Excludes 1 vs Excludes 2 in ICD-10: What Every Coder Needs to Know

The Two Types of Excludes Notes

ICD-10-CM uses two types of Excludes notes that have very different meanings, as defined in the official CMS ICD-10-CM code set guidelines. Confusing them is one of the most common coding errors — and it can directly impact HCC capture and audit outcomes.

Excludes 1: "NOT CODED HERE"

An Excludes 1 note means the two conditions cannot occur together. If an Excludes 1 note appears under a code, you cannot use that code simultaneously with the excluded code.

The rule: The conditions are mutually exclusive. You must choose one or the other.

Example

Under J44.0 (COPD with acute lower respiratory infection):

This means a patient cannot have both J44.0 and J44.1 coded at the same time. If the patient has COPD with both an acute infection and an exacerbation, the coder must determine which condition is present based on documentation — or use a combination code if one exists.

Common Excludes 1 Mistakes

Excludes 2: "NOT INCLUDED HERE"

An Excludes 2 note means the excluded condition is not part of the current code but can occur together with it. If the patient has both conditions, you should code both.

The rule: The conditions can coexist. Code both if documented.

Example

Under I10 (Essential hypertension):

This means I10 does not include secondary hypertension, but a patient could theoretically have both essential and secondary hypertension. If both are documented, both should be coded.

Why Excludes 2 Matters for HCC Coding

Excludes 2 notes often indicate opportunities for additional HCC capture. When a coder sees an Excludes 2 note, it is a signal to check the documentation for the excluded condition — because if it is present and documented with MEAT criteria, it should be coded separately.

Quick Reference

Real-World Scenarios

Scenario 1: Diabetes with Manifestations

A patient has Type 2 Diabetes with diabetic nephropathy (E11.21) and also has chronic kidney disease stage 3 (N18.3).

Scenario 2: Heart Failure Types

A patient has both systolic and diastolic heart failure.

How HCC Buddy Displays Excludes Notes

In HCC Buddy's encoder, every code detail view shows:

This makes it easy to spot both restrictions and opportunities without flipping through the codebook.

Look up any code and see its Excludes notes at hccbuddy.com/encoder.