ICD-10 Diagnosis Codes Decide Whether or Not Medicare Will Pay

It takes years of education and training to teach healthcare providers the skills needed to evaluate a patient, make a diagnosis, and treat that person according to the standard of care. In 2015, a new layer of complexity was added that affects whether or not your insurance plan will pay for your care — a change in diagnosis codes.

Woman speaking with her doctor about ICD Coding and looking at paperwork after a bone scan
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How Medical Billing Works

You could take a course to understand the intricacies of medical billing, but what you really need to know are the aspects of billing that affect you on a personal level.

In simple terms, your healthcare provider evaluates you, picks a diagnosis code to match your condition, and chooses a billing code based on the complexity of your visit. Any tests ordered must also be linked to the diagnosis code. This information is then directed to your insurance company, Medicare included, so your healthcare provider gets paid for their service.

If your healthcare provider does not pick the right diagnosis code, it is possible your insurance plan will not pay for the care you received. That leaves you paying not only a copay or coinsurance for the test or visit but the full dollar amount.

The Change from ICD-9 to ICD-10 Codes

The International Classification of Diseases (ICD) is a toolbox of diagnosis codes that is used worldwide to track disease and mortality rates. Standardizing diagnosis codes improves the ability to track health initiatives, monitor health trends, and respond to health threats.

The World Health Organization released ICD-10 in 1999. The United States, however, was slow to adopt the most recent codes and did not transition from ICD-9 to ICD-10 until October 2015.

The number of possible codes your healthcare provider must choose from exponentially increased in October 2015. There are more than 155,000 codes available in the 2015 version of ICD-10 as compared to the 17,000 codes in ICD-9.

This increased specificity makes it harder for healthcare providers to find the codes they need to get insurance to pay. Research has shown that ICD-10 coding is often inaccurate. More billing errors could lead to you paying more than your fair share.

An Ever Growing List

The ICD list is updated every year. In 2022, there will be 124 new codes added to ICD-10.

Choosing the Right Code

To get an idea of the complexity of ICD-10, look at common upper respiratory complaints. Allergic rhinitis (a runny nose from allergies) has at least six different codes from which to choose, pneumonia 20 codes, asthma 15 codes, influenza 5 codes, sinusitis 21 codes, and sore throat 7 codes. Those are the easy ones.

Complicated conditions like hypertension have many layers that explain how the condition relates to heart disease, kidney disease, pregnancy, and more. Diabetes has even more codes. There are even three codes for being struck by a falling object on a sailboat! You can amuse yourself and search for codes on the Centers for Medicare and Medicaid (CMS) website.

Example: Medicare only pays for bone density screening for osteoporosis if certain ICD-10 codes are used. Medicare will deny coverage for ICD-10 code M85.80, "other specified disorders of bone density and structure, unspecified site", but will approve reimbursement for M85.81x-M85.89x, codes that specify the location (ankle, foot, forearm, hand, lower leg, shoulder, thigh, upper arm, or multiple sites) and laterality (left or right) of the bone disorder, i.e., M85.822, "other specified disorders of bone density and structure, left upper arm."

This is an oversimplification as there many other codes that will cover for bone density screening. However, it is easy to see how a single digit could decide who pays for your care, you or your insurer.

Coding for Gender

Insurance covers certain services by gender. For example, cervical, ovarian, and uterine cancers are specific to women and prostate and testicular cancers to men. This is based on anatomy. Screening tests and treatments for these conditions, for the purposes of insurance coverage, are generally binary.

This has been a challenge for people in the transgender community. Transgender men and women may no longer identify with their sex assignment at birth but could be at risk for these conditions just the same.

To assure that everyone gets the care they need, there are coding elements that let the insurance company know when these gender-specific services are appropriate.

The Centers for Medicare and Medicaid Services has two billing codes for this purpose, a condition code 45 ("Ambiguous Gender Category") and a KX modifier (“requirements specified in the medical policy have been met”). When your healthcare provider adds these codes to your visit, they let the insurer know that these services are medically necessary.

Appealing Your Case

After the transition to ICD-10 in 2015, the Centers for Medicare and Medicaid Services (CMS) allowed for a one year grace period for billing purposes. As long as healthcare providers coded in the right category for a disease, even if it was not the preferred code, they would not be penalized by CMS and your care was covered. That is no longer the case.

If at any time you receive a bill you do not think you should be required to pay, contact your healthcare provider's office. It is possible they have used the wrong ICD-10 code. Your healthcare provider may be able to change the diagnosis code to one that gives you the coverage you need. If ICD-10 coding is not the reason for the billing issue, you may need to make an appeal with your insurance company.

A Word From Verywell

Healthcare providers are better versed in medical care than medical billing. With more than 155,000 ICD-10 codes available, it is possible your healthcare provider could choose the wrong one. If Medicare denies payment for services because of a coding error, you are left to pay out of pocket. Know your rights. Reach out to your healthcare provider's billing office if you find any discrepancies in your billing.

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9 Sources
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  2. Topaz M, Shafran-Topaz L, Bowles KH. ICD-9 to ICD-10: evolution, revolution, and current debates in the United StatesPerspect Health Inf Manag. 2013;10(Spring):1d. Published 2013 Apr 1.

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  4. Centers for Disease Control and Prevention. International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM). Updated July 2, 2021.

  5. Beckman KD. Coding common respiratory problems in ICD-10Fam Pract Manag. 2014;21(6):17–22.

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  7. Centers for Medicare and Medicaid Services. ICD-10 diagnosis codes for bone mass measurement. Updated April 12, 2016.

  8. Centers for Medicare & Medicaid Services. Instructions Regarding Processing Claims Rejecting for Gender/Procedure Conflict. Medicare Learning Network. Updated January 3, 2013.

  9. American Academy of Family Physicians. Physicians win one-year grace period for ICD-10 transition. Updated July 7, 2015.