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Symposium on ICD-10 Conversion – February 2012

Tex Med. 2012;108(2):29-31. 

By Ken Ortolon

Tyler family physician Stephen Spain, MD, knows a thing or two about diagnostic codes. As a certified professional coder, he does all of the coding for his solo practice. 

That is why he has been paying close attention to the upcoming implementation of International Statistical Classification of Diseases and Related Health Problems (ICD)-10 diagnostic codes, scheduled for Oct. 1, 2013, unless the American Medical Association can persuade the federal government to abandon its plan for the changeover. (See "The Countdown Begins.") Dr. Spain calls ICD-10 "one of the biggest wholesale changes in medicine to come along in a few decades." 

ICD-10 is the first major change in the U.S. diagnostic coding system since ICD-9 implementation in the 1970s. Experts expect numerous benefits from implementation of ICD-10, including more accurate payment for medical services, improved ability to measure health care services and conduct public health surveillance, and better data for measuring care furnished to patients, process claims, and making clinical decisions. 

But ICD-10 will come with a hefty price tag – likely in the billions of dollars – as physicians, hospitals, health plans, and others are faced with upgrading practice management software and electronic medical record systems, training staff, and modifying workflow in their offices. 

ICD-10 will greatly expand the number of diagnostic codes that physicians will have to choose from when billing Medicare, Medicaid, and private health plans. The codes will have far more specificity than the current ICD-9 diagnostic codes, meaning physicians will have to more completely document their diagnoses to support these new codes. 

Dr. Spain and others say ICD-10 has huge potential to disrupt the workflow in physician offices and create administrative nightmares if physicians, their office staff, and other clinical practitioners in their offices are not ready for the change. 

But Dr. Spain worries that many of his colleagues will be ill prepared for ICD-10. "Probably most doctors are not even aware that there's going to be a change or, if they are, they think it's going to be nebulous and they're not going to have to worry about it," he said. 

That, he says, would be a huge mistake. And a number of organizations including the Texas Medical Association, AMA, and others are urging physicians to start now to plan their transition to ICD-10. 

"ICD-10 is so much more than just the number that goes on the super bill or the claim form," said Rhonda Buckholtz, vice president for ICD-10 training and education for the American Academy of Professional Coders (AAPC). "It impacts pretty much every single area of a provider's practice." 

In spring 2012, TMA Practice Consulting will offer training programs on ICD-10 including documentation paradigm shifts for physicians, as well as programs on code selection, workflow changes, and revenue optimization for staff, says Heather Bettridge, practice management consultant. 

In fact, she says TMA Practice Consulting "offers a diverse array of coding and documentation services. TMA consultants offer a wide variation in experience and areas of expertise with certifications as professional coders [CPCs], professional medical auditors [CPMAs], and medical practice executives [CMPEs]." 

Getting a Late Start

Actually, the United States, as a whole, is getting a very late start in implementing ICD-10. 

The World Health Organization adopted ICD-10 in 1993, and more than 100 countries have implemented it.  

"Physicians need to know that this isn't some new coding system that has been developed just for them," said Genevieve Davis, director of TMA's Payment Advocacy Department. "It's actually the diagnosis coding system that is used by the rest of the world." The United States is one of only a handful of countries that have not yet adopted ICD-10, she adds. 

Some 25 countries use ICD-10 for reimbursement and resource allocation in their health system. A few of those made modifications to the code set to better suit their health care systems. Some 110 countries use the unchanged international version of ICD-10 for cause-of-death reporting and statistics. 

The United Kingdom was one of the earliest adopters of ICD-10, putting it into use in 1995. France adopted ICD-10 in 1997, followed by Australia in 1998, Germany in 2000, and Canada in 2001. 

But the United States has been slow to put ICD-10 into use. Delays in implementation first came as U.S. health care agencies worked to develop modifications to ICD-10 specifically for use in this country. 

Two separate ICD-10 code sets were developed for the United States. The Centers for Disease Control and Prevention developed the ICD-10 Clinical Modifications, or ICD-10-CM, as the diagnostic classification system for use in all U.S. health care treatment settings. The U.S. Centers for Medicare & Medicaid Services (CMS) developed the ICD-10 Procedural Coding System (ICD-10-PCS) for inpatient hospital settings only. 

