Question

Post a comparison statement regarding the possible cause(s) of widespread use of unspecified diagnosis codes by physicians and coders.Provide at least one example of how you believe unspecified codes impact data integrity and revenue excellence.

Answer 1

The diagnosis code supports the medical necessity for the service and tells the payer why the service was performed. It can be the source of denial if it doesn't show the medical necessity for the service performed.

Unfortunately, nonspecific documentation and coding persists. This is an ongoing problem, even though the official guidelines for coding and reporting require coding to the highest degree of specificity. Third-party payers are making payment determinations based on the specificity of reported codes, and payment reform efforts are formulating policies based on coded data. The significance of over-reporting unspecified diagnosis codes cannot be understated. In the short term, it will increase claim denials, and in the long term it may adversely impact emerging payment models.3,4 Calculating and monitoring unspecified diagnosis code rates is critical to successfully leverage specificity in the ICD-10-CM code set.

An ICD-10-CM code is considered unspecified if either of the terms “unspecified” or “NOS” are used in the code description. The unspecified diagnosis code rate is calculated by dividing the number of unspecified diagnosis codes by the total number of diagnosis codes assigned. Health information management (HIM) professionals should be tracking and trending unspecified diagnosis code rates across the continuum of care.5

Acceptable Use of Unspecified Diagnosis Codes

Unspecified diagnosis codes have acceptable, even necessary, uses. The unspecified code rate is not an error rate, but rather an indicator of the quality of clinical documentation and a qualitative measure of coder performance and coding results. Even CMS explicitly recognizes that unspecified codes are sometimes necessary. “When sufficient clinical information is not known or available about a particular health condition to assign a more specific code, it is acceptable to report the appropriate unspecified code.”6 It’s also important that coding professionals use good judgment to avoid unnecessary queries for clarification of unspecified diagnoses. The official coding guidelines provide explicit guidance for appropriate uses of unspecific diagnosis codes.7 EU

Overuse of Unspecified Diagnosis Codes

Overuse of unspecified diagnosis codes is a problematic trend. Use of unspecified ICD-10-CM codes, ignored during the first year following implementation of the code set, is not improving. In this author’s experience, unspecified diagnosis code rates can range anywhere from 20 percent, on the low end, to over 40 percent. A diagnosis code rate over 30 percent requires investigation and appropriate corrective actions.

Widespread use of unspecified codes should be the exception, not the rule.8 High unspecified diagnosis code rates may be due to either clinical documentation or coding practices. One strategy to ensure unspecified codes are used appropriately is to monitor unspecified code rates and address any upward trends or outliers. HIM professionals should spot check the most commonly reported unspecified codes. Review the clinical documentation on a targeted sample to confirm that the reported codes align with the degree of specificity in the health record. Examples of some conditions most commonly reported with unspecified diagnosis codes are listed in the sidebar above.

HIM professionals should identify the most commonly reported unspecified diagnosis codes in their facility and review a sample of related encounters to confirm that unspecified codes were used appropriately. When overuse of unspecified codes is identified, solutions may involve improvements in the specificity of clinical documentation or process improvement to ensure coding professionals are coding to the highest degree of specificity that is available

On October 1, 2016, the Centers for Medicare and Medicaid Services (CMS) wrapped up its one-year grace period for allowing the use of unspecified codes without consequence. The governing body also rolled out its first update to the coding system in four years, including a mammoth 6,000 new codes.

Both of these moves could negatively impact financial performance if appropriate action is not taken to minimize risk. Providers still engaging in deficient “unspecified” coding practices face short-term revenue cycle exposure in the way of denied claims, increased accounts receivable days, and time-consuming workflows associated with drafting appeals. Over the long term, revenue risk is associated with lower value-based payments.

Specificity is now the name of the game, and HIM departments must educate teams to code at the highest level under ICD-10. With thousands of new codes in play,

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