ICD-10 Switch Requires Time, but Practices Lag in Planning

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On Oct. 1, 2013, physician practices and hospitals will be required by CMS to have transitioned from the 30-year-old ICD-9-CM codes to the ICD-10-CM (clinical modification) and ICD-10-PCS (procedural coding system) codes. The switch will cost time and money because ICD-10 has nearly nine-times more codes. Many practices and facilities, however, have not even begun a preliminary assessment of what the transition will require, which could negatively impact their bottom line.

Time is of the essence

The ICD-10 codes will have different code compositions, level of detail and structure, and will expand the number of ICD-9 codes from almost 17,000 to approximately 155,000. ICD-10 will be broken down into two categories: procedural and diagnostic code sets. ICD-10-CM will jump to 68,000-plus diagnostic codes from the current 14,000. The new procedural codes, which will be integrated into the hospital setting but not independent practices, will increase from the current 3,824 designations to 72,589.

The old codes can no longer keep up with advances in technology, improvements in procedures and reclassification of disease states, according to many healthcare providers and regulators. The new codes will allow greater specificity and enable more claims to be processed without rejection.

“We have seen in recent years, especially with the increase in medical necessity requirements, many more claims being rejected,” says Kim Charland, vice president of consulting at MedLearn in St. Paul, Minn. “ICD-9 is definitely out of date and many of its categories are full, resulting in codes being placed in sections that are not pertinent, and making selection more difficult.”

Two advisory groups—the North Carolina Healthcare Information and Communications Alliance and the Workgroup for Electronic Data Interchange—estimated that the complete ICD-10 conversion process will take providers 966 days to complete. This means that facilities should have started  the planning process Jan. 18, 2010, to comply with the Oct. 1, 2013, deadline.

“ICD-10 is the biggest thing to hit healthcare in a very long time and everyone needs to start preparing now to ensure a smooth transition as the compliance deadline rapidly approaches,” says Charland.

Yet, some practices may be dodging the implementation phases in hopes of an extension, says Robert Tennant, senior policy advisor at the Medical Group Management Association (MGMA). Because the government has delayed HIPAA requirements and other deadlines in the past, practices feel it may delay the ICD-10 conversion and do not want to spend money now if they don’t have to, says Tennant. He adds that CMS has firmly stated that it will not grant any additional extensions.

Study findings published in the September issue of the Journal of AHIMA (American Health Information Management Association) affirmed that most practices and facilities are lagging in their transition. Of the 838 AHIMA members surveyed, 59 percent said they had not yet begun either 5010 (an update to insure the new codes conform to HIPAA compliance) or ICD-10 implementation and 20 percent said that they would not begin preparing to make the switch for another six months. Only 6 percent said they were almost finished with implementation, while 10 percent said they were half done.

AHIMA suggests that not implementing the appropriate steps to prepare for the ICD-10 transition could jeopardize reimbursement and result in increased claims rejections, thus making it important to begin the transitionary process to ICD-10 now, rather than later.

Fixing what’s broken

Because the current ICD-9 codes do not accommodate various disease states or recent medical advances, they prohibit coders from adding proper specificity to medical claims. With ICD-10, coders will be exposed to greater granularity and laterality.

While the jump in the number of codes seems “astronomical, there really is a method to the madness,” according to Peggy Hapner, consulting services manager at MedLearn. “In fact, ICD-10 is much more logical than ICD-9. Generally, ICD-10-CM incorporates greater specificity, clinical data and information relevant to ambulatory and managed care encounters.”

The increased laterality will allow coders and other staff to identify exactly where an injury or procedure takes place in the body. In ICD-9, for example, coders could not specify whether a broken wrist occurred on the left or right side of the body. Additionally, the increased level of granularity will incorporate codes from an expanded range of disease states and procedures.

The new code sets will eradicate eponyms, such as a McBride bunionectomy or Mayo bunionectomy. They will reflect details of the actual procedure—such as approach, devices used and body parts— rather than who performed it first, says Shannon E. McCall, a certified coding specialist and director of Coding HCPro, a Marblehead, Mass.-based compliance training company. “Because the ICD-10 code sets are so comprehensive, those involved with coding and billing will need to better understand anatomy and physiology to recognize how and where a procedure is performed on a patient.”

