We’ve heard some comments about payer edits that are citing Excludes1 instructional notations as the reason for denials. Excludes1 notations have been around since the beginning of the implementation of ICD-10-CM, but only recently have these types of edits become more common. One example of this change is an announcement by Anthem BC/BS on April 1, 2021 which states:

Beginning with dates of service on or after April 1, 2021, Anthem will be implementing revised claims editing logic tied to Excludes 1 notes from ICD-10-CM 2020 coding guidelines. To help ensure the accurate processing of claims, use ICD-10-CM coding guidelines when selecting the most appropriate diagnosis for member encounters. Please remember to code to the highest level of specificity. For example, if there is an indication at the category level that a code can be billed with another range of codes, it is imperative to look for Excludes 1 notes that may prohibit billing a specific code combination.

[I]f you believe an Excludes 1 note denial is incorrect, please consult the ICD-10-CM code book to verify appropriate use of the billed codes and provide supporting documentation through the normal dispute process as to why the billed diagnoses codes are appropriately used together.

The ICD-10-CM Official Guidelines for Coding and Reporting (beginning in October 2016) state the following about the two different types of excludes (emphasis added):


A type 1 Excludes note is a pure excludes. It means 'NOT CODED HERE!' An Excludes1 note indicates that the code excluded should never be used at the same time as the code above the Excludes1 note. An Excludes1 is used when two conditions cannot occur together, such as a congenital form versus an acquired form of the same condition.

An exception to the Excludes1 definition is the circumstance when the two conditions are unrelated to each other. If it is not clear whether the two conditions involving an Excludes1 note are related or not, query the provider. For example, code F45.8, Other somatoform disorders, has an Excludes1 note for "sleep related teeth grinding (G47.63)," because "teeth grinding" is an inclusion term under F45.8.

Only one of these two codes should be assigned for teeth grinding. However psychogenic dysmenorrhea is also an inclusion term under F45.8, and a patient could have both this condition and sleep related teeth grinding. In this case, the two conditions are clearly unrelated to each other, and so it would be appropriate to report F45.8 and G47.63 together.


A type 2 excludes note represents 'Not included here'. An excludes2 note indicates that the condition excluded is not part of the condition it is excluded from but a patient may have both conditions at the same time. When an Excludes2 note appears under a code it is acceptable to use both the code and the excluded code together.

— Section 1;A.12

At first glance, if only the first paragraph were used as the criteria, it might seem that you never include anything in the Excludes1 for that code combination; however, as noted in red, there is an exception which does not appear in the Tabular List. That exception applies to reporting conditions that are unrelated to each other. In that case, they CAN be reported together, but it will be up to the documentation to clearly identify that such a situation exists. 

Historically speaking, back in October 2015, the Centers for Disease Control and Prevention (CDC) published some “interim advice” which addressed this issue and was approved by several organizations including CMS. The problem was that there were situations identified where coding both codes IS possible. They stated:

If the two conditions are not related to one another, it is permissible to report both codes despite the presence of an Excludes1 note. For example, the Excludes1 note at code range R40-R46, states that symptoms and signs constituting part of a pattern of mental disorder (F01-F99) cannot be assigned with the R40-R46 codes. However, if dizziness (R42) is not a component of the mental health condition (e.g., dizziness is unrelated to bipolar disorder), then separate codes may be assigned for both dizziness and the mental health condition.

In another example, code range I60-I69 (Cerebrovascular Diseases) has an Excludes1 note for traumatic intracranial hemorrhage (S06.-). Codes in I60-I69 should not be used for a diagnosis of traumatic intracranial hemorrhage. However, if the patient has both a current traumatic intracranial hemorrhage and sequela from a previous stroke, then it would be appropriate to assign both a code from S06- and I69-.

It is important to note that over time, many Excludes1 have changed to an Excludes2. In fact, after that original advice was published, the Excludes1 note for R40-R46 changed to an Excludes2, but the Excludes1 for the I60-I69 remains as of the date of this publication. Over the years, other changes have taken place and continue to do so. For example, on October 1, 2021 for FY 2022, the following are just two examples of situations where an Excludes1 changed to an Excludes2:

E21 Hyperparathyroidism and other disorders of parathyroid gland

Delete Excludes1: familial hypocalciuric hypercalcemia (E83.52

Add Excludes2: familial hypocalciuric hypercalcemia (E83.52)

E63 Other nutritional deficiencies 

Delete Excludes1: dehydration (E86.0), failure to thrive, adult (R62.7), failure to thrive, child (R62.51), feeding problems in newborn (P92.-), sequelae of malnutrition and other nutritional deficiencies (E64.-) 

Add Excludes2: dehydration (E86.0), failure to thrive, adult (R62.7), failure to thrive, child (R62.51), feeding problems in newborn (P92.-), sequelae of malnutrition and other nutritional deficiencies (E64.-)

Excludes1 Error Action Plan

So what do you do when a payer denies your claim stating that it is an Excludes1 edit error? The first thing you need to do is to look at the official Tabular List for the date in question. Is there a problem with a change in the edits from Excludes1 to Excludes2? As long as your documentation clearly identifies why the two conditions are unrelated, be sure to use that information to appeal the claim.