By: Tami Shaw, Client Manager
At Lighthouse Lab Services, we’re committed to providing our clients with the insights and best practices needed to navigate the complexities of Revenue Cycle Management (RCM).
Lately, we’ve received several inquiries from clients regarding claim denials and remark codes related to “Excludes 1” and “Excludes 2” notations. Although these notations have been part of the AAPC Coding manuals for quite some time, the recent shift lies in payers like Select Health and Humana incorporating these classifications into their claims processing software, leading to more frequent denials based on diagnosis exclusivity.
What Are “Excludes 1” and “Excludes 2” Notations?
Excludes 1 and Excludes 2 are two types of exclusion classifications that flag potential conflicts in coding. These notations are critical to understanding why certain codes on a claim may be considered incompatible by payers, resulting in denials.
Excludes 1 indicates that two conditions listed together on a claim are mutually exclusive and should not be coded together. This can occur when a claim includes two codes for the same condition, with one code being a more specific version of the other. For example:
- 29: Other Chronic Pain
- 4: Chronic pain associated with significant psychosocial dysfunction
In this case, G89.4 is more descriptive than G89.29. Including both codes on the same claim would trigger an Excludes 1 denial, as the system recognizes that only one of these codes should be used to describe the patient’s condition.
Excludes 2 allows for the possibility that two conditions could be reported together if the patient indeed has both, and no other coding restrictions apply. When faced with an Excludes 2 denial, it’s essential to review the medical record and ensure that all diagnoses listed on the claim accurately reflect the provider’s documentation. An example of an Excludes 2 scenario might involve a patient with both osteoarthritis of the right wrist and osteoarthritis of the spine. While the system may flag this as an exclusion, you can appeal the denial by providing documentation that supports the presence of both conditions.
Dealing with Dual Excludes 1 and Excludes 2 Denials
In some cases, a claim may trigger both Excludes 1 and Excludes 2 denials. Consider the following scenario:
- 1: Opioid Abuse
- 2: Opioid Dependence
- 0: Poisoning by adverse effect of underdosing opium
Here, F11.1 and F11.2 would conflict because F11.2 is a more descriptive version of F11.1, leading to an Excludes 1 denial. However, the combination of F11.2 and T40.0, while less common, could be relevant in certain cases, such as a patient being both opioid-dependent and experiencing an adverse effect from an underdose of opium. In this case, you could appeal the Excludes 2 denial by providing detailed documentation to support the claim.
Key Takeaways
Understanding the nuances of Excludes 1 and Excludes 2 denials is crucial for effective claim management. While Excludes 2 is more forgiving and offers an opportunity for appeal with proper documentation, Excludes 1 requires careful attention to coding accuracy to avoid conflicts. By regularly reviewing and updating your coding practices, and ensuring thorough documentation, you can minimize the risk of these denials and optimize your revenue cycle.
How Can Lighthouse Assist?
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