The logic behind ICD-10

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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We are segueing from 13,000 codes in ICD-9 to 68,000 in ICD-10. Sounds daunting. Well, not really. Dermatology practices will, as with ICD-9, be using only a small, specialty-specific segment of the available codes. Out of that segment we will commonly be employing an even narrower component of codes. So, it’s not so daunting, after all.

To fit the specificity provided by the breadth of new diagnosis codes, will the medical record have to be expanded? Answer: no not really. The medical record commonly will include the details required for precise ICD-10 coding. Information such as causality, laterality (left or right side), and comorbidities is characteristically collected and charted. ICD-10, by virtue of its greater breadth of codes, allows for extraction of extant data for generating more precise coding than ICD-9 allows. So, it’s not more data collection, it’s the extraction of that data that will facilitate proper code identification from the range of ICD-10 codes. Such codes may be identified by your electronic health records system, by assessing electronic ICD-10 data repositories, by searching on the Web for the desired diagnosis code, by consulting the index in the printed ICD-10 code book, or by extrapolating from ICD-9 codes to ICD-10 code choices via crosswalks.

If one’s electronic health record or office management program does not provide for easy identification of appropriate codes it may help to create a list of the most commonly used diagnoses coupled with their corresponding ICD-10 codes for ease of billing reference. These same codes may be integrated into a paper super bill, if one uses such a system.

Although after Oct. 1 one may refer to a crosswalk listing of ICD-9 codes paired with their corresponding ICD-10 codes in order to code appropriately in ICD-10, the question of “why” arises. As ICD-9 codes will be nearly useless starting with dates of service on Oct. 1, why think of them at all after that date? Simply think and code in ICD-10, and purge the ICD-9 mentality once all claims for pre-Oct. 1 services have been submitted, processed, and adjudicated.

There is logic in ICD-10, and knowing the basics of its uniform code structure will facilitate rapid identification of inadvertent coding errors or inadequacies. The first three characters, always starting with a letter, indicate the general condition being treated. (These are also referred to as a category.) A decimal point precedes the next characters in the code sequence. The fourth character specifies the anatomic location, and the fifth, the etiology or type of condition. The sixth character ascribes laterality (left or right), when pertinent, or another feature. The seventh character is uncommonly used in dermatologic diagnoses. It typically would be used to specify an initial, subsequent, or sequela visit relating to an injury, poisoning, or adverse effect. [pagebreak]

The six-character construct is particularly pertinent to the coding of basal cell and squamous cell carcinomas. The table on the following page is an example of the code construction for a squamous cell carcinoma on the left ear.


It is imperative that the most specific tumor and location diagnostic codes be extracted from the medical record. As such, ICD-10 codes indicating “unspecified” tumor locations when more specific descriptive location codes are available should be scrupulously avoided, as such claims may be rejected by payers.

Example 1: You destroy a basal cell carcinoma on an ear, and describe the procedurein your chart notes. The specific tumor location on the left ear is noted in your chart patient diagram. Your billing program or biller extracts an ICD-10 code of C44.211, basal cell carcinoma of skin of unspecified ear and external auricular canal. This code is then billed to Medicare.

Answer: Incorrect. Although the diagnosis line in the chart does not specify the exact ear, a more thorough examination of the record reveals that the tumor was on the left ear. Consequently, ICD-10 code C44.219, specifying the left ear location, should have been billed. This is important for two reasons: preciseness of diagnosis coding and desire for reimbursement. Chart records should be optimized for facilitating easy extraction of crucial coding data.

The Centers for Medicare and Medicaid Services (CMS) has announced that for the first year of ICD-10 implementation (Oct. 1, 2015 until Oct. 1, 2016) Medicare will accept and reimburse claims lacking a specific (such as left or right) location definition as long as the billed code is within the appropriate code category. For the above example, Medicare will reimburse for the billed not-site specific C44.211 code, but only during the first year of ICD-10 implementation. It is assumed by CMS, however, that all billers will strive for coding specificity, that non-specific site coding will be inadvertent, and that it will abate as coding proficiency builds.

