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ICD-9 coding of DJD I agree with using 715.96 for the knee. I am a physician coder also. I have been taught, if my physician does not specify localized then to default to the unspecified. I was taught to code exactly what the physician says.
DRGs are assigned using the principal diagnosis, additional diagnoses, the principal procedure and additional procedures, age, sex and discharge status. Diagnoses and procedures assigned by using ICD-9-CM codes determine the DRG assignment.