Initial vs. Subsequent (7th Character) ICD 10 Coding with Perfection

It’s been six years since the ICD-10-CM implementation, but many coders and providers still struggle with assigning the seventh character for initial and subsequent encounters. These 7th characters identify two episodes of care that incur distinct management options and costs.

The challenge arises in selecting the correct encounter. According to ICD-10-CM guidelines, “The assignment of the 7th character is based on whether the patient is undergoing active treatment and not whether the provider is seeing the patient for the first time.” So, the key point here is whether active or routine (recovery) care is being provided below.

• Applying the CPT new patient guideline to support the initial encounter character This guideline does not apply to ICD-10-CM codes, only to applicable CPT evaluation and management (E/M) service codes. Remember, the assignment of the 7th character is based on whether the patient is in active treatment.
• Code assignment is based on provider specialty or setting. Although emergency room services and inpatient surgeries support an initial encounter character, the use of this character is not limited to provider specialties or healthcare Any provider rendering services may use an initial encounter character as long as the injury is in the active treatment phase.

An initial encounter is the first time the injury or condition is evaluated by the provider. Although this could be a correct statement, an initial encounter character may be used each time the patient is seen by a different provider over the course of the active treatment. The code assignment is not limited to the patient’s initial medical evaluation.

Few Example of Initial Encounters.

• Emergency department visits and services
• Surgery
• The first time the condition is (e.g., first X-ray reading to establish a fracture diagnosis)
• In the case of infections, the use of antibiotics to treat a medical complication
• Related active treatments before the rehabilitation (aftercare) plan is established

Few Examples of Subsequent Encounters.

• Subsequent X-rays to check the healing status of a fracture
• Follow-up visits after the active treatment phase, for example, wound or suture inspections
• Suture removal
• Cast change or removal
• Pain management and medication adjustments
• Removal of an external or internal fixation device
• Physical or occupational therapy

Active vs. Routine

Understanding this concept is crucial when assigning the correct encounter character. Although the definition of active treatment is not found in the ICD-10-CM code book, examples and guidelines have been published by AHA Coding Clinic. Examples of active treatment include “surgical treatment, emergency department encounter, and evaluation and continuing treatment by the same or a different physician.” The 7th character for active treatment should also be assigned when the injury or condition is diagnosed for the first time and until the provider establishes the aftercare (healing) plan. In contrast, a subsequent encounter character is used when the documentation indicates that the patient is receiving routine care during the healing or recovery phase. Coding Clinic provides the following examples of subsequent care: “cast change or removal, an X-ray to check healing status of fracture, removal of an external or internal fixation device, medication adjustment, and other aftercare and follow-up visits following treatment of the injury or condition.”

Coding Example for Active, subsequent and Sequela coding

Example 1: A male patient, running late for his flight from New York to Texas, fell and broke his right ankle. The ambulance provider took him to the nearest N.Y. hospital emergency room (ER). The provider stabilized the ankle and established a diagnosis of “sprain of calcaneofibular ligament of the right ankle.” The ER doctor also told him to see a podiatrist as soon as he gets to Texas.

The patient went to a specialist in Texas, who evaluated the sprain and established an aftercare plan. After a couple of weeks, the patient returned to the provider and received follow-up care.

After several years, the patient developed a degenerative process in the ankle, and the primary care provider (PCP) indicated that it was related to a previous injury. The definitive diagnosis was “osteoarthritis (OA) in right ankle secondary to sprain of calcaneofibular ligament.”

In this scenario, another 7th character option is introduced: sequela. According to ICD-10-CM, “A sequela is the residual effect (condition produced) after the acute phase of an illness or injury has terminated.”

Sequencing the codes could be confusing. The actual sequela is coded first. Then, the healed injury or condition that caused the residual is coded secondary with the letter “S.” This 7th character “S” identifies that the primary code is the actual sequela of the injury code. If the sequela is a manifestation code, then the causing condition is coded first.

Sequela examples:

• Polyneuropathy due to chemotherapy
  • 0 Drug-induced polyneuropathy
  • 1X5S Adverse effect of antineoplastic and immunosuppressive drugs, sequela
• Chronic osteomyelitis of the right femur due to healed right hip fracture
  • 651 Other chronic osteomyelitis, right thigh
  • 91XS Unspecified fracture of right femur, sequela

Example 2: A female patient with osteoporosis fell while gardening. She went to her PCP after two days of foot pain. The PCP immobilized the foot and referred her to a radiology center for a foot X-ray. The study came back with a radiology interpretation of a fracture of the right hallux. The patient was then referred to an orthopedist. In the first evaluation, the specialist established a healing plan and took follow-up X-rays to assess the fracture healing progress in two months. He indicated that the fracture was healing well. A couple of weeks later, the immobilizer was removed, and the patient required physical therapy to improve flexibility and movement of the affected foot

Reference:

AAPC Local Chapter Newsletter December 2021