2024 ICD-10-CM Official Coding Guidelines For Hospitals & Labs

Medical labs are the fundamental aspects of the healthcare industry assisting in the decision-making of 70% of medical treatments with their useful diagnostic insights. Just like any other healthcare practice, healthcare labs should focus on the billing aspects of their practice to maintain a streamlined revenue flow across their business. 

For this purpose, medical labs should stay compliant with the latest medical codes and billing trends to optimize the workflow of their lab billing services. The Centers for Medicare & Medicaid Services (CMS) & the National Center for Health Statistics (NCHS), and the other 2 departments within the U.S. Federal Government’s Department of Health & Human Services (DHHS) provided the following guidelines for coding and reporting using the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) on October 1, 2023 that will become effective as of September 30, 2024. 

Lab billing specialists should use these guidelines as a reference document to the official version of the ICD-10-CM as published by the United States to classify diagnoses and reasons for visits in all laboratories. 

The ICD-10-CM depends upon the ICD-10 codes which is the statistical classification of disease published by the World Health Organization (WHO). FYI, 4 organizations that are responsible to make up the Cooperating Parties for the ICD-10-CM have approved these lab coding guidelines for 2024 are as follows; 

  • American Hospital Association (AHA)
  • American Health
  • Information Management Association (AHIMA)
  • CMS, and NCHS.

Although, these guidelines are generally applicable to all healthcare settings. However, healthcare labs mostly use ICD codes along with CPT codes. Therefore, lab owners & pathologists should pay more attention to these guidelines than their counterpractitioners.  

A. Conventions for the ICD-10-CM

The conventions for the ICD-10-CM are the general rules for the use of the classification regardless of the guidelines. The conventions are mentioned in the guidelines along with the Alphabetic Index and Tabular List of the ICD-10-CM as instructional notes; 

1. The Alphabetic Index and Tabular List

The ICD-10-CM is categorized into the Alphabetic Index, an alphabetic list of terms and their corresponding code, and the Tabular list, a structural list of codes which is further divided into chapters according to the body system or condition. You can find the complete Tabular list of the latest ICD-10-CM codes on the official website of www.cms.gov

Following are the parts of the Alphabetic Index; 

  • Index of Diseases and Injury
  • Index of External Causes of Injury
  • Table of Neoplasms
  • Table of Drugs and Chemicals

2. Format and Structure:

The ICD-10-CM Tabular List contains categories, subcategories & medical codes. A character is identified as a letter or a number for categories, subcategories, and codes. All categories are referred to as 3 characters. 

A three-character category without any subdivision is referred to as a medical code. Subcategories are identified with either 4 or 5 characters. Medical codes may have 3, 4, 5, 6, or 7 characters.  

It means that each level of subdivision after a category is equivalent to a subcategory. 

The final level of subdivision if a medical code. Medical codes that have applicable 7th characters are still identified as codes but not subcategories. 

A medical code without applicable 7th characters is invalid without the 7th character. The ICD-10-CM uses an indented format to make the reference procedure more comprehensible. 

Finally, a medical code is the last level of subdivision. Codes that have applicable 7th characters aren’t identified as subcategories but as medical codes. A medical code that has an applicable 7th character is identified as an invalid code with the 7th character. 

3. Use of codes for reporting purposes:

Only medical codes are used for reporting purposes but not categories and subcategories. However, it is the primary requirement that only those medical codes are permissible for reporting/ billing that have applicable 7th character. 

4. Placeholder character

The ICD-10-CM coding system uses a placeholder character “X”. This placeholder character “X” is used as a placeholder at certain codes to allow for future expansion. For example, at the positioning, adverse effect, and underdosing codes, categories T36-T50.

Where a placeholder exists, the “X” character must be used to make a medical code valid for reporting & billing. 

5. 7th Characters

Definitely ICD-10-CM categories must be used along with the applicable 7th character. The applicable 7th character is required for all codes within the category, or as the notes in the Tabular List instruct. 

