2025 ICD-10 Coding Updates for Physical Therapy

Every October 1st, physical therapists face a critical compliance deadline: the annual ICD-10-CM code update. For FY 2025 (covering October 1, 2024 through September 30, 2025), CMS introduced 252 new codes, 36 deletions, and 13 revisions—changes that directly impact your ability to get paid for the care you provide.

Using outdated or incorrect ICD-10 codes is one of the most common reasons for claim denials in physical therapy practices. In fact, coding errors account for an estimated $262 billion in denied claims annually across all healthcare sectors, with musculoskeletal laterality errors alone responsible for 28% of PT-related rejections.

This comprehensive guide breaks down the 2025 ICD-10 updates most relevant to physical and occupational therapy, explains why these changes matter for your practice, and shows how modern EMR systems like Proactive Chart automatically update code databases to keep you compliant.

Understanding ICD-10-CM: The Basics

Before diving into 2025 updates, let’s clarify what ICD-10-CM codes are and why they matter.

What Are ICD-10 Codes?

ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) is the standardized coding system used to classify and code all diagnoses, symptoms, and procedures recorded in conjunction with hospital care in the United States.

For physical therapists, ICD-10 codes answer the question: “Why are you treating this patient?”

ICD-10 vs. CPT Codes

Many therapists confuse these two code sets:

Both are required on every claim. You must use the correct ICD-10 code to justify the CPT codes you’re billing. For a complete understanding of CPT code selection and reimbursement, see our comprehensive guide to PT CPT codes for 2025.

Why Annual Updates Matter

The CDC and CMS update ICD-10-CM codes annually to:

• Reflect advances in medical knowledge and technology
• Improve specificity and accuracy in diagnosis reporting
• Align with quality measurement programs (like MIPS)
• Reduce ambiguity and improve claims processing

Critical compliance rule: You must use the ICD-10-CM codes in effect for the date of service. Using codes from the previous year will result in automatic claim denials.

FY 2025 ICD-10-CM Update Overview

The FY 2025 ICD-10-CM update (effective October 1, 2024) introduced significant changes across multiple body systems, with particular emphasis on conditions commonly treated in physical therapy.

By the Numbers

• 252 new codes added (including 33 musculoskeletal codes)
• 36 codes deleted (no longer valid for billing)
• 13 codes revised (changed descriptions or coding rules)
• Total code set: Over 72,000 diagnosis codes

Key Categories Affecting PT/OT

The 2025 update focused on enhanced specificity in these areas:

1. Musculoskeletal system disorders (M codes) - 33 new codes
2. Intervertebral disk disorders (M51) - 6 new codes
3. Synovitis and tenosynovitis (M65) - Multiple new fifth- and sixth-character codes
4. Pain syndromes - Improved laterality specifications
5. Injury codes (S codes) - Enhanced detail for fractures and trauma
6. Rehabilitation aftercare (Z codes) - Updated postoperative codes

Top 2025 Changes for Physical Therapy

1. Enhanced Musculoskeletal Laterality Specifications

Why this matters: Over one-third of the ICD-10 expansion from ICD-9 was due to laterality specifications (right, left, bilateral). The 2025 update continues this trend by adding laterality detail to codes that previously only had “unspecified” options.

2025 improvements:

• Joint pain codes now have enhanced right/left/bilateral specificity
• Tendinitis codes include specific laterality for previously vague locations
• Muscle strain codes differentiated by side and specific muscle groups

Example of improved coding:

Before 2025:

• M65.9 - Synovitis and tenosynovitis, unspecified (vague, non-specific)

2025 Update:

• M65.811 - Other synovitis and tenosynovitis, right shoulder
• M65.812 - Other synovitis and tenosynovitis, left shoulder
• M65.819 - Other synovitis and tenosynovitis, unspecified shoulder

Why it matters: More specific codes reduce claim denials and better support medical necessity. Payers can now see exactly which shoulder you’re treating, reducing the likelihood of audit triggers.

