Outpatient coding guidelines — Section IV
First-listed, not principal. Seventeen rules for hospital outpatient departments and provider offices — including the one rule that reverses inpatient practice entirely.
In the outpatient setting the term is first-listed diagnosis, not principal diagnosis — and uncertain diagnoses are never coded. The UHDDS definition of principal diagnosis does not apply to hospital-based outpatient services or provider-based office visits, and the inpatient rules for inconclusive diagnoses were developed for inpatient reporting and do not apply to outpatients.
Section I — conventions, general coding guidelines and chapter-specific guidelines — should also be applied for outpatient services and office visits. The terms encounter and visit are used interchangeably in Section IV without distinguishing one from the other.
The seventeen outpatient rules#
| Rule | What to do | |
|---|---|---|
| A | Selection of the first-listed condition | The coding conventions of ICD-10-CM and the general and disease specific guidelines take precedence over the outpatient guidelines. Diagnoses are often not established at the initial visit — it may take two or more visits before the diagnosis is confirmed. NEVER Never begin searching in the Tabular List; begin in the Alphabetic Index |
| A.1 | Outpatient surgery | Code the reason for the surgery as the first-listed diagnosis — even if the surgery is not performed due to a contraindication |
| A.2 | Observation stay | Admitted for observation for a medical condition → the medical condition is first-listed. Presents for outpatient surgery and develops complications requiring observation → the reason for the surgery is reported first, followed by the complications as secondary diagnoses |
| B | Code range | Use A00.0–T88.9, Z00–Z99 and U00–U85 to identify diagnoses, symptoms, conditions, problems, complaints or other reasons for the encounter |
| C | Accurate reporting | The documentation should describe the patient's condition using terminology that includes specific diagnoses as well as symptoms, problems, or reasons for the encounter |
| D | Symptom and sign codes | ALWAYS Acceptable for reporting when a diagnosis has not been established (confirmed) by the provider |
| E | Circumstances other than a disease or injury | The Z00–Z99 codes deal with occasions when circumstances other than a disease or injury are recorded as diagnoses or problems |
| F | Level of detail | A three-character code is used only if it is not further subdivided. A code is invalid if it has not been coded to the full number of characters required, including the 7th character if applicable. Code to the highest level of specificity supported by the documentation |
| G | The first-listed code | List first the code for the diagnosis, condition, problem or other reason for the encounter shown in the record to be chiefly responsible for the services provided. List additional codes for coexisting conditions. In some cases the first-listed diagnosis may be a symptom where a diagnosis has not been confirmed |
| H | Uncertain diagnosis | NEVER Do not code probable, suspected, questionable, rule out, compatible with, consistent with, working diagnosis or similar terms. Code the condition(s) to the highest degree of certainty for that encounter — symptoms, signs, abnormal test results, or other reason for the visit |
| I | Chronic diseases | Chronic diseases treated on an ongoing basis may be coded and reported as many times as the patient receives treatment and care for the condition |
| J | Coexisting conditions | Code all documented conditions that coexist at the time of the encounter and that require or affect patient care, treatment or management. NEVER Do not code conditions previously treated that no longer exist — though Z80–Z87 history codes may be secondary codes where the historical or family history condition impacts current care |
| K | Diagnostic services only | Sequence first the diagnosis, condition, problem or other reason chiefly responsible for the outpatient services. Other diagnoses such as chronic conditions may be additional. For routine laboratory or radiology testing with no signs, symptoms or associated diagnosis, assign Z01.89. If routine testing is done at the same encounter as a test to evaluate a sign, symptom or diagnosis, assign both the Z code and the code for the non-routine test |
| K | Interpreted diagnostic tests | EXCEPTION For outpatient encounters for diagnostic tests interpreted by a physician where the final report is available at the time of coding, code any confirmed or definitive diagnosis documented in the interpretation. NEVER Do not code related signs and symptoms as additional diagnoses. This differs from the inpatient practice for abnormal findings |
| L | Therapeutic services only | Sequence first the reason chiefly responsible for the outpatient services. EXCEPTION The only exception: where the primary reason for the encounter is chemotherapy or radiation therapy, the appropriate Z code for the service is listed first and the diagnosis or problem for which the service is performed is listed second |
| M | Preoperative evaluations only | 1Z01.81- Encounter for pre-procedural examinations2a code for the condition describing the reason for the surgery3any findings related to the pre-op evaluation |
| N | Ambulatory surgery | Code the diagnosis for which the surgery was performed. If the postoperative diagnosis is known to be different from the preoperative diagnosis at the time the diagnosis is confirmed, select the postoperative diagnosis — it is the most definitive |
| O | Routine outpatient prenatal visits | See Section I.C.15 — Z34 first-listed |
| P | General medical examinations with abnormal findings | Where a general medical examination results in an abnormal finding, the code for general medical examination with abnormal finding (Z00.0-, Z00.12-) is the first-listed diagnosis, with a secondary code for the abnormal finding. An examination with abnormal findings means a condition newly identified, or a change in severity of a chronic condition — such as uncontrolled hypertension or an acute exacerbation of COPD — found during a routine physical |
| Q | Routine health screenings | See Section I.C.21 — screening |
Practice questions#
Q1An office note for an outpatient visit documents “rule out gastro-oesophageal reflux disease” for a patient with heartburn. What is coded?