The 7th character must always be mentioned as the character in the data field. If a medical code that requires a 7th character is not 6 characters then it is not 6 characters then it is required to use a placeholder character “X” 

Definitely ICD-10-CM categories must be used with applicable 7th character. The applicable 7th character is required for all codes within the category, or as the notes in the Tabular List instruct. The 7th character must always be mentioned as the 7th character in the data field. If a code that requires a 7th character is not 6 characters then it is required to use a placeholder character “X” to fill in the empty characters. 

6. Abbreviations

a. Alphabetic Index abbreviations

  • NEC “Not elsewhere classifiable”

This abbreviation in the Alphabetic Index represents “other specified”. When a specific code is not available for a particular condition then the Alphabetic Index is used to direct the medical coder to the “other specified” code in the Tabular List. 

  • NOS “Not otherwise specified”

This abbreviation is used to represent unspecified codes. 

b. Tabular List abbreviations

  • NEC “Not elsewhere classifiable”

This abbreviation in the Tabular List represents “other specified”. When a specific code isn’t available for a particular condition then the Tabular List includes an NEC entry under a code to identify the code as the “other specified” code. 

  • NOS “Not otherwise specified”

This abbreviation is the equivalent of unspecified. 

7. Punctuation

  • [ ] Brackets are present in the Tabular List to enclose synonyms, alternative wording or explanatory phrases. Brackets are used in the Alphabetic Index to highlight manifestation codes. 
  • ( ) Parentheses are used in the Alphabetic Index and Tabular List. It is used to enclose supplementary words that is either present or absent in the statement of a disease or procedure without affecting the code number to which it is assigned. 
  • : Colons are used in the Tabular List along with an incomplete term which needs one or more of the modifiers following the colon to make it assignable to a given category. 

8. Other and Unspecified codes

a. “Other” codes
Medical codes that are titled “other” or “other specified” are for use when the information in the medical record provides details for which a specific code doesn’t exist. 

Alphabetic Index entries with NEC in the line assign “other” codes in the Tabular List. These Alphabetic Index entries represent some particular disease entities for which no specific code is used so the term is included within an “other” code. 

b. “Unspecified” codes
Codes titled “unspecified” are used when the information in the medical record isn’t enough to assign a more specific code. The “other specified” code may represent those categories for which an unspecified code is not provided as well as other codes. 

9. Includes Notes

This note is used to further define a three-character code title or give examples of the content of the category. It appears right under a three-character code title. 

10. Inclusion terms

Some codes contain a list of items. These terms describe the conditions for the utility of codes. The terms may be synonyms of the code title or in the case of “other specified” codes. The terms represent a list of the various conditions assigned to that code. The inclusion terms may or may not necessarily be exhaustive. Additional terms available in the Alphabetic index may also be assigned to a code. 

11. Excludes Notes

The ICD-10-CM codes have 2 types of excluded notes. Each type of note has a different definition for use, but they are all similar in that they identify that codes excluded from each other are also independent of each other. 

a. Excludes1
A type 1 Excludes note is a mere excludes note. It means “NOT CODED HERE!” An Excludes1 note indicates that the code excluded should never be used along with the code above the Excludes1 note. 

An Excludes1 is used when 2 conditions can’t occur simultaneously, such as a congenital form vs an acquired form of the same condition. An exception to the Excludes1 definition is the circumstance when the two conditions involving an Excludes1 note are related or not, query the provider. 

For example, code F45.8, Other somatoform disorders, has an Excludes1 note for “sleep-related teeth grinding (G47.63),” because “teeth grinding” is an inclusion term under F45.8. 

Therefore, only one of these codes is applied for teeth grinding. However, psychogenic dysmenorrhea is also an inclusion term under F45.8, and a patient could come up with both these conditions and sleep-related teeth grinding. In such a case, the two conditions are unrelated to each other, therefore, it would be appropriate to report F45.8 and G47.63 together. 

b. Excludes2
A type 2 Excludes note represents “Not included here.” An excludes2 note indicates that the condition excluded is not part of the condition represented by the code, but a patient may have both conditions at the same time. When an Excludes2 note appears under a code, it is acceptable to use both the code and the excluded code together, when appropriate.

