Our first blog post in this ICD-10 guidelines series discusses the ICD-10 honeymoon period and the first reason why many billing systems will fail later this year: over-reliance on simple GEMS mapping alone as the way to convert ICD-9 to ICD-10. We used the simple example of a decubitus ulcer of the heel and displayed how GEMS mapping alone did not get to the level of specificity required to perfectly match a code with the patient’s clinical condition.

Today’s blog post highlights another “must have” ICD-10 coding feature: Support for Code First and Excludes 1 & 2

Code First

ICD-10 has a coding convention that requires the underlying or causal condition be sequenced first followed by the manifested condition, which is referred to as the “code first” guideline.

Note the example we used in the first blog post of this series:
L89611: Pressure ulcer of right heel, stage 1

Sample Code First Tip


The sample tip above is a Code First alert that warns the provider that code L89604 cannot be billed without I96 coded first, these two codes must be billed together with I96 used first.

Excludes 1 & Excludes 2

(Content provided by Blue Cross of Michigan)

ICD-10-CM (diagnosis codes) has two types of excludes notes which are designated as Excludes 1 or Excludes 2.

– Excludes 1 means “NOT CODED HERE”

  • The two conditions cannot occur together
  • It is unacceptable to use both the code and the excluded code together

– Excludes 2 means “NOT INCLUDED HERE”

  • A patient may have both conditions at the same time
  • It is acceptable to use both the code and the excluded code together, when appropriate

Excludes 1 means “Not Coded Here”

The codes listed under the Excludes 1 note should never be used with the code listed above the Excludes 1 note.

Example: J03 Acute Tonsillitis

Excludes 1:

  • acute sore throat (J02.-)
  • hypertrophy of tonsils (J35.1)
  • peritonsillar abscess (J36)
  • sore throat NOS (J02.9)
  • streptococcal sore throat (J02.0)

In this example, code J03 – Acute Tonsillitis cannot be coded together with any of the codes listed under the Excludes 1.


When an Excludes 2 note appears under a code, it is acceptable to use both the code and any of the excluded codes that appear in the Excludes 2 note.

Example: M25.5 Pain in Joint

Excludes 2:

  • pain in hand (M79.64-)
  • pain in fingers (M79.64-)
  • pain in foot (M79.67-)
  • pain in limb (79.6-)
  • pain in toes (M70.67-)

In this example, code M25.5 – Pain in Joint may be coded together with any of the codes listed under the Excludes 2.

*Clearly we need to be much more aware of the Excludes 1 notes as they may lead to claim rejections.

Real time Code First and Exclude code guidance during the ICD coding process is another must-have feature. No one can remember every Code First and Exclude rule and therefore sophisticated software support for those complex sets of coding rules is the only way to avoid claim denials. Insist on a system that offers this level of support when considering the more stringent ICD-10 guidelines and rules that will begin later this year. In our final blog post of this series, we will discuss the impact that advanced search tools can have on finding the most specific code that describes your patients’ clinical condition.