2. Intervertebral Disk Disorder Expansion (M51 Codes)

New for 2025: Six new character options under M51 provide precise location specificity for disk disorders affecting the thoracic, thoracolumbar, and lumbosacral regions.

Common PT scenarios now covered:

Documentation tip: With more specific codes available, payers expect you to use them. Defaulting to “unspecified” codes when specific options exist may trigger claim reviews or denials.

3. Synovitis and Tenosynovitis Specificity (M65 Codes)

Synovitis and tenosynovitis are common conditions in PT practice, especially for patients with overuse injuries, post-surgical inflammation, or chronic conditions like rheumatoid arthritis.

2025 additions allow you to specify:

• Exact anatomical location (shoulder, elbow, wrist, hand, hip, knee, ankle)
• Laterality (right, left, bilateral)
• Type of tenosynovitis (infective, calcific, trigger finger, other)

Example - Trigger Finger:

Old coding (less specific):

• M65.3 - Trigger finger, unspecified finger

2025 coding (more specific):

• M65.311 - Trigger thumb, right hand
• M65.312 - Trigger thumb, left hand
• M65.321 - Trigger finger, right index finger
• M65.322 - Trigger finger, left index finger

Clinical impact: You can now document exactly which digit is affected, supporting the specificity payers require for medical necessity determinations.

4. Combination Codes for Pain Syndromes

The 2025 update introduces improved “combination codes” that connect underlying conditions with their common symptoms, reducing the need for multiple codes and improving documentation clarity.

Example - Osteoarthritis with pain:

Old method (multiple codes required):

• M17.11 - Unilateral primary osteoarthritis, right knee
• M25.561 - Pain in right knee

2025 combination code option:

• Enhanced osteoarthritis codes now better capture both the structural condition and associated pain in a single code

Why this helps: Fewer codes mean less opportunity for coding errors, faster claim processing, and clearer documentation for auditors.

5. Enhanced Injury Coding (S Codes)

For PTs treating post-injury patients, the 2025 update provides more detailed seventh-character options for:

• Initial encounter vs. subsequent encounter vs. sequela
• Fracture healing status (routine, delayed, nonunion, malunion)
• Open vs. closed fractures with specific Gustilo classifications

Example - Ankle fracture:

S82.891A - Other fracture of right lower leg, initial encounter for closed fracture S82.891D - Other fracture of right lower leg, subsequent encounter for closed fracture with routine healing S82.891G - Other fracture of right lower leg, subsequent encounter for closed fracture with delayed healing

PT application: If you’re treating a patient post-fracture, using the correct seventh character tells the payer whether this is the first treatment (initial encounter) or ongoing rehabilitation (subsequent encounter), which affects authorization requirements and reimbursement.

Most Common ICD-10 Codes for Physical Therapy (2025 Edition)

These are the most frequently used diagnosis codes in physical therapy practices, updated for 2025 validity:

Back and Neck Pain

• M54.5 - Low back pain
• M54.2 - Cervicalgia (neck pain)
• M54.6 - Pain in thoracic spine
• M51.36 - Other intervertebral disk degeneration, lumbar region
• M51.37 - Other intervertebral disk degeneration, lumbosacral region

Shoulder Conditions

• M25.511 - Pain in right shoulder
• M25.512 - Pain in left shoulder
• M75.100 - Unspecified rotator cuff tear or rupture of right shoulder, not specified as traumatic
• M75.101 - Unspecified rotator cuff tear or rupture of left shoulder, not specified as traumatic
• M75.51 - Bursitis of right shoulder
• M75.52 - Bursitis of left shoulder

Knee Conditions

• M25.561 - Pain in right knee
• M25.562 - Pain in left knee
• M17.11 - Unilateral primary osteoarthritis, right knee
• M17.12 - Unilateral primary osteoarthritis, left knee
• S83.511A - Sprain of anterior cruciate ligament of right knee, initial encounter
• S83.512A - Sprain of anterior cruciate ligament of left knee, initial encounter

