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Moving Forward: ICD-10

Jessica Caldwell

University of South Florida

Spring 2013

Health Policy & Politics

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There exists a system of alphanumeric code sets to describe diagnoses and procedures called the

International Classification of Diseases, abbreviated ICD. The World Health Organization

(WHO) defines ICD as, “the standard diagnostic tool for epidemiology, health management and

clinical purposes”. The World Health Organization uses the International Classification of

Diseases to monitor the incidence and prevalence of diseases and other health problems. The

United States has been using the ninth edition of this classification system, called ICD-9. Much

of the rest of the member states of the WHO use the more current ICD-10, the tenth edition.

According to the American Academy of Professional Coders (AAPC), only a handful of

countries, including the United States and Italy, have not adopted ICD-10 as their standard for

reporting. Currently, the United States is working to implement the ICD-10 code set. The

political decision to adopt the next edition of ICD is timely, costly and intensive. This paper will

discuss the timeline to adoption, what’s wrong with ICD-9, why the United States is moving to

ICD-10 and some of the perils and pitfalls that have been encountered in doing so.

What’s Wrong with ICD-9?

Implemented in 1979, the ninth edition is a bit outdated. The code structure has basically run out

of room and cannot support the addition of new codes to address new medical technology or

diseases, hence the necessity for the creation of the next edition. ICD-9-CM is limited to a

maximum of five numbers. This caps ICD-9-CM to about 15,000 codes. Interestingly enough,

the World Health Organization explains that the tenth edition was endorsed by the Forty-third

World Health Assembly back in May 1990 and came into use in WHO Member-States as long

ago as 1994. (The eleventh revision of the classification (ICD-11) has already started and will

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continue until 2015!) Boy are we behind! The ICD-10 codes provide greater detail and

increased specificity. This could produce quality data on diagnostic and procedural trends

resulting in improved quality. With the recent push to a more electronic health system in the

United States, engaging the full benefit from electronic health record systems cannot be achieved

without replacing ICD-9. The old ICD-9 codes do not capture data relating to factors other than

disease, which significantly limits research capabilities. About one hundred other nations have

already replaced ICD-9; hindering international comparisons of data and leading to political

pressure from the World Health Organization for the United States to transition. The U.S.

Department of Health and Human Services explains in a press release, “ICD-10 codes provide

more robust and specific data that will help improve patient care and enable the exchange of our

health care data with that of the rest of the world that has long been using ICD-10.” (HHS 2012)

Pat Brooks, the Senior Technical Advisor at The Centers for Medicare and Medicaid Services

(CMS) explains the characteristics needed in a coding system are flexibility to be able to quickly

incorporate emerging diagnosis and procedure codes and exactness in order to identify diagnosis

and procedure codes precisely. ICD-9 is neither of these. So why did we wait so long to catch

up?

ICD-10 Mandate

• During the summer of 2008, the Department of Health and Human Services (HHS) caved

to pressure and initiated the regulatory process for an October 1, 2011 compliance date

requiring providers, health plans and clearinghouses to comply with new code set

regulations for the International Classification of Diseases, 10th Edition (ICD-10).

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• On Jan. 16, 2009, HHS published a Final Rule with a compliance date of October 1,

2013.

• On April 17, 2012, HHS published a Proposed Rule which would move the ICD-10

compliance date to October 1, 2014.

• August 24, 2012 Final Rule announced. The Final Rule, specifying the October 1, 2014

effective date will be published in the Federal Register on September 5, 2012 and become

effective on November 5, 2012.

Why All the Delays?

Let the lobbying begin! Surveys and polls indicated a lack of industry readiness for the ICD-10

transition. The Department of Health and Human Services Secretary Kathleen Sebelius

explained, “We have heard from many in the provider community who have concerns about the

administrative burdens they face in the years ahead. We are committing to work with the

provider community to reexamine the pace at which HHS and the nation implement these

important improvements to our health care system.” Some of the burdens she talks about are the

industry transition to Version 5010 (discussed later) did not proceed as effectively as expected

and providers expressed concern that other statutory initiatives are stretching their resources.

CMS Survey, December, 2011 found that 26% of providers surveyed indicated that they were at

risk for not meeting the October 1, 2012 ICD-10 implementation date. The Workgroup for

Electronic Data Interchange (WEDI) conducted an industry ICD-10 readiness survey, which

showed evidence that the industry was falling behind. Some of the findings of that survey:

– Half of the provider respondents did not know when they would complete their

impact assessments.

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– Half of the provider respondents did not know when testing would occur.

– More than one third of health plans have completed their assessments, but one

fourth of health plans are less than 50 percent done.

