Excludes1 vs Excludes2: How to Read ICD-10-CM Exclusion Notes

The difference between Excludes1 vs Excludes2 comes down to one question: can these two conditions be coded together? An Excludes1 note means "NOT CODED HERE": the excluded condition should not be reported with the code above the note, except when the two conditions are unrelated. An Excludes2 note means "NOT INCLUDED HERE": the excluded condition is not part of that code, but both codes may be reported when the patient has both.

Both notes are defined in Section I.A.12 of the ICD-10-CM Official Guidelines for Coding and Reporting. They apply to the FY2026 code set, which covers encounters from October 1, 2025, through September 30, 2026. This article is educational. Always follow the official guidelines, payer policies and provider documentation.

What is the difference between Excludes1 vs Excludes2?

ICD-10-CM uses two types of exclusion notes, and each has a different meaning. The table below summarizes the core rules.

A simple memory aid helps. Excludes1 is a stop sign. Excludes2 is a yield sign: you can proceed if the documentation supports it.

What does an Excludes1 note mean?

Section I.A.12.a describes an Excludes1 note as a "pure" excludes note. It indicates that the code excluded should never be used at the same time as the code above the note. It is used when two conditions cannot occur together.

The guidelines give the classic example of a congenital form versus an acquired form of the same condition. A condition cannot be both present at birth and acquired later. So the classification forces you to pick one.

Example: type 1 vs type 2 diabetes

Category E11, Type 2 diabetes mellitus, carries an Excludes1 note for type 1 diabetes mellitus (category E10). A patient's diabetes is classified as one type, not both.

In practice, that means you would not report E10.9, Type 1 diabetes mellitus without complications, with E11.9, Type 2 diabetes mellitus without complications, for the same patient. If the record documents both types inconsistently, that is a documentation problem, not a reason to code both. The same E11 note also excludes gestational diabetes and other diabetes types classified elsewhere.

Example: congenital vs acquired hydrocephalus

Category G91, Hydrocephalus, has an Excludes1 note for congenital hydrocephalus (category Q03). That mirrors the congenital-versus-acquired logic in the guidelines.

So G91.9, Hydrocephalus, unspecified, and Q03.9, Congenital hydrocephalus, unspecified, are not reported together. The documentation determines which form the patient has.

When can you report both codes in an Excludes1 pair?

Section I.A.12.a includes an important exception. When the two conditions are unrelated to each other, it is permissible to report both codes, even though an Excludes1 note links them.

This matters because some codes cover several different conditions. An Excludes1 note may be aimed at one condition within a code but technically sit on the whole code. If the patient's actual conditions have nothing to do with each other, the exclusion's purpose does not apply.

The guidelines also say what to do when you are not sure. If it is not clear whether the two conditions are related, query the provider. Do not resolve the question yourself. A tool like the AI CDI query builder can help you draft a compliant, non-leading query, but a qualified professional must review it before it goes out.

What does an Excludes2 note mean?

Section I.A.12.b describes an Excludes2 note as meaning "Not included here." The excluded condition is not part of the condition represented by the code. However, a patient may have both conditions at the same time.

When that happens, it is acceptable to report both the code and the excluded code together, when appropriate. "When appropriate" is the key phrase. Each condition must be documented and must meet reporting requirements for the setting.

Example: acute vs chronic sinusitis

In the Tabular List, category J01, Acute sinusitis, carries an Excludes2 note for chronic sinusitis (category J32). Acute and chronic sinusitis are distinct conditions, but a patient can have an acute episode on top of chronic disease.

If the provider documents both, you may report J01.90, Acute sinusitis, unspecified, along with J32.9, Chronic sinusitis, unspecified, or more specific codes when the sinus is identified. Category J01 also has an Excludes1 note for sinusitis NOS (J32.9 is the unspecified chronic code). That shows how a single category can carry both note types. Verify the current wording on each code page before coding.

Does Excludes2 ever require a second code?

No. An Excludes2 note gives permission, not a mandate. It tells you the second condition is coded elsewhere if present. It does not tell you the patient has it.

If the record does not support the excluded condition, do not add it. Coding from an Excludes2 note without documentation is just as wrong as ignoring a documented condition.

Where do exclusion notes appear, and how far do they reach?

