ICD-10 Coding: New Character Surfaces in Spinal Fusion Codes

Original story posted on: November 26, 2018

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Are there “Zs” in your spinal fusion coding?

The fiscal year (FY) 2019 ICD-10-PCS updated an area that has not received much attention: Spinal fusion codes.

During the Centers for Medicare & Medicaid Services (CMS) Coordination and Maintenance Committee meeting in September 2017, the topic of invalid spinal fusion codes was raised.   There were spinal fusion codes which included the character “Z” for no device. According to ICD-10-PCS Official Coding and Reporting Guidelines B3.10a – B3.10c, spinal fusions require a device.   In response to this observation, 87 ICD-10-PCS codes were deleted because they contained the no device character.   These codes did not meet the ICD-10-PCS definitions.

The device “Zs” created another issue. If there was no device, then spinal fusion was not the correct procedure.   What procedure codes should have been used to code these cases?   How does this error impact the Medicare Severity Diagnosis Related Groups (MS-DRG)?   When spinal fusion is assigned, the most frequent MS-DRG is 460 with relative weight (RW) of 4.0375.     If the procedure was actually a release of the spinal cord, then the MS-DRG would be 520 with relative weight 1.3141.     If the procedure was a reposition of the spinal cord or insertion of internal fixation device without reposition, then the MS-DRG is 517 with relative weight of 1.3809.     The relative weights do not sound impactful, but when converted to dollars the impact is astounding.

The average payment for spinal fusion (MS-DRG 460) is $28,882.77 with the average Medicare payment of $24,458.68.   According to the National Summary of Inpatient Charge Data by MS-DRGs for FY16, the frequency was 79,495.   The total Medicare payment for this MS-DRG is $1,944,342,766.60.     Compare this number to the average payment for MS-DRG 520 which is $9,208.77 with the average Medicare payment of $6,944.51.   If 10 percent of these cases were incorrectly assigned, then there would be a payback of $139,160,426.84 which is a significant chunk of change.   This number is arrived at by taking 10 percent of 79,495 which is 7,945.50 and multiplying it by the difference between $24,458.88 and $6,944.51.

It is important to understand this risk and evaluate your exposure.   The first step to identifying your risk is identifying if you have submitted on a claim any of the ICD-10-PCS codes which included no device.   You might want to narrow your population by reviewing all claims in the Spinal Fusion MS-DRGs (453 – 460, 471 – 473).   The second step is to complete a second review of these cases to determine what the correct ICD-10-PCS code would be for each identified case.     The third step is to understand your level of exposure.   Identify the total number of cases as well as what is the reimbursement impact of the MS-DRG shift.     When you completed that analysis, it is time to contact the compliance officer to determine the best course of action for your facility.     In my opinion, it is best to be proactive regarding identified issues.

The last step is to undergo spinal fusion education.   The Official ICD-10-PCS Guidelines tell us that the physician is not expected to use the terminology of the classification system.   That job belongs to the coders.   The coders should understand that all spinal fusions require a device – autograft, allograft, or interbody fusion device.   If a device does not exist, then a different root operation should be selected.   That selection is dependent on the goal of the operation.  

Some different root operations to consider include Reposition, Release, and Insertion.   Reposition would address spinal curvatures without the use of graft or interbody fusion device.   The surgeon applies force through hooks to make the spinal column straighter.   Release is when decompressive laminectomies are performed or other procedures with the goal of releasing pressure on the spinal cord. Insertion would be appropriate when rods and screws are the only devices used for the “fusion.”   The rods and screws would be considered Internal Fixation devices.

In summary, determine if you are at risk with the correction to ICD-10-PCS.   Educate your coders regarding the correct code assignment for spinal fusion cases – not every documented spinal fusion is actually a spinal fusion in ICD-10-PCS world.   Be proactive with any findings by involving the compliance officer.    

Find the “Zs” in your old spinal fusions and address them!


MS-DRG Definitions Manual FY19:




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Laurie Johnson, MS, RHIA, CPC-H, FAHIMA, AHIMA-Approved ICD-10-CM/PCS Trainer

Laurie M. Johnson, MS, RHIA, FAHIMA is currently a senior healthcare consultant for Revenue Cycle Solutions, based in Pittsburgh, Pa. Laurie is an American Health Information Management Association (AHIMA) approved ICD-10-CM/PCS trainer. She has more than 35 years of experience in health information management and specializes in coding and related functions. She has been a featured speaker in over 40 conferences. Laurie is a member of the ICD10monitor editorial board and makes frequent appearances on Talk Ten Tuesdays.

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