– About half of vendors are less than 50% complete with product development.

Recently, Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services

(CMS), announced at the annual Health Information Management Systems Society (HIMSS)

conference there will be no delay to implementation for ICD-10-CM and PCS, which is

scheduled October 1, 2014. She then encouraged everyone in the industry to work diligently

toward a successful transition.

ICD-10 Scope

The United States’ version is split into two code sets: Clinical Modification (ICD-10-CM) and

Procedure Coding System (ICD-10-PCS, specific to inpatient hospital procedures). The ICD-10

diagnosis code set is referred to as ICD-10-CM. The CM stands for clinical modifications. It is

used to identify diagnosis codes in all healthcare settings. ICD-10-PCS is the procedure coding

system and replaces the ICD-9 procedure codes. PCS is used for facility reporting of hospital

inpatient services. There will be no impact to the existing outpatient procedural coding systems.

Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System

(HCPCS) will still be used for physician and professional services and procedures performed in

outpatient facilities, including hospital outpatient departments.

The ICD-10 consists of

Tabular lists containing cause-of-death titles and codes

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Inclusion and exclusion terms for cause-of-death titles

An alphabetical index to diseases and nature of injury, external causes of injury, table of

drugs and chemicals

Descriptions, guidelines, and coding resources

Whereas ICD-9 contains more than 17,000 codes, ICD-10 contains more than 141,000 codes and

accommodates a host of new diagnoses and procedures. The American Academy of Professional

Coders warns, “The change to ICD-10-CM for diagnostic code reporting across all of health care

— and the implementation of ICD-10-PCS (Procedural Coding System) for inpatient procedural

reporting for hospitals and payers — will be the most challenging transition since the inception

of coding”, quite a declaration. Professional coders are scrambling to keep up with all the delays

and be prepared for the new version in time for implementation day.

Key Building Block: HIPAA 5010

Two of the key building blocks to achieve administrative simplification compliance are HIPAA

5010 and ICD-10. HIPAA 5010 is a separate initiative from ICD-10. HIPAA 5010

requirements update the standards for electronic transactions and apply to all types of

transactions, including claims, that are reimbursed through capitated payment arrangements or

claims from delegated entities. A CMS publication states, “The implementation of HIPAA 5010

presents substantial changes in the content of the data that you submit with your claims as well

as the data available to you in response to your electronic inquiries. The implementation will

require changes to the software, systems and perhaps procedures that you use for billing

Medicare and other payers.” (MLN Matters SE0904)

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HIPAA 5010 will update standards for electronic transactions including claims. This impacts all

HIPAA Covered Entities and all HIPAA covered transactions. As an integral part of the overall

ICD-10 transition, over 800 changes are mandated for HIPAA 5010. These changes require the

use of ICD-10 codes.

Implementation date: All physicians/hospitals and payers must exchange key business

transactional data using the HIPAA 5010 format via Electronic Data Exchange (EDI) by Jan. 1,

2012

The Perfect Storm

ICD-10 requires a more complex business approach than HIPAA 5010. The HIPAA 5010

changes were specified by CMS by prescriptive electronic data interchange technical

specifications. CMS recommended health care payers’ use of new and modified HIPAA 5010

data elements. ICD-10, on the other hand, requires health care payers to interpret the new ICD-

10 code set and determine how to modify business processes so that efficiencies can be gained to

drive organizational value and competitive differentiation. With ICD-10 transition, pressure

comes from volume, where after October 1, 2014 all dates of service and discharges must be

coded in ICD-10. However, claims prior to this date will still be adjudicated using ICD-9. Also,

worker’s compensation and auto claims are not a HIPAA controlled entity and will still be using

ICD-9 code sets. Therefore, all parties will have to maintain the capability to handle both

editions. Pressure also comes from complexity. I did not go into detail about the code set format

of ICD-10, but it will demand an intensive effort to ensure compliance. ICD-10-CM is a

combination of letter and numbers and can go as high as seven spaces, which allows for at least

200,000 codes. Subjectivity is another pressure. Mapping ICD-9 codes to ICD-10 codes is,

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more or less, an interpretive exercise the industry must undertake- individually. The American

Medical Association defines mapping as the process of linking content from one terminology or

classification scheme to another. Development of a single “official” mapping between ICD-9

and ICD-10 is a serious industry concern. Here’s why:

• Not all the codes will map accurately 1:1.

• All other codes will either lose information or assume information that may not be

true.

• Imperfect mapping will affect processing and analytics in a way that impacts

revenue, costs, risks and relationships.

