ICD-10 DRG Audit Target Areas – PCS Spotlight – Root Operation: Transfer

Provident has been engaged in ongoing DRG audits since ICD-10 was implemented in October 2015. We have identified potential DRG audit target areas related to our audit work, changes to the ICD-10 codeset, and Coding Clinic updates. We will be posting cases regularly in our newsletter. Please see this edition’s case study below:

Case Summary

Patient is a 67-year-old female with a history of squamous cell carcinoma (SCCA) of the lip and morbid obesity with a BMI of 43.2 presents to the hospital for removal of the lesion.

Operative report (excerpt):

…the lip lesion was 2.5 cm covering half of the left lower lip.  Due to the size of the defect (once excised), closure was done with skin rearrangement.  Extension of the incision was made on the inferior lateral & medial portion for advancement of the flaps.

DRG Options

Audit Considerations & Strategies

  • The coder originally only assigned PCS code 0CB1XZZ – Excision of lower lip, external approach which groups to DRG 580 – Other skin, sub-Q tissue and breast PX W CC
  • Our review resulted in the recommendation to add code 0HX1XZZ – Transfer face skin, external approach because the skin rearrangement and the advancement flaps meet the definition for the PCS root operation “Transfer” and the closure was above and beyond a normal wound closure
  • Coders always have to consider the guidance in the ICD-10 Official Coding Guidelines that, “Components of a procedure specified in the root operation definition and explanation are not coded separately. Procedural steps necessary to reach the operative site and close the operative site, including anastomosis of a tubular body part, are also not coded separately.”
  • Per the ICD-10-PCS Reference Manual: The root operation Transfer is used to represent procedures where a body part is moved to another location without disrupting its vascular and nervous supply. In the body systems that classify the subcutaneous tissue, fascia and muscle body parts, qualifiers can be used to specify when more than one tissue layer was used in the transfer procedure, such as a musculocutaneous flap transfer
  • According to Coding Clinic 4th Quarter 2014, page 40, “The flap closure meets the definition of the root operation, “Transfer”, since the flap was transferred and remained attached to its vascular supply”
  • Adding the Transfer PCS code shifts the DRG to 577 Skin graft except for skin ulcer or cellulitis W CC
  • Whenever coding excisions, always pay close attention to the method of closure, if a non-routine or extensive closure is performed and the documentation supports a “Transfer”, ensure a code for the Transfer is captured


  1. ICD-10-PCS Reference Manual (Latest version: October 2015) Page 57
  2. APR with Flap Closure of Perineum and Colostomy Coding Clinic – 4th Quarter 2014: Page 40
  3. ICD-10-PCS Official Guidelines for Coding and Reporting (Effective Oct 1, 2017) B3.1b

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