Hip Conditions

• M25.551 - Pain in right hip
• M25.552 - Pain in left hip
• M16.11 - Unilateral primary osteoarthritis, right hip
• M16.12 - Unilateral primary osteoarthritis, left hip

Ankle and Foot

• M76.61 - Achilles tendinitis, right leg
• M76.62 - Achilles tendinitis, left leg
• M72.2 - Plantar fascial fibromatosis (plantar fasciitis)
• S93.401A - Sprain of unspecified ligament of right ankle, initial encounter
• S93.402A - Sprain of unspecified ligament of left ankle, initial encounter

Post-Surgical and Aftercare

• Z47.1 - Aftercare following joint replacement surgery
• Z47.81 - Encounter for orthopedic aftercare following surgical amputation
• Z47.89 - Encounter for other orthopedic aftercare
• Z96.641 - Presence of right artificial hip joint
• Z96.642 - Presence of left artificial hip joint
• Z96.651 - Presence of right artificial knee joint
• Z96.652 - Presence of left artificial knee joint

Balance and Gait Disorders

• R26.81 - Unsteadiness on feet
• R26.89 - Other abnormalities of gait and mobility
• R29.6 - Repeated falls

Deleted Codes: What You Can No Longer Use

The following codes were deleted in the FY 2025 update and are no longer valid for dates of service on or after October 1, 2024:

Important: Using a deleted code will result in automatic claim rejection. Ensure your EMR system has been updated to remove these codes from selection options.

While the specific list of 36 deleted codes wasn’t provided in full by CMS public announcements, deleted codes typically include:

• Codes that were too vague and have been replaced with more specific options
• Codes for outdated treatments or conditions no longer recognized
• Duplicate codes that caused confusion

Proactive Chart advantage: Our system automatically deactivates deleted codes on October 1st each year, preventing you from accidentally selecting invalid codes. You’ll receive a notification if you attempt to use a code that’s no longer valid.

ICD-10 Coding Best Practices for PT/OT

1. Always Use the Most Specific Code Available

Rule of thumb: If a more specific code exists, you must use it. Payers view “unspecified” codes as red flags indicating incomplete documentation.

❌ Poor coding: M54.9 - Dorsalgia, unspecified (too vague) ✅ Better coding: M54.5 - Low back pain (more specific)

2. Code to the Highest Level of Certainty

You can only code based on what you’ve documented. If your evaluation doesn’t specify laterality or specific anatomical location, you cannot use a code that requires that information.

Solution: Train therapists to document with coding specificity in mind. Include:

• Right, left, or bilateral specification
• Specific anatomical structures (e.g., “right supraspinatus tendinitis” not just “shoulder pain”)
• Acute vs. chronic status
• Initial encounter vs. subsequent encounter

3. Understand Sequencing Rules

When a patient has multiple conditions, the primary diagnosis (listed first) should be the condition that is the chief reason for the therapy encounter.

Example scenario: Patient with diabetes also receiving PT for knee osteoarthritis.

Correct sequencing:

1. M17.11 - Unilateral primary osteoarthritis, right knee (primary - reason for PT)
2. E11.9 - Type 2 diabetes mellitus without complications (secondary - relevant comorbidity)

According to FY 2025 ICD-10-CM guidelines: “When the purpose for the admission/encounter is rehabilitation, sequence first the code for the condition for which the service is being performed.”

4. Stay Current with Annual Updates

Subscribe to updates from:

• CMS ICD-10-CM webpage (official source)
• APTA coding updates (PT-specific interpretation)
• Your EMR vendor (system-specific implementation details)

Proactive Chart users receive automatic notifications about code updates, with detailed change summaries tailored to PT/OT practice.

5. Verify Payer-Specific Requirements

While ICD-10-CM is standardized, some payers have additional requirements:

• Number of diagnosis codes allowed per claim (typically 1-12)
• Required diagnoses for certain CPT codes
• Limitations on “unspecified” code usage
• Documentation requirements to support specific codes

6. Document to Support Your Coding

Your clinical documentation must justify the ICD-10 code you select. An auditor reviewing your chart should be able to clearly identify why you chose each code based on your evaluation and clinical notes.