• The level of impact is directly related to the quality of translation.

• The anticipated quality of translation is currently an unknown. (Grider 2010)

ICD-10 Impact Areas

The areas impacted by ICD-10 include people, processes, technology, productivity, and finances.

The training involved includes many individuals in the healthcare stream. The podcast called

ICD-10 Monitor Talk Ten Tuesdays sponsored by the AAPC interviewed Dr. Donald Rappe,

CPC-A. He had this to say about the people involved, “This business of ICD-10 creates a

necessity for a team sport,” Dr. Rappe said. “Physicians and coders bring… different but very

professional and complementary skills sets to the table. As long as the two groups are talking

together, this process and transition is going to go a lot more smoothly.”

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Many people think the move to ICD-10 will only affect the coders. It is not as simple as buying

new code books. The new code sets are just a small portion of the implementation process.

Physicians, nurses, coders, revenue cycle staff and administrative staff all will be touched by the

move to ICD-10. Every area of a practice will be affected. Education is the key to a successful

ICD-10 transition. ICD-10 training plans will need to be developed recognizing the roles each of

these people play. Who needs training and how much training will the need are important

questions to ask. Different levels of training will be required for basic, clinical, documentation,

and super users. The timing of training is also key, too soon can provide just as ineffective as

too late. American Medical Association cites an AHIMA survey in stating that there is a critical

shortage of coders currently in the US. Concerns in the coding community have led to

experienced workforce exits. Many coders are opting to retire rather than meet the challenge of

ICD-10. Being a completely new code-set there will be a shortage of ICD-10 coding skills. This

increased stress is likely to cause some attrition issues. The American Academy of Professional

Coders recommends some solutions to these anticipated problems. Coder retention will be

imperative. This can be accomplished by adding a bonus structure or other perks, like working

from home, contractually obligate service timeframes for coding education, outsourcing, and

computer aided coding.

Processes impacted include office billing/coding workflow, prior authorizations/notifications

changes, contract code mapping, and billing and reimbursement accounting. Changes to the

superbill, for example, could be dramatic. A significant amount of time will need to be devoted

to mapping. It is recommended to put a formalized project plan into action and involve key

stakeholders.

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ICD-10 is likely to have significant technological impact. IT will likely be largest expense

within this transition to ICD-10. Vendors will need to demonstrate their readiness. Dual

processing of ICD-9 and ICD-10 code sets will increase the time involved for coding and billing.

Practice management systems have to be updated, system interfaces will have to be redesigned,

some software changes may be necessary, and electronic data interchanges will have to be

compliant. There will definitely be some system down-time prior to the transition. ICD-10

Monitor’s Talk Ten Tuesday interviews the week of January 30th, 2013 included AAPC National

Advisory Board Member Annie Boynton, CPC, CPC-H, CPCO, CPC-P, CPC-I, RHIT, CCS,

CCS-P, CPhT, who offered an update on the state of payer readiness for ICD-10. She spoke of

how critical it was to have good education, training, and communication between the payers and

the provider networks. One of her comments, “There are a number of very savvy providers out

there, and facilities out there, who are ahead of the curve,” she said. “But in our experience thus

far, we have seen that a large number of providers are not aware of or have not received enough

education about what it means to test with a payer and why it is important.”

Productivity impact will be immense. Anytime something new is to be learned and

implemented, you will inevitable be slower. At the beginning there will be a decrease in

productivity because of this learning curve. The increased granularity of ICD-10 codes will

likely decrease productivity. Rhonda Buckholtz, ICD-10 Vice President at the American

Academy of Professional Coders, states, “Practices that take a strategic approach to ICD-10

implementation will not have the productivity struggles as those who do not take ICD-10

seriously”

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A huge change for providers will be the way they document. The properly documented medical

record can be used to protect the physician, the patient, and the practice in a legal situation. It

can also be used for ensuring proper reimbursement of claims submitted. Every day new

information is available regarding policies, procedures, and payments from CMS and the many

other health plans with which practices are contracted. Good documentation will help achieve

compliance, allow for better research and education, and can improve patient care and delivery.

Good documentation also enables proper reimbursement for the services provided. In essence,

good documentation can shield practices from audits and malpractice concerns.

Will businesses be able to sustain in face of the potential financial impacts of ICD-10? Delayed

payments, increased account receivables, cash flow/line of credit risks, increased queries from

coders, increased billing inquires by payers, and increased number of adjustments and

pended/suspended claims are all examples of expected impacts.

