Blog Post

Medical Necessity and ICD-10: What Physical Therapists Need to Know

When it comes to ICD-10, physical therapists must code for medical necessity or risk claim denials. Click here to learn more.

Charlotte Bohnett
5 min read
August 11, 2015
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ICD-10 has raised a lot of questions, and with good reason: it differs greatly from its predecessor, ICD-9, after all. One critical question is, “How will ICD-10 affect the way in which I diagnose?” Currently, many physical therapists receive diagnosis codes from referring physicians, and they just carry those over into their notes. But ICD-10 isn’t solely about coding patient diagnoses correctly; it’s also about coding the correct patient diagnoses. As Lori Purcell, RHIA, CCS, explains in this article, “Service drives payment, but if the diagnosis doesn’t match [the services], you won’t be paid.” To put it succinctly, thanks to ICD-10—and direct access—the days of simply carrying codes over from referrers are gone. So, what’s a PT to do? Code for medical necessity, of course. (That’s right; medical necessity isn’t just for that pesky therapy cap.)

“For a service to be considered medically necessary, it must be reasonable and necessary to diagnosis or treat a patient’s medical condition,” explains this Physicians Practice article. Essentially, the diagnosis codes reported on a claim inform the payer as to why the provider performed certain services. Thus, those codes help justify the medical necessity of those services. If you simply use whatever ICD-10 codes came from the referring physician, you likely won’t be using the codes most applicable to the services you performed. As a result, you may suffer a denial.

Let’s take a look at a few examples from this Just Coding article:

  • “A patient suffers a stroke and is attending physical therapy. A lot of patients suffer strokes and don’t need physical therapy. The therapy is actually treating the residual effects of the stroke, so that’s what should be reported as the diagnosis on the claim form.”
  • “A pregnant woman comes into the physician’s office for a routine visit and tells the physician she has noticed decreased fetal movement. The physician performs a nonstress test to check on the baby’s condition. If the coder reports a diagnosis code for just an office visit, the payer will likely deny the bill for the nonstress test for lack of medical necessity.”

Okay, you get it: coding for medical necessity has to happen when it comes to ICD-10. For that reason, do not copy the codes supplied in the patient referral. Use the physician diagnosis to inform you on the patient’s situation, sure; but then use your own clinical judgment and skills as a medical professional to diagnose the patient based on what you’re actually going to treat.

Furthermore, avoid the “cheat sheet” strategy. As most providers know, certain CPT codes are only payable when used in conjunction with certain ICD-9 codes. Thus, you may be tempted to quickly crosswalk those ICD-9 codes and tack up a new cheat sheet. Don’t. The rules aren’t the same, and crosswalks typically yield unspecified ICD-10 equivalents. As this ICD-10 for PT article explains, “ of the main battle cries of the new code set is increased specificity, and the transition to ICD-10 represents a giant step away from the use of unspecified codes (unless one of those codes truly represents the most accurate description of a patient’s condition). Thus, if you submit an unspecified code when a more specific code is, in fact, available, you could put yourself at risk for claim denial.”

Lastly, if you receive a denial—which is still possible even with the AMA-CMS “grace period” ruling—make sure you investigate why. Specifically, find out whether the denial resulted from lack of medical necessity or lack of supporting documentation. As this blog post explains, “Knowing the answer will help you to appeal the denial—if justified—and hopefully avoid receiving additional denials in the future.”


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