Exclusion notes can appear at several levels of the Tabular List. A note at a higher level applies to every code beneath it.

• Block level (a range of categories, such as a section within a chapter): applies to all categories in the block.
• Category level (three characters, such as E11): applies to every subcategory and code in that category.
• Subcategory level (four or more characters): applies to all codes under that subcategory.
• Code level: applies to that specific code.

This is why reading only the code line is a mistake. A billable code may have no note of its own, yet its category or block may carry an Excludes1 note that blocks a pairing. Use the ICD-10-CM Tabular List by chapter to see the notes at each level above your code.

What do the dashes in exclusion notes mean?

A dash after a code in an exclusion note, such as E10.-, means the note refers to the whole category or subcategory. It is not a valid code by itself. You still need to select a complete, billable code from that category if the excluded condition applies.

How do you read exclusion notes step by step?

Use this routine for every code you assign, especially when you report more than one diagnosis.

1. Locate the term in the ICD-10-CM Alphabetic Index using the main term from the documentation.
2. Verify the code in the Tabular List. Exclusion notes appear in the Tabular, not in the Index.
3. Read every level above the code: chapter, block, category and subcategory notes.
4. Compare each additional code you plan to report against the Excludes1 and Excludes2 lists.
5. For an Excludes1 match, decide whether the conditions are related. If they are related, report only the code that best fits the documentation. If they are clearly unrelated, both may be reported. If you cannot tell, query the provider.
6. For an Excludes2 match, confirm that the excluded condition is documented before you report it.
7. Check the other instructional notes (Code first, Use additional code, Code also) before finalizing.

What are the most common Excludes1 vs Excludes2 mistakes?

Most errors come from reading notes too quickly or treating them as interchangeable. Watch for these patterns.

• Treating Excludes2 as a prohibition. Coders sometimes drop a valid, documented second diagnosis because they see the word "Excludes." That understates patient complexity.
• Treating Excludes1 as a suggestion. Reporting both codes in a related Excludes1 pair creates a contradictory claim. Some claim editing software may flag these pairs.
• Forgetting the hierarchy. Missing a category-level or block-level note is one of the most frequent causes of Excludes1 errors.
• Ignoring the unrelated-conditions exception. Dropping a legitimate code because of an Excludes1 note that does not actually apply to the patient's condition is also an error.
• Coding NOS and specific codes together. Excludes1 notes often point to an unspecified code. Report only the most specific code that the documentation supports.
• Relying on outdated references. Instructional notes can be revised in the annual update. Recheck notes when each new fiscal year begins.

How do exclusion notes interact with other instructional notes?

Exclusion notes do not work alone. A complete code assignment often depends on several conventions read together.

A practical point: an Excludes1 note often appears because a combination code already captures both elements. When a single code describes two conditions together, you should not add a separate code for an element the combination code already includes. Read the full title carefully before adding a second code.

For the official wording of these conventions, review the current guidelines published by the CDC National Center for Health Statistics and the CMS ICD-10 resources page.

How can ICD Code Finder help you check exclusion notes?

Every code page in ICD Code Finder shows the full title, billable status and the Excludes1 and Excludes2 notes. It also lists Code first, Use additional code and Code also notes, plus 7th-character rules. That puts the exclusion check on the same screen as the code.

A few features fit naturally into an exclusion-note workflow:

• Free code search. Search ICD-10-CM codes and open any code page to review its notes for FY2026.
• Annual changes. Review the FY2026 new, revised and deleted codes when the fiscal year turns over.
• Saved code lists. Use the Code Set Builder to keep frequently paired codes together, so you can recheck their notes after each update. Pro and Team plans add FY-update email alerts; see pricing for plan details.
• Guidelines questions. Ask about a convention in the ICD-10-CM guidelines chat, which works with your own AI provider key.

AI suggestions, including those from Note → Codes, always need review by a qualified coder. The app does not replace the official code books, payer policies or your professional judgment.

Next steps

The Excludes1 vs Excludes2 distinction is small on the page but large in impact. Treat Excludes1 as "pick one, unless unrelated," and Excludes2 as "both are allowed, if documented." Then read every level of the hierarchy before you finalize a claim.

Ready to put it into practice? Look up codes free and review the exclusion notes on each code page. For more convention deep dives, browse our Coding Guidelines articles.