For example, in ICD-9, there is a single code used for the repair of an artery. In ICD-10, that number jumps to 195—there are 65 different arteries and three approaches to repair from which to identify and select, says Kathy DeVault, a certified coding specialist and manager of professional practice resources at AHIMA.

For cardiovascular practices, says McCall, ICD-10-CM diagnosis codes will have combination codes to encompass commonly associated diseases such as coronary artery disease with and without unstable angina. In ICD-9-CM, two codes would be assigned, but in ICD-10-CM, there is a single combination code to cover both conditions. Other significant changes in the cardiovascular chapter include the decreased timeframe for acute MIs (AMIs) in ICD-10-CM from eight weeks down to four weeks. The AMI codes also will add specificity by identifying the vessel involved (e.g., left main coronary artery versus left anterior descending artery). Additionally, a separate category was developed to identify subsequent AMIs. The meaning of “subsequent” in ICD-10-CM differs from the definition in ICD-9. In ICD-9, “subsequent” refers to the episode of care; in ICD-10-CM, “subsequent” refers to the patient suffering another AMI during the four weeks following the “initial” AMI.

No one should be overwhelmed by “the large number of new codes,” says DeVault. “The transition to ICD-10 will require a change in our habits as coders by getting more into specific documentation to see what we are currently missing.”

Before facilities can make the conversion to ICD-10, they must first transition from HIPAA 4010/4010A1 to X12 Version 5010 of the HIPAA transaction standards no later than Jan. 1, 2012. This will allow their systems to accept various differences between the new and old codes including the alphanumeric, seven-character system in ICD-10 versus the five-numeric character ICD-9 standard. Based on the AHIMA survey, 77 percent of facilities have either not started or just begun to determine what needs to be done for the 5010 conversion—despite the fact that AHIMA had recommended implementation planning teams be in place by September 2009.

Preparing for the switch

An important first step in ICD-10 implementation is choosing a team of physician representatives, coding professionals, billing/finance professionals, IT staff, business associates and vendors—depending on practice/facility size—and performing a practice impact analysis. “You will first need to identify all the places in the practice that ICD-10 conversion will impact,” says Charland.

AHIMA: Impact Survey Reveals Lag in Transition Planning for ICD-10
The American Health Information Management Association (AHIMA) surveyed its members to determine who had performed a comprehensive systems audit for ICD-10 compatibility. The numbers are not pretty. Close to 60 percent had not even started to assess all systems applications and databases using ICD-9-CM codes, identify all systems changes that will need to be made and identify new or upgraded hardware/software requirements for the ICD-10 conversion. Image source: Source: Journal of AHIMA 2010; 81[9]: 22-26
Because of the excessive level of change required with the ICD-10 code sets, which include increased clinical documentation, training and hardware and software changes, practices will need to build their budgets accordingly.

In October 2009, a report conducted by Nachimson Advisors on behalf of the ICD-10 Coalition, a range of organizations including MGMA, the American Academy of Professional Coders and the American Medical Association, sketched out the estimated costs for small, medium and large practices making the ICD-10 conversion.

The report found that the costs are higher than what CMS had first projected for the conversion. The estimated costs per practice were:   
  • $83,290 for a small, three-physician, two-administrative staff practice;
  • $285,195 for a medium-sized, 10-provider practice with a full-time coder and six administrative staff; and
  • $2.7 million for a larger practice consisting of 100 providers, with 10 full-time coders and 54 medical records staff.

“These are going to be potentially expensive changes. You will want to plan well in advance for this conversion because you will need to build these costs into your budgets,” says Tennant. “As a practice administrator, you don’t want to request a check for $20,000 from your physicians two weeks before the compliance deadline. That just won’t work.”