Red flag example:

• Code selected: M75.100 (Rotator cuff tear, right shoulder)
• Documentation: “Patient reports shoulder pain. Tolerated treatment well.”
• Problem: Documentation doesn’t support a rotator cuff tear diagnosis

Compliant example:

• Code selected: M75.100 (Rotator cuff tear, right shoulder)
• Documentation: “Patient presents with positive Neer and Hawkins-Kennedy impingement tests, painful arc 70-120°, weakness with external rotation (4/5 MMT), MRI report (dated 12/15/24) confirms partial-thickness tear of supraspinatus tendon.”
• Strength: Specific clinical findings support the diagnosis

How Proactive Chart Keeps You ICD-10 Compliant

Manual coding updates are time-consuming, error-prone, and risky. Missing a single code change can result in weeks or months of denied claims before you discover the problem.

Proactive Chart’s ICD-10 Management Features

1. Automatic Code Database Updates

• ICD-10 code set updates every October 1st automatically
• New codes added with descriptions and usage guidance
• Deleted codes immediately removed from selection lists
• Revised codes updated with new descriptions and rules

2. Real-Time Validation

• Alert notifications if you select a code that doesn’t match the date of service
• Warnings if you use “unspecified” codes when specific options exist
• Payer-specific code requirement checking before claim submission

3. Favorite Codes with Smart Suggestions

• Save your most frequently used codes for quick access
• AI-powered code suggestions based on your documentation keywords
• Automatic laterality detection (if you document “right shoulder,” system suggests right shoulder codes)

4. Compliance Dashboard

• Track your “unspecified” code usage percentage
• Identify patterns that may trigger audits
• Benchmark your coding practices against national PT standards

5. Built-In Code Lookup

• Search codes by keyword (e.g., type “ankle sprain” to see all relevant codes)
• Browse by body system or alphabetical index
• View official code descriptions and coding guidelines without leaving the platform

6. Documentation Templates Designed for Coding

• Evaluation templates prompt for specific details needed for accurate coding
• Dropdown fields automatically suggest appropriate ICD-10 codes
• Laterality, acuity, and encounter type captured systematically

The Cost of Outdated Coding

Consider the financial impact of using incorrect or outdated ICD-10 codes:

Example scenario:

• Small practice with 20 patients/day = 400 claims/month
• 7% denial rate due to coding errors = 28 denied claims
• Average reimbursement $100 = $2,800 in delayed revenue per month
• 10% never resubmitted = $280 permanent loss per month = $3,360/year

Proactive Chart eliminates these losses by preventing coding errors before claims are submitted.

Common ICD-10 Coding Mistakes to Avoid

Mistake #1: Using Outdated Codes

Problem: Billing with codes from previous fiscal year after October 1st Solution: Ensure your EMR updates automatically or manually verify code validity

Mistake #2: Defaulting to “Unspecified” Codes

Problem: Selecting M54.9 (Dorsalgia, unspecified) when M54.5 (Low back pain) is more accurate Solution: Document specifics that allow for the most detailed code selection

Mistake #3: Ignoring Laterality

Problem: Coding M25.50 (Pain in unspecified joint) when treating a specific right or left joint Solution: Always document right, left, or bilateral and code accordingly

Mistake #4: Incorrect Encounter Type

Problem: Using “initial encounter” (A) seventh character for every visit Solution: Use “subsequent encounter” (D) for ongoing treatment after the first visit

Mistake #5: Mismatched Diagnosis and Treatment

Problem: Billing for manual therapy (97140) with diagnosis code for fracture still healing Solution: Ensure treatment codes align with the diagnosis phase and medical necessity

Mistake #6: Outdated Code Favorites

Problem: Using saved “favorite” codes that were valid last year but deleted in 2025 Solution: Review and update favorite code lists after each October 1 update

2025 ICD-10 Compliance Checklist

Use this checklist to ensure your practice is ready for the FY 2025 code set:

