CurrentmemorialcareselecthealthplanPolicy N/A

ICD-10/NCCI diagnosis coding edits and claim denial guidance

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Governs diagnosis coding requirements aligned with CMS NCCI and ICD-10 standards for participating providers submitting claims to MemorialCare Select Health Plan; includes guidance on causes for denials and remediation steps. Affects physicians, participating physician groups, hospitals, and ancillary providers (with county-specific note for Medi-Cal).

Policy Summary

Payermemorialcareselecthealthplan

PolicyICD-10/NCCI diagnosis coding edits and claim denial guidance

Policy CodePolicy N/A

Change TypeNotice / coding update

Effective DateMar 1, 2021

Next Review DateN/A

Key ActionSubmit corrected claims or appeals as outlined in the provider operations manuals via the Provider Library after logging into the Health Net provider portal.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Since Mar 1, 2021Review start

9Medi‑Cal counties

MultipleDenial codes

60 daysContact timeframe

Diagnosis Coding and Claim Submission Criteria

Diagnosis coding requirement criteria

Coding and claim submission requirements and edits that may result in denials if not followed:

Claims must follow NCCI standards and ICD-10 coding requirements; Health Net began reviewing claims for these correct coding edits effective March 1, 2021.

Diagnosis codes must be assigned to the highest level of specificity valid for the date of service; invalid, incomplete, not active, or non‑existent ICD‑10 codes for the DOS will trigger edits and may result in denial.

Do not sequence external cause codes (e.g., V, W, X, Y, etc.) as the first‑listed/principal diagnosis; claims with external cause codes billed first will be subject to editing and possible denial.

Sequela and manifestation coding must be correctly sequenced: the condition or nature of the sequela should be listed first followed by the sequela code; manifestation codes should not be billed as the primary diagnosis.

E/M with preventive services and use of ICD‑10 Z codes: Z codes describe encounters for routine examinations and should not be used when the visit is for diagnosis or treatment of a suspected condition; preventive services billed with E/M may require appropriate diagnosis coding or will be edited.

Denial codes that may appear on the remittance advice

EXwd: diagnosis code incorrectly coded per ICD‑10 Manual.
Denial code 255 (coding edit).

Chemotherapy/immunotherapy diagnosis requirement

When a chemotherapy CPT code is present on a professional or facility claim, Z51.11 (Encounter for antineoplastic chemotherapy) or Z51.12 (Encounter for antineoplastic immunotherapy) must be the Primary/First‑Listed/Principal diagnosis unless the therapy is for a non‑neoplastic condition or the Primary diagnosis is Z51.0 (Encounter for antineoplastic radiation therapy).
If the required primary diagnosis for chemotherapy/immunotherapy is missing, the claim line will be edited and may be denied.

Secondary diagnosis billed in the first position, missing required secondary diagnosis for chemotherapy, or preventive service missing diagnosis when billed same day as E/M are specific edit conditions that will generate denials if not corrected.

Denial Codes and Specific Diagnosis Rules

Notices of specific denial codes and chemotherapy diagnosis requirementsICD-10Covered

EXwd	Denial code: diagnosis code incorrectly coded per ICD-10 Manual.
255	Denial code referenced for coding edits.
Z51.11	Encounter for antineoplastic chemotherapy — must be Primary/First‑Listed/Principal diagnosis when a chemotherapy CPT code is present unless therapy is for a non‑neoplastic condition or primary diagnosis is Z51.0.
Z51.12	Encounter for antineoplastic immunotherapy — must be Primary/First‑Listed/Principal diagnosis when an immunotherapy CPT code is present unless therapy is for a non‑neoplastic condition or primary diagnosis is Z51.0.

Claims Correction, Appeals, and Compliance Actions

Documentation Required

Claim corrections and appeals — follow provider operations manuals

Providers may submit the corrected claim or submit an appeal or reconsideration request as outlined in the provider operations manuals. The provider operations manuals are available in the Provider Library after logging into the Health Net provider portal (http://providerlibrary.healthnetcalifornia.com).

Submit corrected claims following the process in the provider operations manuals.
Submit appeals or reconsideration requests per the provider operations manuals.
Access the Provider Library by logging into the Health Net provider portal to find the manuals.

Denial Risk

NCCI compliance required — Health Net will review coding edits

Participating providers must adhere to CMS National Correct Coding Initiative (NCCI) standards; Health Net will begin reviewing claims for correct coding edits to align with NCCI and ICD-10, and noncompliance may result in claim denials.

Use NCCI standards and ICD-10 guidance when assigning diagnosis codes.
Refer to the ICD-10 Manual for code sources and details before resubmitting denied claims.
Beginning March 1, 2021, Health Net will review claims for these correct coding edits.

Key Definitions

inv-05: National Correct Coding Initiative (NCCI)

DefinitionNational Correct Coding Initiative (NCCI): CMS program promoting correct coding methodologies to reduce improper coding.

ApplicabilityParticipating providers are required to adhere to NCCI standards to prevent denial of claims.

Effective review dateHealth Net began reviewing for correct coding edits on March 1, 2021.

