coding for a specified associated condition or symptom, one is instructed to choose ICD-10 Z78.9 to indicate that the medical record verifies that a condition appropriate for coverage exists. This emphasizes an essential billing fact: whoever determines the diagnostic billing code selection must also read and understand the pertinent MAC LCDs.

Example 2: A desmoplastic carcinoma, probably of eccrine origin, is excised from the scalp with two stages of Mohs surgery. You bill CPT 17311 and 17312 for the Mohs excisions and ICD-10 diagnosis C44.49, “Other specified malignant neoplasm of skin of scalp and neck.”

Answer: Correct. As there is no ICD-10 code specifying an eccrine origin carcinoma, the ICD-10 code C44.49 is most appropriate, and is likely to be accepted for coverage by an insurer, including Medicare.

Example 3: You biopsy an eyelid skin lesion on a Medicare patient and list a differential diagnosis of a squamous cell carcinoma versus an irritated seborrheic keratosis clinically mimicking a squamous cell carcinoma. Your biller submits a claim with CPT 11100, biopsy, and ICD-10 C44.101, “unspecified malignant neoplasm of skin of eyelid, including canthus.”

Answer: Incorrect. There are two distinct anomalies with the ICD-10 code submission. First, ICD-10 codes describing an “unspecified” malignant neoplasm are not likely to be reimbursed by insurers, particularly Medicare. Second, laterality (left or right eyelid) is not defined. Whenever there is a coding choice distinguishing laterality the right or left side specific code must be selected in order for the claim to qualify for Medicare payment. In this case the diagnosis is uncertain at the time of the biopsy. Consequently, the best fitting ICD-10 code is D48.5, “neoplasm of uncertain behavior of skin.” ICD-10 D48.5 applies to tumors at any location, as it is not site-specific and laterality neutral. However, if one were to delay the coding until a definitive histopathology diagnosis was reached, then the appropriate malignant or benign ICD-10 code specifying the left or the right eyelid would be chosen.

Example 4: You biopsy a nodular lesion on the mucosal to vermilion aspect of the left lower lip that may represent a mucous cyst or a carcinoma. You code CPT 40490 for the lip biopsy and ICD-10 D48.5, neoplasm of uncertain behavior of skin.

Answer: Incorrect. The CPT coding is appropriate, as CPT 40490 is “biopsy, lip.” One could instead legitimately code CPT 11100, since it is defined as “biopsy of skin, subcutaneous tissue and/or mucous membrane.” However, the more precise CPT 40490 lip biopsy code is preferred. ICD-10 code D48.5 is not descriptively appropriate, however, as it refers to skin. The specific diagnostic code for mucosal aspects of lips is D37.01, “neoplasm of uncertain behavior of lip.” This code is also appropriate for vermilion biopsies. Keep in mind that code D37.01 is intended solely for mucosal lip lesions. Neoplasms of uncertain behavior of the skin of the lip are appropriately coded with ICD-10 D48.5.