Coding Diagnoses on Outpatient Encounters

This coding tip is intended to clear up any confusion regarding coding and reporting of secondary diagnoses on outpatient encounters.

What are HCC’s?

One reason that coders should report chronic conditions (including history and status codes) on outpatient records is the HCC’s—Hierarchical Condition Categories. The quick and easy explanation of what HCC’s are is each HCC is mapped to certain ICD-10-CM codes or code ranges. HCC coding is designed to estimate future health care costs for patients. Insurance companies assign the patient a risk adjustment factor (RAF) score. This score is used to predict costs for that patient. The HCC’s help explain the complexity of the patient and paints a whole picture of the patient and their illnesses. If secondary diagnoses are not reported, then HCCs are not captured for the claim. This may impact reimbursement and quality measure statistics. Below are several websites that are available and that go into great detail about what HCC’s are, how they are calculated, and why they are important.

Learn more about Hierarchical Condition Categories (HCC’s) here:

ICD-10-CM Official Guidelines for Coding and Reporting FY 2022 Pages 105-109:

The guidelines for coding outpatient records are very clear in the OCG. These guidelines are provided for use by hospitals/providers and provider-based office visits. Reporting of secondary and/or chronic conditions are often not reported for outpatient encounters. Omitting and/or failure to report these diagnoses do not paint a complete picture of the patient. Below, we will discuss some of the OCG’s for outpatient reporting.

  • Reporting signs and symptoms: Codes for signs and symptoms are acceptable if an established diagnosis for the symptom has not been provided. In the absence of facility specific coding guidelines, HIA coders should follow the Symptom Coding for Ancillary, ER and Outpatient Surgery Cases. If the provider does not specifically link a particular sign or symptom to a diagnosis, both the diagnosis and the sign/symptom would be reported. The reason for coding both is that there may be additional workup planned or necessary for the sign/symptom. If the provider does state a link, then only the documented condition would be reported. Examples are below:
    1. Patient presents to the emergency department with chest pain and arm pain. The provider lists in the final impression or final diagnosis 1). Chest pain; 2). GERD. Since the physician has listed out the symptom of chest pain and has not documented that the chest pain is due to the diagnosis of GERD (in the dictation) both the symptom code of chest pain and the diagnosis of GERD would be reported. The coder should not assume that the chest pain is due to the GERD.
    2. Same patient as above except the provider states in the dictation that the cause of the chest pain is GERD, and the final impression or final diagnosis is 1). GERD. Only a diagnosis code of GERD would be reported. If the provider had listed out the diagnosis of chest pain in the final impression, then the coder would also pick up the code for the chest pain.
    3. Patient presents to the emergency room with abdominal pain in the upper left quadrant and during interview with the provider it is noted that the patient also has pain during urination. The patient is discharged with the final diagnosis of 1). Abdominal pain due to diverticulosis. In this case, diverticulosis would be coded but not the abdominal pain. The symptom of pain during urination would be reported as well since resources were used to evaluate it.
  • Reporting codes for encounters for circumstances other than a disease or injury: Codes Z00-Z99 are provided so that codes for past diseases or other histories can be reported for the patient. Family history codes may also be pertinent for outpatient encounters. If a history or family history has an impact or influences care and/or treatment in any way the history should be reported. Here are a few examples:
  1. Patient presents for outpatient visit for difficulty breathing. The patient has COPD and has had pneumonia several times in the past couple of years. The patient does have a history of smoking and a family history of father with lung and colon cancer. The final impression by the physician is COPD exacerbation. In this case, a code for the COPD exacerbation would be reported as well as “Z” codes for personal history of pneumonia, history of smoking, and family history of lung cancer and colon cancer. All these histories are pertinent and help to describe the patient’s history and possible future workups needed. This is assuming that all the history of codes were reported in another section of the documentation besides the history section.
  2. Patient presents for difficulty urinating and is diagnosed with BPH. In the patient’s record it is noted that there is a family history of ovarian cancer in the mother and prostate cancer in the father. In this case, a code for BPH is reported along with the “Z” code for the family history of prostate cancer (assuming it is documented elsewhere besides the history section). No code would be reported for the family history of ovarian cancer since this is a male patient and no future workup would be needed for this family condition.
  • Uncertain diagnoses are NOT reported in the outpatient setting. The signs, symptoms, abnormal test results or other reason for the visit would be reported.
  • Chronic diseases in the outpatient setting should be reported. If a condition is under current treatment, it should be reported for each visit if the patient is receiving treatment for the condition. These conditions should be documented in the outpatient record somewhere besides the history, problem list and/or a medication list. It is the physician’s responsibility to document that the chronic conditions are affecting the care and management of the patient for that encounter.
  1. Patient presents with upper respiratory symptoms for evaluation. During the evaluation it is noted/documented that the patient has a past medical history of HTN. The patient is no longer taking medications for HTN, and it is controlled by dieting and recent weight loss per the documentation within the current record progress note. The patient is diagnosed with URI and given antibiotics. Should HTN be coded? YES! There are many over the counter drugs to treat URI symptoms that should not be taken by patients with HTN. The drugs raise blood pressure just by using as directed. The physician has documented that HTN in the progress note and that it is controlled by diet and documented this in other than the PMH list alone.

