First Listed Diagnosis and Episode of Care

by  Aimee Wilcox, MA, CST, CCS-P, CPMA
October 21st, 2016

Since ICD-10-CM implementation, there has been some confusion and incorrect information disseminated about how the first-listed diagnosis code should be determined for outpatient physical therapy services. To clear up the confusion, the American Physical Therapy Association (APTA) recently reported they had contacted the ICD-10 Cooperating Parties (AHA, AHIMA, CMS, and the CDC), and asked them to clarify how to accurately select the first- listed diagnosis code for outpatient physical therapy. Their response was to simply refer back to the ICD-10-CM Official Coding Guidelines and remark that they wish all providers to code consistently and according to the same set of guidelines. Let's quickly review the biggest issues associated with coding signs and symptoms, sequencing, and episode of care.

Rule 1: (Section I.C.18.a.)

"Codes that describe symptoms and signs are acceptable for reporting purposes when a related definitive diagnosis has not been established (confirmed) by the provider."

If you aren't sure if there is an intervertebral disc disorder caused by the accident until the MRI results get back, go ahead and code the symptoms. Never report a diagnosis code for a condition or injury that the provider has not yet confirmed to be present in the documentation.

Rule 2: (Section I.C.18.b.)

"Codes for signs and symptoms may be reported in addition to a related, definitive diagnosis when the sign or symptom is not routinely associated with that diagnosis, such as the various signs and symptoms associated with complex syndromes. The definitive diagnosis code should be sequenced before the symptoms code. Signs or symptoms that are associated routinely with a disease process should not be assigned as additional codes, unless otherwise instructed by the classification."

This can be difficult for coders if they don't know the commonly associated signs and symptoms of a particular condition, complex, or injury. Talk to providers and ask them to identify signs or symptoms not common to the injury or condition they are treating.

Many injuries are commonly associated with redness, pain, swelling, effusion, inflammation, and stiffness. But if the normal time frame for seeing these symptoms has passed, their presence may indicate another problem. The ability for providers to clearly identify signs and symptoms that should be coded, compared to those inherent to the injury or condition, is important information that needs to be documented.

If, after looking over the documentation, it is noted that the only condition left to code is the original injury code, then it would be correct to do so.

Episode of Care

Most injury codes require a 7th character to identify the episode of care. We all know the drill by now, "A" is for initial encounter (active care), "D" is subsequent encounter (during the healing phase), and "S" is for sequela (after effects of an injury that show up after the patient has healed). Whether you code for a physical therapist or other specialty, the rules apply the same to all. Any special coding guidelines will be found in the Official Coding Guidelines Section for ICD-10-CM.

Claims submitted with the wrong code can be denied, causing delays in payments and additional costs in appeals. To avoid such issues, as they relate to ICD-10- CM code reporting, keep in mind the following guidelines taken directly from Chapter 19 of the Official Coding

Guidelines - 2017 ICD-10-CM:

Initial Encounter (Section I.C.19.1.c)

"Traumatic fractures are coded using the appropriate 7th character for initial encounter for each encounter where the patient is receiving active treatment for the fracture. The appropriate 7th character for initial encounter should also be assigned for a patient who delayed seeking treatment for the fracture or nonunion."

If you are part of the active care for the injury, then report the 7th character "A." An example of this might be for a patient who sustained a lumbar strain, whose primary care ruled out any intervertebral disc disorders and referred him to physical therapy to increase strength and range of motion and reduce stiffness and pain. If active care is provided, the documentation should also state, "Therapy is for active care.".

Subsequent Encounter (Section I.C.19.1.c)

"Fractures are coded using the appropriate 7th character for subsequent care for encounters after the patient has completed active treatment of the fracture and is receiving routine care for the fracture during the healing or recovery phase."

If the patient is receiving treatment, after the active phase of care is completed, this is considered "subsequent care" or care given during the healing phase of the injury. Good examples of this include improving function of a body part after an injury that required surgery. The surgery was the active care and the therapy is the subsequent or healing phase. Once again, be sure the documentation reflects the episode of care properly to support code selection by stating "Subsequent care provided.".

Application of 7th Character (Section I.C.19.1.a)

"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."

Let's try a complex scenario where Jim Hurts injures himself playing baseball and seeks help: Jim sees his primary care doctor (who has been his regular doctor for many years) who evaluates him. The primary care doctor determines Jim needs a specialist's opinion and refers him out. Although he only evaluated him, and didn't offer any treatment, the service is still coded with an "A" for active care.

He sees the first specialist, who also documents "active treatment" but refers him to another specialist for evaluation. (Reports 7th character A). The second specialist sees the patient, determines surgery is needed, and schedules it. (Reports 7th character A).

The second specialist performs the surgery at the hospital. (Reports 7th character A).

The second specialist sees the patient for postoperative dressing change and x-ray and determines physical therapy is needed for improved functionality. (Reports 7th character D).

The patient is seen for the first time by the physical therapist, evaluated, and started on a therapy regimen to improve functionality. (Reports 7th character D).

Aftercare Z Codes

"The aftercare Z codes should not be used for aftercare for conditions such as injuries or poisonings, where 7th characters are provided to identify subsequent care. For example, for aftercare of an injury, assign the acute injury code with the 7th character "D" for subsequent encounter."

A patient who undergoes joint replacement surgery for an osteoarthritic knee would report aftercare using a Z code, while a patient who underwent repair of an ACL tear injury would use the injury code originally used to report the injury along with the 7th character (A, D, or S) to report the aftercare.

Everyone follows the same rules, unless the rules contain something individual to the specialty or location.

As we continue to move forward with ICD-10-CM, auditing will begin to focus more and more on accuracy, following the guidelines, and proving medical necessity through proper ICD-10-CM code reporting. As auditors, it is important to understand how to educate providers and coding staff on proper ICD-10-CM code assignation.

First Listed Diagnosis and Episode of Care. (2016, October 21). Find-A-Code Articles. Retrieved from

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