B. General Coding Guidelines

1. Locating a code in the ICD-10-CM

To select a code in the classification that represents a diagnosis or reason for a visit documented in a medical record, first locate the term in the Alphabetic Index then verify the code in the Tabular List. 

Medical coders should read and get guidance from instructional notations that are present in both the Alphabetic Index and the Tabular List. It is necessary to use both the Alphabetic Index and Tabular List when locating and applying a medical code. 

The Alphabetic Index doesn’t always provide the full code. Selecting of the full code, including laterality and any applicable 7th character can only be done in the Tabular List. 

A dash (-) at the end of an Alphabetic Index entry represents that additional characters are required. Even if a dash isn’t included at the Alphabetic Index entry, it is essential to refer to the Tabular List to verify that no 7th character is required along with the code. 

2. Level of Detail in Coding

Diagnosis codes are used and reported at their highest number of characters available and to the highest level of specificity documented in the medical record. ICD-10-CM diagnosis codes are made up of codes with 3,4,5,6 or 7 characters. 

Medical codes with three characters are included in ICD-10-CM as the heading of a category of codes that may be further subdivided by the use of 4th, 5th characters

and/or  6th characters which provide more details. 

A three-character code is used only if it is not further subdivided. A code is considered invalid if it has not been coded to the full number of characters required for that code including the 7th character, if applicable. 

3. Code or codes from A00.0 through T88.9, Z00-Z99.8, U00-U85

The appropriate code or codes from A00.0 through T88.9, Z00-Z99.8, and U00-U85

are used to indicate diagnoses, symptoms, conditions, problems, compliants or other reason(s) for the patient-physician encounter/ visit. 

4. Signs and symptoms

Contrary to diagnoses, medical codes that describe symptoms and signs are acceptable for reporting purposes when a related definitive diagnosis has not been established(confirmed) by the healthcare provider. 

10 Essential Steps To Upgrade Laboratory Billing Services For 2024

According to the latest CMS guidelines, the demand for more skilled medical billing professionals is also increasing proportionally. Today, several medical billing companies are offering outsourcing lab medical billing services and software solutions to fulfill the staffing and administrative needs of healthcare practices. 

According to a study, 70% of healthcare providers tend to outsource medical billing services in the USA. However, some small and medium-sized practices with a very small volume of medical claims don’t require these billing solutions. Therefore, they prefer to hire an in-house medical billing professional or two to manage their healthcare revenue cycle management

Whether you prefer to outsource lab billing services or want to hire in-house lab billing experts, lab practitioners should be aware of how the laboratory billing services work and how to gauge the success of their lab billing services. 

7 critical discrete yet highly coupled tasks complete the lab billing process. Here are the essential steps that should be taken to accomplish the entire laboratory billing services.

Step 1: Collect Patient Demographic Information

The primary step of lab billing services is to collect the patient’s demographic information as soon as the patient steps into the lab/hospital. 

However, 2 main cautions are needed to be taken care of during the collection of patient information; 

  1. It is important to ensure the accuracy of the patient’s data to make sure that no information error flows down the line in the lab billing services. 
  2. Secondly, patient registration staff should make sure that they collect the latest demographic information of all patients including the patient’s name, phone number, insurance ID, email, residential address, etc. 

Step 2: Verification Of Coverage Plan Eligibility Criteria

After collecting the patient’s demographic information, the next critical step for the healthcare administration staff is to determine who is financially responsible for the healthcare services delivered to the patients. 

For this purpose, lab billing specialists should proceed with the patient’s insurance eligibility criteria verification. You should check if the insurance company covers reimbursements for the prescribed or/and following services delivered to the patient by the hospital/ healthcare lab. Also, they should make sure that the patient’s insurance policy covers all the healthcare & E/M services provided to the patient during their appointment. 

Therefore, patient registration staff should walk through the eligibility criteria of the patient’s insurance policy. It helps providers to make sure that the patient complies with the eligibility criteria of the insurance policy, otherwise, he/she would be directly responsible for the financial dues of the healthcare practice. 