• EMR software updated with FY 2025 ICD-10-CM codes (effective Oct 1, 2024)
• Staff trained on new code additions and deletions
• Documentation templates reviewed to capture required specificity
• Favorite/frequently-used code lists reviewed and updated
• Payer-specific coding requirements verified
• Internal audit scheduled to review coding accuracy
• Clearinghouse or billing software confirmed compatible with 2025 codes
• Backup plan in place if outdated codes cause claim rejections
• Reference materials updated (coding books, cheat sheets, quick reference guides)
• Communication sent to referring physicians about any relevant code changes

Looking Ahead: Preparing for Future Updates

ICD-10 updates are an annual reality. Here’s how to stay prepared:

Mid-Year Code Updates (April 1)

In addition to the major October 1 update, CMS sometimes releases mid-year updates on April 1st. The April 1, 2025 update included index entry revisions and instructional note changes (though no new diagnosis codes were added).

Action item: Subscribe to CMS ICD-10 update notifications at CMS.gov to receive official announcements.

ICD-11 on the Horizon

The World Health Organization (WHO) released ICD-11 in 2022, but the U.S. has not yet adopted it. The transition from ICD-10 to ICD-11 will be significant, but it’s unlikely before 2027-2028 at the earliest.

What this means: Continue investing in ICD-10 knowledge and systems for the next several years.

Connection to MIPS and Quality Reporting

ICD-10 codes increasingly connect to quality measures used in MIPS (Merit-based Incentive Payment System) reporting. Accurate coding directly impacts:

• Quality measure performance scores
• Risk adjustment calculations
• Benchmarking against other providers
• Medicare payment adjustments

2025 emphasis: CMS is strengthening the link between diagnosis coding accuracy and quality measure reporting, making correct ICD-10 usage even more critical for reimbursement.

Conclusion: Coding Accuracy = Getting Paid

The 2025 ICD-10-CM updates represent more than just administrative changes—they directly affect your practice’s revenue, compliance status, and audit risk. With 252 new codes, 36 deletions, and enhanced specificity requirements, staying current is essential.

Key takeaways:

• October 1 is the annual ICD-10 update deadline—mark your calendar
• Specificity matters: Use the most detailed code supported by your documentation
• Laterality is critical: Right, left, or bilateral must be documented and coded correctly
• Automation reduces errors: Modern EMR systems prevent outdated code usage automatically
• Documentation quality drives coding accuracy: Better notes = better codes = better reimbursement

Proactive Chart takes the guesswork out of ICD-10 compliance. Our system automatically updates code databases, validates selections in real-time, and guides you toward accurate, defensible coding that maximizes reimbursement while minimizing audit risk.

Ready to eliminate coding errors and denials? Learn more about Proactive Chart’s automated coding compliance features or schedule a demo today.

Related Resources

• PT CPT Codes for 2025 - Master the procedure codes that pair with ICD-10 diagnoses
• Medicare 8-Minute Rule 2025 - Calculate units correctly for accurate billing
• Audit-Proof Physical Therapy Documentation - Build notes that support your code selections
• Complete PT Billing and RCM Guide - End-to-end billing best practices
• MIPS for Physical Therapy 2025 - Quality reporting and ICD-10 accuracy

References:

• Centers for Disease Control and Prevention. (2024). ICD-10-CM Official Guidelines for Coding and Reporting FY 2025. CDC.gov.
• Centers for Medicare & Medicaid Services. (2024). ICD-10-CM Code Updates. CMS.gov/Medicare/Coding-Billing/ICD-10-Codes.
• American Physical Therapy Association. (2025). ICD-10 Coding and Documentation Resources. APTA.org.
• American Academy of Professional Coders. (2024). CMS Posts ICD-10-CM Update for FY 2025. AAPC.com.

Disclaimer: This article provides general guidance on ICD-10-CM coding. Always refer to official CMS resources and consult with a certified coder or billing specialist for specific coding questions. Coding requirements may vary by payer and region.