Example 2: You biopsy a tumor on the right arm that you suspect may be a basal or squamous cell carcinoma. As you are uncertain of the diagnosis, you code ICD-10 D48.5, neoplasm of uncertain behavior.

Answer: Partially Correct. As the diagnosis is not known at the time of the biopsy, a neoplasm of uncertain behavior diagnosis is acceptable. However, it may be more advantageous and specific to await the diagnostic histopathology report and then to select the appropriate basal cell carcinoma (C44.612) or squamous cell carcinoma (C44.622) code, if that is the ultimate diagnosis.

Example 3: You remove a tumor on the right arm that you are convinced is a basal or squamous cell carcinoma. As you are uncertain of the diagnosis, you code ICD-10 D48.5, neoplasm of uncertain behavior.

Answer: Incorrect. As you are convinced that the tumor is malignant, a more exact code is: C44.602, unspecified malignant neoplasm of skin of right upper limb, including shoulder. However, it may be more advantageous and specific to await the diagnostic histopathology report and then to select the appropriate basal cell carcinoma (C44.612) or squamous cell carcinoma (C44.622) code. If one were biopsying an unknown type of tumor for the purpose of establishing a histologic diagnosis, then coding for ICD-10 D48.5 would be appropriate. [pagebreak]

Example 4: A patient with discoid lupus erythematosus has lesions limited to the right upper eyelid, with loss of eyelashes. Although you notice that ICD-10 codes discoid lupus erythematosus as L93.0, you discover a more specific code, H01.121, discoid lupus erythematosus of right upper eyelid, and you choose this code.

Answer: Correct. Although L93.0 defines discoid lupus erythematosus, NOS (not otherwise specified), one should strive to select the most specific diagnostic code, which is H01.121. Although most inflammatory dermatoses will not have specific location codes, when it comes to eyelids, location codes exist for a variety of lesions, including discoid lupus erythematosus, eczematous and allergic contact dermatitis of the eyelids, and vitiligo. These exacting codes specify both laterality (left or right) and verticality (upper or lower) eyelids, and are found in the H01.121 H01.135 and H02.731- H02-739 code series. When eyelid involvement is incidental to a broader, multifocal eruption one would select a general diagnostic code, such as L93.0 for discoid lupus erythematosus affecting multiple skin sites including an eyelid, or L30.9 for a diffuse eczema also involving an eyelid.

Example 5: You evaluate a patient for any evidence of recurrence or metastasis of a recently excised and irradiated Merkel cell carcinoma. Finding no evidence of tumor, and no other significant lesions, you code ICD-10 diagnosis Z85.828, personal history of other malignant neoplasm of skin.

Answer: Incorrect. ICD-10 provides two specific personal history of cutaneous malignancy codes: Z85.820 for malignant melanoma of skin and Z85.821 for Merkel cell carcinoma. The latter code should have been selected.

Example 6: A guttate psoriasis flare diffusely involves the trunk and extremities of an established patient. Your biller crosswalks the ICD-9 code 696.1 for psoriasis to ICD-10 code L40.0, psoriasis vulgaris, and generates a bill.

Answer: Incorrect. The most specific available ICD-10 code should be selected. Unlike ICD-9, the ICD-10 differentiates between various forms of psoriasis and provides a specific code, L40.4, for guttate psoriasis. Other distinguishing codes are: L40.1, Generalized pustular psoriasis, L40.2, Acrodermatitis continua, and L40.3, Pustulosis palmaris et plantaris.


ICD-9 to ICD-10

In order to promote a comfortable transition from ICD-9 to ICD-10 coding the AAD offers a concise ICD-9-CM to ICD-10-CM Crosswalk for Dermatology, available for purchase through the AAD website. This fold-out manual lists the most commonly used dermatologic codes in their ICD-9 format alongside the appropriate ICD-10 codes.

Initial, subsequent, and sequela coding

For more on how to use initial, subsequent, and sequela coding, see last month’s Cracking the Code column.


Oct. 1, 2015

Oct. 1, 2015, is the deadline to transition to ICD-10. Find resources to help at





ICD-9 to ICD-10
Initial, subsequent, and sequela coding
Oct. 1, 2015