FAQ: How will the transition to ICD-10 codes affect health IT?

As of Oct. 1, 2015, U.S. health care providers must use ICD-10 codes when they submit medical claims. This FAQ addresses what the transition means and how providers can prepare.

While most of the world is using the International Statistical Classification of Diseases and Related Health Problems,

10th Edition, or ICD-10, to describe diseases and morbidity and mortality data, the United States continues to use ICD-9, which was published more than three decades ago, for morbidity data and Medicare and Medicaid claims. The U.S. remains the only developed nation in the world still using ICD-9.

To that end, the Department of Health & Human Services has mandated a migration to ICD-10 codes by Oct. 1, 2015. The timeline has been pushed back twice from a more aggressive 2011 deadline, but the process still is expected to be difficult, because ICD-10 contains nearly 10 times as many codes as ICD-9. The process also requires a transition to version 5010 of the electronic health standards for Health Insurance Portability and Accountability Act (HIPAA) transactions.

The consequences are high for failing to convert to ICD-10: Medical claims submitted after Oct. 1, 2015, will be rejected if they don't use the appropriate ICD-10 codes. Fortunately, federal agencies as well as nongovernmental organizations are on the case: Best practices and ICD-9 to ICD-10 conversion tools are now available.

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What is the ICD?

The International Statistical Classification of Diseases and Related Health Problems, published by the World Health Organization (WHO), uses unique alphanumeric codes to identify known diseases and other health problems. According to WHO, the ICD helps store and retrieve diagnosis information and compile national mortality and morbidity statistics.

The ICD was known initially as the International List of Causes of Death when the International Statistical Institute adopted it in 1893. (According to WHO's history of the development of the ICD, the classification system at that point had officially been in development for four decades, and could trace its roots to the work of 17th-century London demographer John Graunt.) When WHO was created in 1948, responsibility for the ICD, then in its sixth revision, was transferred to the new organization.

WHO has revised the ICD four times since 1948.The most recent versions, ICD-9 and ICD-10, were completed in 1979 and 1992 respectively. Another revision, known as ICD-11, currently is in beta.

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Have individual countries made any changes to the ICD?

With the blessing of WHO, several countries, including Australia, Canada, France and Germany, have made modifications to ICD-10 to accommodate procedure codes.

In the United States, the National Center for Health Statistics has expanded ICD-9 and ICD-10 to cover morbidity statistics as well as procedure codes.

  • For ICD-9, this is known as the International Classification of Diseases, Ninth Edition, Clinical Modification (ICD-9-CM), which comprises two volumes of diagnosis codes and one volume of procedure codes.
  • For ICD-10, there are two classifications, one for clinical modification (ICD-10-CM), the other for procedure coding systems (ICD-10-PCS) developed by the Centers for Medicare & Medicaid Services (CMS). ICD-10-CM is intended to replace the first two volumes of ICD-9-CM, while ICD-10-PCS will replace the third volume of ICD-9-CM.

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What versions of the ICD are currently in use?

ICD-10, the most recent iteration of the coding system, is used throughout the world; more than 100 countries use it for reporting deaths, and about two dozen also use ICD-10 codes for reimbursement and resource allocation. Its earliest adopters include the Nordic countries, which began a four-year ICD-10 implementation in 1994, and the United Kingdom, which began using the standard in 1995. ICD-10 contains 22 chapters, each of which defines a different set of conditions or diseases.

Providers in the United States use ICD-10 to report mortality data, but still use ICD-9-CM to report morbidity data and to complete Medicare and Medicaid claims. Neither ICD-10-CM nor ICD-10-PCS is currently in use, nor will they be used before Oct. 1, 2014.

Not surprisingly, ICD-9 is outdated. According to the CMS history of ICD-9-CM, the existing standard is rigid, inexact and not descriptive enough, in addition to being obsolete. For example, codes for a combination defibrillator-pacemaker device do not appear in the cardiovascular chapter of ICD-9-CM, which includes codes for defibrillator and pacemaker devices separately. In addition, as the American Medical Association (AMA) pointed out, chapters pertaining to complex body systems filled quickly, meaning that new codes for cardiac systems were assigned to the chapter initially reserved for the eye.

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What are the advantages of using ICD-10 instead of ICD-9?

While ICD-9-CM contains about 13,000 diagnosis codes, which for the most part are three- to five-digit numbers, ICD-10-CM has more than 68,000 codes made up of seven alphanumeric characters. (ICD-10 in its entirety contains more than 140,000 codes.) In this manner, the American Association of Professional Coders (AAPC) noted in its ICD-10 FAQ, a single code can refer to a disease and its current manifestation. A single code also can express laterality, noting that a condition is on the left or right side of the body.