- AThe reflux disease code
- BThe heartburn symptom code
- CBoth codes
- DThe reflux code with an uncertain-diagnosis modifier
Show answer & rationale
Correct answer: B. The heartburn symptom code
Rationale. Section IV.H states that in the outpatient setting, diagnoses documented as probable, suspected, questionable, rule out, compatible with, consistent with or working diagnosis are not coded, and the condition is coded to the highest degree of certainty for that encounter — such as symptoms, signs, abnormal test results or other reason for the visit. The guideline notes explicitly that this differs from the coding practices used by short-term, acute care, long-term care and psychiatric hospitals.
Q2A patient presents for a scheduled outpatient cholecystectomy. The surgery is cancelled before it begins because of a contraindication discovered on the day. What is the first-listed diagnosis?
- AA code from
Z53 - BThe reason for the surgery
- CThe contraindication
- DNo code is reported
Show answer & rationale
Correct answer: B. The reason for the surgery
Rationale. Section IV.A.1 states that when a patient presents for outpatient surgery, also called same day surgery, the reason for the surgery is coded as the first-listed diagnosis, even if the surgery is not performed due to a contraindication. A Z53 code may be reported additionally to explain the circumstance.
Q3A patient has an outpatient chest radiograph for cough. The radiologist's final report, available at the time of coding, documents pneumonia. What is coded?
- AThe cough only
- BThe pneumonia only
- CThe pneumonia and the cough
- DThe cough first, then the pneumonia
Show answer & rationale
Correct answer: B. The pneumonia only
Rationale. Section IV.K states that for outpatient encounters for diagnostic tests that have been interpreted by a physician, and the final report is available at the time of coding, any confirmed or definitive diagnosis documented in the interpretation is coded, and related signs and symptoms are not coded as additional diagnoses. The guideline also notes that this differs from the coding practice in the hospital inpatient setting regarding abnormal findings on test results.
Q4A patient is seen solely for preoperative clearance before a planned hip replacement for osteoarthritis. No treatment is given. What is sequenced first?
- AThe osteoarthritis
- BA code from subcategory
Z01.81 - C
Z01.89 - DA code from
Z02
Show answer & rationale
Correct answer: B. A code from subcategory Z01.81
Rationale. Section IV.M states that for patients receiving preoperative evaluations only, sequence first a code from subcategory Z01.81, encounter for pre-procedural examinations, to describe the pre-op consultations, assign a code for the condition describing the reason for the surgery as an additional diagnosis, and code also any findings related to the pre-op evaluation. Section I.C.21.c.12 adds that pre-operative examination Z codes are for use only where a patient is being cleared for a procedure and no treatment is given.
Q5During a routine annual physical with no complaints, the provider identifies and documents a new condition. What is the first-listed diagnosis?