Medical Necessity

Another reason to report all secondary diagnosis, history and status codes is to confirm medical necessity. Some payors will deny tests done outpatient if the medical necessity is not met. Many times, medical necessity is determined by the ICD-10-CM codes reported on the outpatient claim. For example, if an EKG is done on a patient in an encounter for outpatient fracture repair, and the chronic atrial fibrillation that is documented in the patient’s record as reason for the EKG is not coded as a secondary diagnosis by the coder, the EKG charge/reimbursement could be denied by the payor. There are also many other examples, such as a patient getting extended laboratory tests because they are on long term anticoagulants such as Coumadin. It is very important that all secondary diagnosis/status/history codes be reported on the outpatient claim when documented to be affecting the current patient encounter by the provider. Just remember that all chronic conditions and histories must be documented in the record somewhere besides the history section. Coders should not be coding directly from the past medical history, past surgical history, family history, social history, or medication lists.

Outpatient Coding Tips:

  • All outpatient orders should be reviewed to determine if additional signs, symptoms, or diagnoses are provided by the physician.
  • Coders may report confirmed diagnoses on radiology and pathology reports (except for incidental findings)
  • “Z” codes help paint the entire health picture for the patient. If there is a specific code for a past or family condition, it will most likely always be reported as long as documented in a section of the record besides the history section.
  • Code only confirmed diagnosis on outpatient encounters.
  • Remember to report any long-term use of specific medications when these have been brought into the documentation and not from the medication list alone.
  • Sometimes it is the “Z” codes that will help meet medical necessity for outpatient testing. Chronic conditions should be reported on each visit when they are under treatment or are systemic medical conditions and documented to be affecting the patient on this encounter.
  • Chronic systemic conditions should be reported even in the absence of intervention or further evaluation. These conditions will affect patients for the rest of their lives or most of their lives and require continuous clinical monitoring and evaluation. Certain medications are not to be used if a patient has a certain condition or cannot be mixed when taking a certain medication. This should always be part of the physician’s medical decision-making process and documented within the patient’s current record other than in the history section.
  • Coders may not assign a diagnosis code based on the up/down arrows on an order or MD note.
  • Coders should remember that additional diagnoses reported on claims can help in supporting the medical decision making that went into treating this patient.
  • Any diagnosis that requires treatment or monitoring would be reported regardless of if it is chronic or develops during the visit as long as documented other than in the history section of the record.
  • Past medical conditions and diagnoses help improve the communication to other healthcare providers and registries. The diagnoses are not just reported for payment but statistics. These conditions should be documented as currently affecting the patient and or decision-making for the current encounter.
  • Signs and symptoms may be reported in addition to specific diagnosis codes if the physician has not clearly documented the link between signs/symptoms and the condition. This is due to limited documentation in outpatient records and the need for additional follow up testing that may be necessary (see examples above).
  • If you can’t describe what HCCs are, it is recommended that you review some of the websites above and become familiar with these. If you know the why things are reported it is easier to remember to report them.

Coders must review the entire outpatient encounter rather than only focusing on the reason for the visit. Diagnoses and symptoms may be found in radiology order and impressions, orders for labs, anesthesia evaluations, history of present illness, physical exam by the physician and the final impression. Not all of these will be present for every outpatient encounter, but they should be reviewed if present. Reviewing these areas will ensure that all pertinent secondary diagnosis and status codes are reported.

Authored by Kim Boy, RHIT, CDIP, CCS, CCS-P

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Coding Clinic for ICD-10-CM/PCS, Third Quarter 2021 Page 32
ICD-10-CM Official Guidelines for Coding and Reporting
Coding Clinic for ICD-10-CM/PCS, Second Quarter 2022 Page: 30
ICD-10-CM Official Guidelines for Coding and Reporting FY 2020
Coding Clinic for ICD-9, Second Quarter 2000 Pages: 20-21
Coding Clinic for ICD-10-CM/PCS, Third Quarter 2019 Pages: 5-7
Coding Clinic for ICD-10-CM/PCS, Third Quarter 2013 Pages: 27-28
Coding Clinic for ICD-10-CM/PCS, Fourth Quarter 2012 Pages: 90-98
Coding Clinic for ICD-10-CM/PCS, First Quarter 2017 Pages: 4-7
Coding Clinic for ICD-9-CM, Third Quarter 2007 Pages: 13-14
Coding Clinic for ICD-10-CM/PCS, Fourth Quarter 2016 Page: 143
Coding Clinic for ICD-10-CM/PCS, First Quarter 2014 Pages: 11-13, 17-18


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The information contained in this coding advice is valid at the time of posting. Viewers are encouraged to research subsequent official guidance in the areas associated with the topic as they can change rapidly.

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