The United States' move to ICD-10 is expected to streamline the process by which health care providers submit medical claims, and result in fewer coding mistakes, less need for supporting documentation and as a result, fewer requests for additional information after a claim has been submitted. Other benefits, according to an ICD-10 implementation overview presentation by CMS, include better sensitivity in refining grouping and reimbursement methods, and improvements to public health surveillance.

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What challenges face U.S. organizations making the ICD-9 to ICD-10 conversion?

The additional characters in the ICD-10 codes provide many types of key information -- for example, the body system, root operation, body part and device involved in a particular procedure -- but they also make it necessary to expand the data fields in all applications that use the ICD codes.

Because ICD-10 codes must be used on all transactions containing HIPAA-protected patient data -- including outpatient claims with dates of service, and inpatient claims with dates of discharge -- they permeate numerous applications, including medical billing software, electronic health record (EHR) technology, practice management software and revenue cycle management systems.

After Oct. 1, 2015, claims from hospitals and providers will be categorically rejected if they don't use the correct ICD-10 codes, and delayed reimbursements will result. For hospitals and providers, the delay will create a backlog; for smaller organizations, the delay could mean they will go out of business. The time crunch is so tight that coders proficient in ICD-10 are in high demand, a scenario being compared to the hunt for COBOL programmers in the years leading up to Y2K.

It certainly does not help that an organization's ICD-9 to ICD-10 conversion must occur at the same time it has to meet other federally mandated deadlines, including those for implementing EHR technology and demonstrating its meaningful use, as the publication Health Management Technology pointed out in its ICD-10 implementation roadmap.

However, health care providers can take some solace in the fact that the annual update to the ICD-9 and ICD-10 code sets scheduled for Oct. 1, 2011, will be the final one for three years. ICD-9 and ICD-10 updates will be partially frozen for 2013 and 2014; the lone updates will be done to capture new technologies or diseases. This does not change the Oct. 1, 2015, deadline for achieving ICD-10 compliance.

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What's the best way to conduct an ICD-10 conversion?

If one considers the Health Management Technology's aforementioned ICD-10 roadmap, as well as the AMA's advice, one arrives at a nine-step process for carrying out the ICD-9 to ICD-10 conversion:

  1. Identify all systems and processes, electronic as well as manual, in which ICD-9 is used. These will include practice management, clinical documentation, EHR systems and quality reporting.
  2. Approach practice management software vendors about their plans to address the transition and about their timelines for upgrading that software. Keep in mind that certain upgrades will be covered in annual maintenance contracts.
  3. Likewise, talk to clearinghouses, billing services and payers about when they will be upgrading. Also ask if implementing ICD-10 codes will require changes to contracts.
  4. Establish an ICD-10 steering committee, with at least one C-level executive as a member, that will assess the business processes, clinical workflows and IT systems affected by the conversion.
  5. Pinpoint staff training needs. This includes obtaining materials, establishing a timeline and choosing a training format.
  6. Assess ICD-10 readiness, and assess the financial impact of ICD-10 on reimbursement processes.
  7. Draft an ICD-10 implementation budget. This should include system changes, business process changes, resource materials and training.
  8. Implement a remediation roadmap, with changes and other new processes continually evaluated along the way.
  9. Ask payers, clearinghouses and other partners to conduct a test to make sure they can, in fact, accept ICD-10 codes. Try to test each transaction that involves the swapping of ICD-10 codes.

When it comes time to map the codes, a variety of applications are available.

However, as both ICD-10 Watch and CMS have noted, these applications are intended largely for one-off situations. Practice management software or specific ICD-10 remediation systems will do the bulk of the work, and GEMs should not be viewed as a substitute for learning how to code with ICD-10.

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What is version 5010, and how is it related to ICD-10?

Along with the ICD-10 implementation, CMS is mandating a transition, effective Jan. 1, 2012, to version 5010 of electronic transaction standards under HIPAA. This transition is necessary because version 4010 of the standards originally named in HIPAA, which was passed in 1996, are outdated and cannot accommodate ICD-10.

According to the AMA's version 5010 page, the process of upgrading from version 4010 is fairly similar to the process for the ICD-9 to ICD-10 conversion:

  • Find out when upgrades from practice management software vendors, clearinghouses, billing services and payers will be completed.
  • Identify workflow changes and staff training needs.
  • Test version 5010 transactions internally and externally.

Organizations that have completed the move to version 5010 can begin to use the standard before the Jan. 1, 2012 deadline, provided that their clearinghouse, payers and other partners are ready too.

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Let us know what you think about the FAQ; email editor@searchhealthit.com.

Editor's Note: This FAQ was updated May 23, 2014 to reflect new ICD-10 implementation dates.

This was first published in October 2010

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