Other delays have occurred for political reasons, most recently in 2009 when CMS pushed back the implementation deadline from Oct. 1, 2011, to Oct. 1, 2013, because of concerns expressed by physicians, hospitals, and others about the cost and complexity of adjusting to the new coding system. 

According to a January 2009 Wall Street Journal article, CMS received more than 3,000 comments to its ICD-10 proposal at that time. Many of those comments requested more time to comply because of the cost and the need for training and testing of new billing and coding systems. 

Growing Exponentially

Experts say the switch to ICD-10 was necessary to accommodate new medical conditions. ICD-9 has essentially run out of available codes for those new conditions, they say. 

"They don't have any more room to add any more diagnosis codes in ICD-9," Ms. Davis said. "So as new medical conditions develop, a lot of those get dumped into the unspecified diagnosis code category in ICD-9. ICD-10 has room to grow." 

ICD-9-CM has only some 14,000 codes, while ICD-10 has more than 68,000 codes, says Ms. Davis. In some instances, the number of potential codes that could be used for the same diagnosis has increased exponentially. 

For example, CMS says there are nine potential location codes for pressure ulcers under ICD-9-CM, while ICD-10-CM has some 125 codes. The ICD-9 codes show broad location but not depth, whereas the ICD-10 codes show specific location as well as depth. 

Not only are their more codes under ICD-10, but also there are more digits for each code. ICD-9 codes have fewer digits and are strictly numeric. ICD-10 codes, on the other hand, have up to seven digits and can be both letters and numerals, Ms. Davis says. 

For instance, the ICD-9 code for infection or inflammation of the middle ear is 381.01, while the basic code for the same condition under ICD-10 is H65.00. Under ICD-10, however, there could be up to six different codes for an ear infection indicating whether the infection is in the right or left ear or bilateral and whether it is a recurrent condition. Coders also are instructed to use an additional code to identify exposure to environmental tobacco smoke, history of tobacco use, and other various conditions.

Experts say the learning curve likely will be steep for both coders and physicians who will have to learn an entirely new set of codes. 

"A successful and smooth transition over to ICD-10 will need to include education, awareness of the continual changes, and strong communication throughout the entire practice," said Ms. Bettridge. 

Ms. Davis says many specialists who see patients with the same condition throughout the day know "off the top of their heads" the most frequent codes they bill. Memorizing the new code set won't be as easy because of the sheer number of codes and the use of both letters and numerals. 

Dr. Spain adds that many physicians use a super bill or cheat sheet that has a list of their most commonly used codes. "When you're picking out of 50 or maybe 100, that's pretty easy to do, but now that your code set is going to be expanded, there's just no way you can put 1,500 codes on a claim form or the back side of your super bill." 

 Dr. Spain, who is a member of the AAPC National Advisory Board, says physicians are going to have to be much more conscientious in their documentation in order for their coders to be able to select the correct codes under ICD-10. 

"In ICD-9, we have 30 different codes for forearm fracture," he said. "In ICD-10, there are more than 100 possible codes for just a fractured ulna. So it's going to take office people more time to look at the documentation to make sure they're coding it properly. And there's going to be more burden on physicians to be sure that they have all that information in their notes." 

Because of that, physicians can't just simply document a fracture anymore. They will have to specify whether the encounter is an initial or subsequent visit and could also need to document whether the fracture represents a malunion, delayed union, nonunion, or normal healing. Similar requirements for additional information are necessary for the proper coding of countless other diagnoses. 

Nancy Spector, MS, director of electronic medical systems for AMA, says physicians need to analyze their practices and identify every way they use ICD-9 coding. All of those areas will have to transition to ICD-10. 

"This is one that's really going to touch on everything that the practice is doing, and that means clinical pieces, not just administrative pieces." 

Where's the Price Tag?

In a March 2004 report, the RAND Corp. concluded that ICD-10-CM and ICD-10-PCS were technically superior to ICD-9-CM. "If nothing else, they represent the state of knowledge of the 1990s rather than of the 1970s," the report stated. "They have also been deemed more logically organized, and they are unquestionably more detailed – by a factor of two in diagnoses (and 20 for injuries) and by a factor of 50 in procedures." 

Despite its benefits, implementation of ICD-10 is not without substantial cost for physicians, hospitals, health plans, other clinicians, and the government. In its report, RAND said the costs fall into three categories: training, productivity losses, and system changes. 

