Ensuring your claims are coded correctly will prevent delays in payments and keeps your account cleaner. Below are common coding errors.

  1. Coding is not specific enough
    • Each diagnosis must be coded to the highest level of specificity or insurance carriers may consider the diagnosis truncated. Diagnosis codes can be anywhere from three to seven digits long and when billing to the highest level of specificity, the maximum number of digits for each code must be used. A diagnosis can be four digits long but require a fifth to be accepted. Three-character ICD-10 codes are only used when the category is not subdivided any further.
    • Example 1:
      N18.3 (Chronic Kidney Disease – Moderate)

      • N18.30– Chronic kidney disease, stage 3 unspecified
      • N18.31 – Chronic kidney disease, stage 3a
      • N18.32 – Chronic kidney disease, stage 3b
    • Example 2: Diagnosis
      R51 (Headache)

  1. Local and National Coverage Determination guidelines
    • Since Medicare coverage is limited to medically necessary services, a diagnosis that is deemed medically necessary by Medicare must be used to be considered for payment. If the primary diagnosis code is not on Medicare’s list of medically necessary codes, the service will be denied and the full amount of the service is often allowed to the subscriber.
    • The Centers for Medicare & Medicaid Services make the decision as to what is covered through and “evidence-based process, with opportunities for public participation.” More about the determination process can be found here:
    • You can search for the coverage guidelines on the website by entering our state and the CPT/HCPCS code you need the coverage for. If there is no coverage policy for the selected service, coverage will be left to the discretion of Medicare’s contractors.
      Medicare Coverage Database:
  2. Medicare and preventative services
    • Medicare covers preventative services at 100% of the approved rate; however, a diagnosis code indicating the service is preventative and the appropriate CPT/HCPCS code must be used.
    • Preventative diagnosis codes typically start with the letter ‘Z’ and should be used on preventative procedures (flu shot, pneumonia shot, Medicare Annual Wellness visits, etc.). However, if a “Z” diagnosis code is used as the primary diagnosis on a non-preventative procedure code, Medicare will consider the service performed as routine in nature, and as a result, it not covered. Most of the time, the full amount of the charge will be allowed to the patient. If a service is not routine in nature, the primary diagnosis code should not begin with the letter Z.

About PGM

Physicians Group Management (PGM) is one of the fastest-growing medical billing companies in the United States.  For over 35 years, PGM has been providing medical billing and practice management services and software to physicians, healthcare facilities, and laboratories.  PGM’s current client base encompasses the full spectrum of medical specialties, including Internal Medicine, Dermatology, Plastic & Reconstructive Surgery, Pathology, EMS & Ambulatory Services, Cardiology, Nephrology, Urology, Pain Management, OB/GYN, Gastroenterology, Independent Laboratory, and many more.  PGM’s medical billing and practice management solutions include:

– A full suite of practice management and medical billing solutions each tailored to the specific needs of your practice

– CCHIT-certified electronic medical record software and services

– Streamlined, customized credentialing services for providers of all sizes

– Practice management software that provides advanced financial and practice analysis tools, specifically designed to give enhanced visibility of operations at the click of a button

Laboratory billing software that offers best-in-class systems to streamline, and manage and track, financial and administrative processes