The Nachimson Advisor study found:

- Small practices (described as 3 doctors and 2 administrators) on average will spend $83,290,

Cash Flow Disruption: $19,500 (small practice)

- Medium practices (described as 10 doctors/ 1 coder/ 6 administrators) on average will spend

$285,195.

The Good News

The National Committee on Vital and Health Statistics (NCVHS) commissioned the RAND

Corporation to conduct analysis. RAND published this study for the Department of Health and

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Human Services titled, The Costs and Benefits of Moving to the ICD-10 Code Sets, released in

2004.

- Cost estimate was 400m to 1,150m (+ 5 to 40m in productivity losses in first year post-

implementation). This includes training physicians, coders, and billers, system

changes/enhancements, conducting process analysis, and productivity losses.

- The benefit estimate was 700m to 7,700m (over ten years). This included better

understanding of health care outcomes, fewer miscoded, rejected, and improperly

reimbursed claims, improved disease management, and improved valuation of new

procedures.

- Conclusion: It is likely that moving to ICD-10 CM and ICD-10 PCS has potential to

generate more benefits than costs (over time).

Conclusion

ICD-10 or the International Classification of Diseases, 10th Edition, is the update of sign and

symptom codes developed by the World Health Organization. ICD-10 replaces ICD-9 codes

used by physicians and health care professionals to report diagnoses and procedures, and payers

use the codes to accurately pay for procedures and services. Change is the thrust behind the need

to move forward into ICD-10. Medical advances and clinical findings of disease are prolific.

We have the need for greater reporting ability to track diseases and treatment outcomes to aid in

research and developing improved treatment methods. The advancement of medicine has

created the need to increase our capability to capture all this data. This has been the catalyst that

has catapulted us towards ICD-10. As stated by CMS the political implications are thus, “The

transition to ICD-10 is occurring because ICD-9 produces limited data about patients’ medical

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conditions and hospital inpatient procedures. ICD-9 is 30 years old, has outdated terms, and is

inconsistent with current medical practice. Also, the structure of ICD-9 limits the number of

new codes that can be created, and many categories are full.” The changing face of healthcare

has created the urgent need for expanded reporting. ICD-10 is the answer to meet that need.

I found only one error in the text. This is a highly technical topic, and

you did a good job on both this topic and the politics of it. The paper is

an A.

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Works Cited

International Classification of Diseases (ICD). (2013). Retrieved from World Health

Organization http://www.who.int/classifications/icd/en/

News Release. (2012). HHS announces intent to delay ICD-10 compliance date. Retrieved

from U.S. Department of Health and Human Services

http://www.hhs.gov/news/press/2012pres/02/20120216a.html

Office of the Secretary, HHS. (2009). HIPAA Administrative Simplification: Modifications to

Medical Data Code Set Standards To Adopt ICD–10–CM and ICD–10–PCS Federal Register

Vol. 74, No. 11.

http://www.gpo.gov/fdsys/pkg/FR-2009-01-16/pdf/E9-743.pdf Office of the Secretary, HHS. (2012). A Change to the Compliance Date for ICD–10–CM and

ICD–10–PCS Medical Data Code Sets, HHS Proposed Rule Federal Register Vol. 77, No. 74. http://www.gpo.gov/fdsys/pkg/FR-2012-04-17/pdf/2012-8718.pdf

ICD-10 Overview. Retrieved from American Academy of Professional Coders http://www.aapc.com/ICD-10/icd-10.aspx

Press Release on ICD-10 Survey. (2012). Retrieved from WEDI.

http://www.wedi.org/cmsUploads/pdfUpload/WEDIBulletin/pub/110111_Press_Release_on_IC

D-10_survey.final.pdf

Medicare Learning Network. (2013). An Introductory Overview of the HIPAA 5010. MLN Matters No. SE0904. http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network

MLN/MLNMattersArticles/downloads/SE0904.pdf

Grider, D.J. (2010). Preparing for ICD-10-CM: Make the Transition Manageable. United States: American Medical Association

Libicki, M., Brahmakulam, I. (2004). The Costs and Benefits of Moving to the ICD-10 Code Sets. The RAND Study

http://www.rand.org/pubs/technical_reports/2004/RAND_TR132.pdf Brooks, P. ICD-10 Overview. Retrieved from CMS.

https://www.cms.gov/Medicare/Medicare-Contracting/ContractorLearningResources/downloads/ICD-10_Overview_Presentation.pdf

Nachimson Advisors, LLC. (2008). Impact of Implementing ICD-10 on Physician Practices and Clinical Laboratories, A Report to the ICD-10 Coalition.

http://www.nachimsonadvisors.com/Documents/ICD-10%20Impacts%20on%20Providers.pdf