System changes

Iowa is considered a front-runner in ICD-10 preparation and has performed a full gap analysis. But the Iowa Medicaid Enterprise (IME), a state-funded program run by Iowa’s Department of Human Services in Des Moines, has found the conversion more involved than expected. The state program is combining the HIPAA 5010 transaction sets, National Council for Prescription Drug Programs version 3.0 and ICD-10 transitions into one implementation project, according to Jody Holmes, unit manager at IME.

IME is deciding which of the following three compliance levels to choose for ICD-10: minimal (costing between $8.8 million and $10.7 million), intermediate (costing between $11.6 million and $14 million or optimal (complete implementation, costing between $15 million and $17.6 million).

“We are trying to figure out what it will cost to manage the various systems after implementation,” Holmes says. For example, the minimal level of compliance would incorporate “crosswalks” or GEMS (general equivalence mapping systems), a process where ICD-9 codes are mapped to ICD-10 codes and run through to claims. “This option would not likely be a very clean process and would produce a lot of confusion that could require us to perform manual intervention,” she says. “The down-the-road operational costs would be much greater with this process, despite lower upfront expenses.” She suggested an optimal compliance would result in cost savings on the back end.

While Holmes says that a handful of vendors are geared up from a claims-payors perspective to make the shift to ICD-10, installing Medicaid claims processing systems have been estimated to take 36 months, and for some states, 50 months. “There is no way we would be able to have a new system in the timeframe for the HIPAA 5010 transactions that will take place Jan. 1, 2012,” she says.

Rather than investing in a brand new system, states have begun looking instead to update their current IT systems for ICD-10. Similarly, Tennant says that the best thing practices can do at this point is to contact their vendor and identify when the necessary software upgrades will be available and whether these modifications are covered under current maintenance contracts.

Benefits vs. potential setbacks

Due to the added specificity, the ICD-10 codes will call for additional coder training and close scrutiny of clinical documentation strategies, says Hapner. The Nachimson Advisors report estimated that the costs to bulk up on clinical documentation alone could be $44,000 for a small two- to three-physician practice. There also is uncertainty about how health plans will react to the increased granularity of the codes and what they will require before claims are paid.

“We have to increasingly work with physicians to extrapolate data to enhance documentation strategies,” says Hapner. “This could be a potential pitfall because this level of documentation is not currently found in office notes or cardiology reports.”

Additionally, Tennant suggests the switch to ICD-10 may be most operationally difficult for smaller practices that utilize clearinghouses to help submit their claims. “Practices won’t be able to push off ICD-10 on clearinghouses because clearinghouses will only document what they have in front of them. If the clinician does not provide sufficient detail to populate the claim with the most appropriate ICD-10 codes, then there is the potential that the claim will be rejected, leaving the practice with cash flow issues.”

Training requirements will vary according to practice/facility size. For physician offices that are only dealing with ICD-10-CM, formal training is estimated to range between one and two days, according to McCall. Training for inpatient facilities will be longer because they are dealing with both ICD-10-CM and ICD-10-PCS.

Training also has to be timed carefully. “If you wait too long, you may not get it in, but if you send staff for training too early, you may have to send them back for a refresher course as the deadline gets closer,” says Tennant.

CMS recommends that training take place six to nine months prior to the compliance date. However, there will still be a long on-the-job learning curve for coders once the ICD-10 codes go live. Estimates range between three to six months, but some say those are conservative. In any event, the transition, if not properly handled, could result in a significant loss of productivity. The flip side of that is the greater detail that the new codes will allow, which will create less opportunity for claims to be rejected by payors, leading to more captured revenue.

The benefits of staying ahead of the ICD-10 and HIPAA 5010 transitions clearly outweigh any headaches along the way, particularly because there is no getting around their implementation. At the very least, according to AHIMA, facilities should establish steering committees to oversee implementation, hold regular meetings to educate key stakeholders, begin an impact assessment for all systems applications and databases using ICD-9-CM codes and identify all systems changes that will need to be made. The consequences of not doing so will result in unpredictable timelines and ever-ballooning budgets as facilities will inevitably wind up scrambling to make the transition in a haphazard manner. In other words, do your homework now or pay later.