Reference guidanceCoding requirements reference the ICD-10 Manual for code sources and detailed coding guidance.

PurposeReduce improper coding and prevent claim denials by applying correct coding edits aligned with NCCI and ICD-10.

inv-06: ICD-10 'Z' codes

DefinitionICD-10 'Z' codes: Factors Influencing Health Status and Contact with Health Services used to describe encounters for routine examinations (e.g., general check-up, administrative exams, pre-employment physical).

Do not use whenDo not use Z codes when the examination is for diagnosis of a suspected condition or for treatment purposes; in those cases, report the specific diagnosis code from the appropriate chapter.

When discovered during routine examIf a diagnosis or condition is discovered during a routine exam, report that condition as an additional code (not in place of the Z code).

E/M and preventive services noteZ codes can trigger edits when billed with E/M preventive services; preventive service missing diagnosis codes may occur if billed on same day as E/M.

Policy Summary

Payermemorialcareselecthealthplan

PolicyICD-10/NCCI diagnosis coding edits and claim denial guidance

Policy CodePolicy N/A

Change TypeNotice / coding update

Effective DateMar 1, 2021

Next Review DateN/A

Key ActionSubmit corrected claims or appeals as outlined in the provider operations manuals via the Provider Library after logging into the Health Net provider portal.

SourceLink

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ICD-10/NCCI diagnosis coding edits and claim denial guidance

Customize your policy alerts

Sign up for all memorialcareselecthealthplan policy alerts

Know when memorialcareselecthealthplan releases new policies or updates existing guidance.

Monitor payer policy activity

Receive email alerts as soon as relevant payer policies are published or updated.

Diagnosis Coding and Claim Submission Criteria

Diagnosis coding requirement criteria

Coding and claim submission requirements and edits that may result in denials if not followed:

Claims must follow NCCI standards and ICD-10 coding requirements; Health Net began reviewing claims for these correct coding edits effective March 1, 2021.

Do not sequence external cause codes (e.g., V, W, X, Y, etc.) as the first‑listed/principal diagnosis; claims with external cause codes billed first will be subject to editing and possible denial.

Denial codes that may appear on the remittance advice

EXwd: diagnosis code incorrectly coded per ICD‑10 Manual.
Denial code 255 (coding edit).

Chemotherapy/immunotherapy diagnosis requirement

When a chemotherapy CPT code is present on a professional or facility claim, Z51.11 (Encounter for antineoplastic chemotherapy) or Z51.12 (Encounter for antineoplastic immunotherapy) must be the Primary/First‑Listed/Principal diagnosis unless the therapy is for a non‑neoplastic condition or the Primary diagnosis is Z51.0 (Encounter for antineoplastic radiation therapy).
If the required primary diagnosis for chemotherapy/immunotherapy is missing, the claim line will be edited and may be denied.

Denial Codes and Specific Diagnosis Rules

Notices of specific denial codes and chemotherapy diagnosis requirementsICD-10Covered

EXwd	Denial code: diagnosis code incorrectly coded per ICD-10 Manual.
255	Denial code referenced for coding edits.
Z51.11	Encounter for antineoplastic chemotherapy — must be Primary/First‑Listed/Principal diagnosis when a chemotherapy CPT code is present unless therapy is for a non‑neoplastic condition or primary diagnosis is Z51.0.
Z51.12	Encounter for antineoplastic immunotherapy — must be Primary/First‑Listed/Principal diagnosis when an immunotherapy CPT code is present unless therapy is for a non‑neoplastic condition or primary diagnosis is Z51.0.

Claims Correction, Appeals, and Compliance Actions

Documentation Required

Claim corrections and appeals — follow provider operations manuals

Submit corrected claims following the process in the provider operations manuals.
Submit appeals or reconsideration requests per the provider operations manuals.
Access the Provider Library by logging into the Health Net provider portal to find the manuals.

Denial Risk

NCCI compliance required — Health Net will review coding edits

Use NCCI standards and ICD-10 guidance when assigning diagnosis codes.
Refer to the ICD-10 Manual for code sources and details before resubmitting denied claims.
Beginning March 1, 2021, Health Net will review claims for these correct coding edits.

Key Definitions

inv-05: National Correct Coding Initiative (NCCI)

DefinitionNational Correct Coding Initiative (NCCI): CMS program promoting correct coding methodologies to reduce improper coding.

ApplicabilityParticipating providers are required to adhere to NCCI standards to prevent denial of claims.

Effective review dateHealth Net began reviewing for correct coding edits on March 1, 2021.

Reference guidanceCoding requirements reference the ICD-10 Manual for code sources and detailed coding guidance.

PurposeReduce improper coding and prevent claim denials by applying correct coding edits aligned with NCCI and ICD-10.

inv-06: ICD-10 'Z' codes

When discovered during routine examIf a diagnosis or condition is discovered during a routine exam, report that condition as an additional code (not in place of the Z code).

E/M and preventive services noteZ codes can trigger edits when billed with E/M preventive services; preventive service missing diagnosis codes may occur if billed on same day as E/M.