ICD-10 introduces ICD-10-PCS codes apart from ICD-10-CM for reporting procedures with a view to reduce claim denials and maximise the reimbursement obtained.

1. ICD-10-PCS Codes – Definition,
Use and Importance
ICD-10 introduces ICD-10-PCS codes apart from ICD-10-CM
for reporting procedures.
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Apart from ICD-10-CM (Clinical Modification) codes, ICD-10-PCS codes will also be
introduced into the American healthcare system with the upcoming ICD-10 transition in
October. ICD-10-PCS is a totally separate medical coding system from ICD-10-CM even
though it provides increased specificity. This procedure coding system will replace ICD-
9-CM, volume 3 and will only be used to report procedures performed in a hospital
inpatient setting unlike the ICD-10-CM codes that will be used for inpatient and
outpatient diagnoses.
Several guidelines were followed while developing ICD-10-PCS codes such as diagnostic
information not included in procedure description, explicit not otherwise specified (NOS)
are not provided, limited use of not elsewhere classified (NEC) option and higher level of
specificity. ICD-10-PCS has a seven character alphanumeric code structure with each
character indicating up to 34 different values (ten digits 0-9 and 24 letters while the
letters “O” and “I” are excluded to avoid confusion with the numbers “0” and “1). The
procedures are divided into sections that relate to a type of procedure (for example,
medical and surgical). The first character of an ICD-10-PCS code always indicates the
section. There would be a standard meaning for second through seven characters within
each section. However, they may have different meanings across sections. We will see
certain sections and explore what the seven characters represent in each of these
sections.
Medical and Surgical
 First character: Section
 Second character: General body system (for example, central nervous system,
gastrointestinal system)
 Third character: Root operation (for example, alteration, bypass, excision,
drainage)

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 Fourth character: Body part (the specific part where the procedure was
performed)
 Fifth character: Approach (for example, open, percutaneous)
 Sixth character: Device
 Seventh character: Qualifier (has a unique meaning for individual procedures)
Placement
 First character: Section
 Second character: Anatomical regions or orifices
 Third character: Root operation (inclusive of additional root operations such as
compression, dressing, traction, packing and immobilization)
 Fourth character: Body region or orifice
 Fifth character: Approach
 Sixth character: Device
 Seventh character: Qualifier
Administration
 First character: Section
 Second character: Physiological Systems and Anatomical Regions
 Third character: Root operation (Introduction, Irrigation and Transfusion)
 Fourth character: Body/System Region
 Fifth character: Approach

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 Sixth character: Substance being introduced (anesthetics, contrast, or dialysate,
plus blood products)
 Seventh character: Qualifier
Measurement and Monitoring
 First character: Section
 Second character: Physiological System
 Third character: Root operation (Measurement, Monitoring)
 Fourth character: Body System
 Fifth character: Approach
 Sixth character: Function (precise physiological or physical function being
measured or monitored)
 Seventh character: Qualifier
Imaging
 First character: Section
 Second character: Body System
 Third character: Root Type (for example, MRI, Ultrasound)
 Fourth character: Body Part
 Fifth character: Contrast (type of contrast material used in the imaging
procedure such as high or low osmolar)
 Sixth character: Contrast/Qualifier (further details about the contrast material)
 Seventh character: Qualifier

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Radiation Oncology
 First character: Section
 Second character: Body System
 Third character: Modality or type of radiation used (for example, photons,
electrons)
 Fourth character: Treatment Site (body part, which is the target of radiation
therapy)
 Fifth character: Ports used or Isotopes introduced into the body
 Sixth character: Device
 Seventh character: Qualifier/Risk Structures (body parts that may be exposed to
radiation and must be taken into account)
Who Will Use These Codes?
You should note that the ICD-10-PCS will not replace the Current Procedure Terminology
(CPT) coding system. Generally, CPT codes will be used for reporting outpatient
procedures and ICD-10-PCS codes will be used for reporting inpatient procedures.
However, physicians, ambulatory surgery centers, nursing homes and emergency
departments are not required to use ICD-10-PCS codes. These codes are only required
for hospital inpatient setting.
Physicians who perform surgeries in a hospital inpatient setting will still report their
services applying CPT codes on the CMS-1500 claim form while hospitals will report
using ICD-10-PCS codes on the UB-04 claim form. The ICD-10-PCS coding system is much
more specific than ICD-9-CM Volume 3 procedure codes for hospital inpatient
procedures and therefore additional queries may be received by the physicians for

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specificity in procedures. On the whole, hospitals will require medical coders trained in
CPT codes and ICD-10-PCS codes after the ICD-10 implementation. Medical billing and
coding companies provide the necessary support to providers who find it difficult to
maintain the balance between administrative work and patient care.
Importance of ICD-10-PCS
There are four main objectives behind the development of ICD-10-PCS such as:
 Completeness – While using ICD-9-CM Volume 3 code set, the same code is
sometimes assigned to procedures on different body parts, with different
approaches, or of different types. The procedure coding system will have a
unique code for all substantially different procedures.
 Expandability – Rapid and constant changes have been occurring in medical
procedures and technology. With higher level of specificity, the procedure
coding system can easily incorporate new procedures developed as unique codes.
Even so, procedures, lab tests and education sessions not unique to inpatient,
hospital settings have been omitted from this system.
 Multi-axial – ICD-10-PCS has a multi-axial structure with each code character
having the same meaning within a specific procedure section and across
procedure section to the extent possible.
 Standardized Terminology – Though the meaning of specific words can vary in
common usage, there is no multiple meanings for the same term in the
procedure coding system. Each term is assigned a specific meaning and hence
provides a standardized terminology.
Overall, ICD-10-PCS helps healthcare providers report their services more specifically
and ensure that their claims are accurate. Though additional details may be required,
claim denials can be reduced and maximum reimbursement obtained.