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What is ICD-10’s Excludes1 Edit, and Why is it Causing PTs so Much Grief?

Excludes1 can be confusing but here’s all you need to know about the ICD-10 edit that’s giving PTs a run for their money—literally.

Breanne Krager
5 min read
July 16, 2021
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Let’s face it: ICD-10 isn’t the easiest concept to wrap your head around. However, learning this system—and I mean really learning it—can mean the difference between optimizing your clinic’s reimbursements or accumulating a fat stack of denials. Unfortunately, it’s the latter option that’s plaguing a considerable number of rehab therapy clinics nationwide—and, thanks to John Wallace, PT, MS, WebPT Chief Business Development Officer of Revenue Cycle Management, we think we know what’s causing it.

Why are denials on the rise?

ICD-10 codes entered the scene not too long ago. The year was 2015 and the US healthcare system was long overdue for a more accurate method of documenting clinical diagnoses. However, given the sheer size of this new system—which encompasses approximately 69,000 codes and counting—most payers (Medicare included) placed a two-year moratorium on ICD-10 edits to give providers time to adjust to the new rules. Although these edit applications began reaching other sectors of the healthcare industry circa September 2016 (the end of the official grace period), rehab therapy was left largely untouched. But now, this edit freeze has officially lifted—and has caught a fair number of rehab therapists unawares. 

“Specifically, we are seeing a surge in Anthem Blue Cross Blue Shield (BCBS) denials pertaining to ICD-10’s ‘Excludes1’ note,” said Wallace. “And if history tells us anything, it’s only a matter of time before other payers follow suit.”

That said, let’s get you up to speed on all things Excludes1 to help your clinic avoid unnecessary payer denials.

What is ICD-10’s Excludes1 note?

Per the ICD-10’s 2021 code book, there are actually two types of “Excludes” notes: Excludes1 and Excludes2. Each type of note varies slightly by definition, but “they are similar in that they indicate that codes excluded from each other are independent of each other.” The descriptions of the notes themselves can be found in the code book’s tabular list under specific code categories and individual codes.

The Excludes1 notes essentially means “NOT CODED HERE!” (ICD-10’s words, not ours.) To elaborate further, “an Excludes1 note indicates that the code excluded should never be used at the same time as the code above the Excludes1 note. An Excludes1 is used when two conditions cannot occur together, such as a congenital form versus an acquired form of the same condition.” 

“Simply put, the Excludes1 note is in place to ensure that the principle code used to diagnose a patient is not only as specific as possible, but devoid of filler codes that could potentially confuse and detract from the primary diagnosis,” Wallace added. 

This brings us to the crux of the Anthem BCBS denials issue.

How can PTs avoid Excludes1 edits?

If there is one rule that reigns over all of the ICD-10 coding rules, it’s this: Always—always—code to the most specific diagnosis treatment possible. To this end, you should never code a non-specific diagnosis with a specific diagnosis for the same problem. Otherwise, you will likely incur an Excludes1 edit, which will inevitably result in a claims denial.

So, to avoid these edits, remember that signs and symptoms routinely associated with a disease process should not be assigned additional codes. 

“For instance, if you’re treating a total knee patient, you should not add codes like knee pain, joint effusion, joint contracture, or difficulty walking, as these symptoms are already a given for a patient recovering from a total knee replacement,” Wallace explained. “Similarly, for patients with intervertebral disc disorders, don’t include codes like cervicalgia, low-back pain, neck pain, or any other conditions that are a direct consequence of the disorder.”

Are there any exceptions to the Excludes1 note?

Yes—one major one. After all, what’s a rule without an exception? As it pertains to the Excludes1 note, a non-specific diagnosis can be coded with a specific diagnosis if these two conditions are unrelated.

Basically, anything that is not routinely associated with the primary diagnosis can—and should—be coded if it impacts the episode of care. Think comorbidities, for example. While comorbidities may not always be integral to the disease process, they can still impact the:

  • type of treatment,
  • intensity of treatment,
  • frequency of treatment,
  • complexity level of your evaluation, or
  • duration of treatment.

So, any conditions (comorbidities or otherwise) that cause a change in these items must be coded as secondary or tertiary diagnoses. Wallace also suggests stating how this condition may affect the episode of care in the medical record should you have to code for it.

Are there any other ICD-10 coding issues PTs should be aware of?

As a matter of fact, yes. Although Wallace estimates that Excludes1 edits currently account for 50% to 60% of the denials he’s seeing, there are still a fair share of coding issues regarding laterality, the seventh character, and aftercare (Z) codes.

Fortunately, our “Physical Therapists’ Guide to ICD-10” covers each of these in greater detail. Be sure to check it out for more ICD-10 coding tips!

“At the end of the day, payers have a perfectly reasonable expectation to know that you understand what you’re doing and why you’re doing it,” Wallace said. “So, rather than throw as many codes at them as possible to see what will stick, take the extra time to identify the specific diagnosis and work from there. It may take a week or two to really get comfortable with this ‘less is more’ approach, but it’s worth it if it means fewer denials in the long run.”


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