After identifying who’s financially responsible for the patient’s dues, the healthcare lab/ hospital should offer simple and multiple payment options to the payers to streamline their payment methods. 

If the patient can easily grasp the payment method, then you can not only offer them financial comfort but also free up their time to enhance the patient experience. It helps to increase the regular visits of repeated customers in your lab and give an additional boost of productivity to your business. 

Step 3: Complete Documentation

The immediate responsibility that comes after insurance eligibility criteria verification is to complete documentation. When the patient-physician encounter occurs (when the patient meets the doctor) either from direct interactions, phone talks and/ or webcam chats then the administration staff should fill out an encounter form to record all the details related to the patient-physician encounter on the behalf of the provider. 

Step 4: Medical Transcription

At this step, the lab billing and coding team should start taking notes during patient encounters to transform this data into logical and accurate medical documentation. Whether you maintain an in-house medical billing department or outsource lab billing services, your billing staff should collect voice notes via highly secure voice recognition software. 

Step 5: Super bill Creation and medical billing

The lab billing and coding specialists should convert medical transcription into medical codes to prepare medical claims. Medical coding is the process of converting healthcare data into standard alpha-numeric nomenclature (medical codes). 

There are 3 types of medical codes widely accepted across the USA; 

  • (CPT®) Codes:

Introduced by the (AMA), CPT codes are the standard set of medical codes used to translate the services provided by doctors and healthcare providers into uniform language. 

  • International Classification of Diseases (ICD 10): 

ICD codes are used to translate a broad range of clinical knowledge on the extent, causes, and consequences of human disease and death worldwide into standard alpha-numeric codes. 

  • Two categories of HCPCS codes exist, specifically Level I and Level II:
  1. Level I HCPCS codes

HCPT stands for Healthcare Common Procedure Terminology®. The composition includes 5 numeric components. While HCPT codes are employed for reporting medical, surgical, and diagnostic procedures conducted by healthcare professionals, CPT codes are reserved for documenting similar services provided by trained practitioners. HCPCS codes serve as a standardized system for reporting medical treatments and services to various insurance programs.

  1. Level II HCPCS codes

This instrument enables the detection of items that do not come under CPT’s jurisdiction. A letter precedes 5 digits in the Level II coding system. HDCT represents the current dental coding system within Level II codes.

After applying medical codes, the lab billing and coding specialists should follow the claim submission timeline of the insurance company. In this way, lab billers can streamline lab billing services and reimbursement models. 

Remember, a medical claim contains charges from the medical office and patient demographics alongside medical codes. Next, laboratory billing specialists compile an extensive report throughout this procedure also known as a “super bill”. 

Step 6: Charge Entry / Claim Submission

After creating the “super bill”, lab billing specialists should create a charge entry sheet which is transferred to the insurance company down the line. If the patient’s insurance company plan doesn’t cover the services provided to the patient then the billing professionals should review the charge sheet again to identify and eliminate mistakes. 

There could be 3 main reasons why the insurance company denies to pay the bill; 

  1. Medical coding mistake
  2. Inaccurate details
  3. Obsolete information 

Step 7: Claim Scrubbing & Transmission

Claim scrubbing is the process of verifying the accuracy of CPT codes or other codes used in medical codes used to prepare medical charge sheets. There are several Electronic Health Software (EHS) that are used to automate the claim scrubbing process i.e. Kareo, Athenahealth, and much more. 

When the lab billing and coding specialists are prepared and scrubbed properly, there is a high chance that you can get your medical claims approved by the insurance company on the first attempt of submission. 

Then you can transfer your medical claims to the insurance company digitally through an EDI software that is highly secured. 

Final Verdict:

CMS has updated the ICD-10-CM coding guidelines for 2024. Healthcare practitioners as well as medical labs need to adopt the updated coding standards to streamline the healthcare revenue cycle management (RCM). Hospitals and healthcare labs should upgrade their lab and medical billing services according to the CMS-suggested ICD-10-CM guidelines.

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