- AThe newly identified condition
- BThe code for general medical examination with abnormal findings
- CThe code for general medical examination without abnormal findings
- D
Z02.9
Show answer & rationale
Correct answer: B. The code for general medical examination with abnormal findings
Rationale. Section IV.P states that should a general medical examination result in an abnormal finding, the code for general medical examination with abnormal finding is assigned as the first-listed diagnosis, with a secondary code for the abnormal finding. An examination with abnormal findings refers to a condition newly identified or a change in severity of a chronic condition, such as uncontrolled hypertension or an acute exacerbation of COPD, found during a routine physical examination.
Scenarios#
A patient undergoes ambulatory laparoscopy for a preoperative diagnosis of ovarian cyst. The operative and pathology findings, confirmed and available at the time of coding, establish endometriosis instead.
Show coded answer & rationale
| Seq | Code | Description |
|---|---|---|
| 1 | N80.- | Endometriosis, the applicable site code — first-listed, because it is the postoperative diagnosis and the most definitive |
Rationale. Section IV.N states that for ambulatory surgery the diagnosis for which the surgery was performed is coded, and that if the postoperative diagnosis is known to be different from the preoperative diagnosis at the time the diagnosis is confirmed, the postoperative diagnosis is selected for coding, since it is the most definitive. The preoperative ovarian cyst is not reported, because it was not established.
Guideline: Section IV.N
A patient with breast cancer presents to the infusion centre for a scheduled cycle of intravenous chemotherapy. She also has well-controlled type 2 diabetes managed with metformin, addressed briefly at the visit.
Show coded answer & rationale
| Seq | Code | Description |
|---|---|---|
| 1 | Z51.11 | Encounter for antineoplastic chemotherapy — first-listed |
| 2 | C50.- | Malignant neoplasm of breast, the applicable site and laterality code |
| 3 | E11.9 | Type 2 diabetes mellitus without complications, if it required or affected care at this encounter |
| 4 | Z79.84 | Long term (current) use of oral hypoglycemic drugs |
Rationale. Section IV.L states that for patients receiving therapeutic services only, the reason chiefly responsible for the services is sequenced first, with the sole exception that where the primary reason for the encounter is chemotherapy or radiation therapy, the appropriate Z code for the service is listed first and the diagnosis or problem for which the service is performed is listed second. Section I.C.2.e.2 gives the same rule from the neoplasm chapter. Section IV.J permits coding coexisting conditions that require or affect patient care, treatment or management at that encounter.
Guideline: Section IV.L, IV.J; Section I.C.2.e.2
A patient presents for routine annual laboratory testing ordered at a previous visit. There are no signs, symptoms or associated diagnosis documented for the testing. At the same encounter a thyroid panel is drawn to evaluate documented fatigue.
Show coded answer & rationale
| Seq | Code | Description |
|---|---|---|
| 1 | Z01.89 | Encounter for other specified special examinations — for the routine testing |
| 2 | R53.83 | Other fatigue — the reason for the non-routine test |
Rationale. Section IV.K states that for encounters for routine laboratory or radiology testing in the absence of any signs, symptoms or associated diagnosis, Z01.89 is assigned, and that if routine testing is performed during the same encounter as a test to evaluate a sign, symptom or diagnosis, it is appropriate to assign both the Z code and the code describing the reason for the non-routine test. Section IV.D and Section I.B.18 support reporting the symptom where no definitive diagnosis has been established.
Guideline: Section IV.D, IV.K; Section I.B.18
Primary sources#
- ICD-10-CM Official Guidelines for Coding and Reporting, FY 2027CMS — the source document for every page on this site (effective 1 Oct 2026)
- NCHS ICD-10-CM files — Tabular List, Index, POA exempt listOfficial code files, addenda and the list of codes exempt from POA reporting
- ICD-10 Coordination and Maintenance CommitteeWhere code proposals are debated; agendas, summaries and meeting materials
- CMS ICD-10 homeCode sets, transition guidance and Medicare coding policy
- AHA Coding ClinicOfficial coding advice from the AHA Central Office — subscription required
- HHS OIG Work PlanActive audit topics — useful for prioritising internal coding audits
- MEDESUN Medical Coding AcademyTraining, credential preparation and audit services by the author