RAND estimated the total cost of ICD-10 implementation at between $425 million and $1.15 billion in one-time costs, plus $5 to $40 million per year in lost productivity. 

The estimated benefits over a 10-year period could amount to nearly $8 billion from more accurate payments for new procedures; fewer miscoded, rejected, and improperly paid claims; better understanding of the value of new procedures; improved disease management; and better understanding of health care outcomes, the report concluded. 

However, an earlier study by the Robert E. Nolan Co. painted a far less rosy picture. The Nolan report, issued in October 2003, concluded that implementation costs could run between $6 billion and $14 billion over a two- to three-year implementation period. 

Nolan also concluded there would be a short-term degradation of medical knowledge over a three- to five-year period because of the disconnects between ICD-9-CM and ICD-10-CM and ICD-10-PCS; a likely backlog of claims and payment delays; and an increased potential for fraud and abuse. 

The report also concluded that promised benefits of ICD-10, including reduced medical review of claims, improved fraud and abuse detection, and improved ability to negotiate contracts between providers and payers "are uncertain and unproven." 

Dr. Spain says the cost of ICD-10 implementation for a small practice such as his likely will be $2,000 to $3,000. "For larger practices, I think the cost could be substantial," he added. "If you're in a larger group practice of 20 or 30 doctors – or even 10 to 12 doctors – you could easily spend $5,000 to $10,000 getting employees trained, getting materials upgraded that you use in the office, and, on top of that, you may face some upgrade fees from your software providers." 

And, he says there almost certainly will be a loss of productivity while physicians and office staff learn the new code set. 

"For people who are in it at the last minute and haven't really prepared, I think there could be some serious productivity drops," he said. "If you spend five, six, eight minutes looking up codes for every encounter, you're not used to doing that. That's pretty quickly going to eat into one or two visits per day." 

Harvesting the Benefit

Still, there are some benefits doctors likely will see in the long run. Ms. Davis says there is a potential for increased cash flow to a physician's practice because of the ability to more accurately code for each diagnosis, thereby possibly allowing the physician to bill for a higher level of service. 

She says the added specificity and documentation of each encounter likely also will give physicians the data they need to defend them against health plan ranking systems. 

"Health plans use claims data to rank physicians," she said. "ICD-10 should allow physicians to more accurately reflect the medical conditions of the patient population that they're treating, thereby being useful in defending themselves in rating programs." 

Ms. Buckholtz adds that there will be no financial benefits for physicians in the short term but they should see a return on investment in just a few years. 

"ICD-10 is dollar driven, so if we use it correctly and in the way that it needs to be used and code the highest level of specificity…we can make cases to support the clinical necessity of treating our patients," she said. "Doctors should be able to qualify for financial incentives easier. 

"But that's going to evolve over a few years," she added. "It's not going to happen overnight. And it's all going to require the proper use of ICD-10."  

Getting Started

Even though physicians still have nearly two years to get ready for ICD-10, the experts say now is the time to get started. But Ms. Spector says it is a daunting task. 

"In general, what we're seeing is that physicians feel overwhelmed by all this and other things they've got on their plates right now," she said. Version 5010 of the HIPAA administrative transaction standards had to be implemented by Jan. 1, 2012, while physicians also are trying to deal with achieving meaningful use of electronic health records, developing accountable care organizations (ACOs), and more. 

Ms. Spector says there is some concern that older physicians may choose to retire early rather than go through the trouble and expense of implementing all these new requirements. And, she is concerned a lot of practices won't be ready to meet the Oct. 1, 2013, deadline. 

"From what I've been hearing, I don't know if practices have put enough work into this at this point," she said. "And there is concern that since they haven't put enough work into it now that they are going to be behind when the deadline arrives." 

Ms. Davis and Ms. Spector say that some physicians and other providers think there will be another reprieve from the implementation date. But they say that is unlikely because so many other new regulations and innovations in the health care system, such as ACOs, will rely heavily on the data provided by ICD-10. 

"That's wishful thinking that there will be a delay. Everything we've been hearing out of CMS is that there won't be a delay," Ms. Spector says. "ICD-10 is a fundamental piece to a lot of the other things going on so they can't delay having this implemented." 

Ken Ortolon is senior editor of Texas Medicine. 

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