Invalid Diagnosis Code Editing for CMS-1500 Claim Form
To edit diagnosis (ICD-9) codes accurately for validity, Medicare systems were updated to apply date range edits beginning October 1, 2002. Effective April 1, 2005, pre-pass editing was implemented to prevent invalid ICD-9 codes from being processed and forwarded to the Coordination of Benefits trading partners. The April 2005 implementation was specific to electronic claims. For more information about the April 2005 update, see the following Website:
http://www.cms.hhs.gov/transmittals/Downloads/R326CP.pdf 
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For claims processed July 31, 2006, and after for any date of service, this diagnosis editing will extend to claim submissions on the CMS-1500 form. If any of the submitted diagnosis codes are invalid, the entire claim will be rejected and returned as unprocessable.
Health Insurance Portability and Accountability Act (HIPAA) rules require Medicare ensures submitted diagnosis codes are HIPAA-compliant, especially because these diagnosis codes are passed on to other payers under Medicare's Coordination of Benefits processes. To be compliant, the diagnosis code must be valid on the date for which it is reported.
Providers should ensure their billing staff know the rules for submitting diagnosis codes for Medicare claims. Only diagnosis codes that are in compliance with HIPAA should be submitted on Medicare claims.
