Internal Classification of Diseases (ICD) Code Brief


Internal Classification of Diseases (ICD) codes were originally developed for epidemiological purposes, but have now become an important tool in the reimbursement system. The ICD code is owned by the World Health Organization (WHO) and is managed by The National Center for Health Statistics (NCHS) in the United States. “While ICD codes are still used to track the incidence and spread of diseases and injury, their most important facet today is demonstrating medical necessity in claims. In other words, ICD codes explain to the insurance payer why the doctor performed a certain procedure.” The main goal when using the ICD coding system is to code to the highest level of specificity. In other words, a coder should always get to the most granular level of classification detail.

Currently, the United States is using a combination of the ICD-9 and ICD-10 code system. Ideally, the ICD code is set to be updated every 10-15 years. Until recently, the United States was significantly behind other countries to adopt the latest code, with some using ICD-10 as early as the year 2000. In the United States, the ICD-10 code began in October 2015 and is set to completely take over ICD-9 during a two-year transition period.

The upgrade from ICD-9 to ICD-10 involved more than just an update or addition to existing codes. In fact, the number of billing codes increased from 13,000 to 68,000. Along with this tremendous increase in codes, there were also formatting and organization changes. The expansive diagnostic codes were intended to smooth billing processes and assist in population health and cost reduction across the health care delivery system. “ICD-10 is also more flexible, and was designed in such a way that eases the entrance of codes for new, recently discovered, or expanded diagnoses.” ICD-10 has enabled significant improvements in care management, public health reporting, research, and quality measurement.

Each code can be broken down into sections describing the specific classification (e.g. A01.021S):

  • Category: Letter followed by two numbers (general type of injury/disease)
  • Decimal Point
    • Subcategory: Simple vs. Complex
      • Subclassifications x2: Further explain cause, manifestation, location, severity, and type of injury/disease
        • Extension: Letter describing type of encounter (initial or subsequent)

The ICD-10 code manual is organized into three volumes:

  • Volume I: Tabular Index
  • Volume II: Alphabetic Index
  • Volume III: Hospital Procedure Codes


Learn More

For more information on ICD-10 medical billing and coding, click here.