Running head: ICD-10: CHANGING PHYSICIAN PRACTICE1

ICD-10: Changing Physician Practice

Elizabeth M. Cartwright

University of West Florida

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Executive Summary

On January 15, 2009, the Secretary of the Department of Health and Human Services

released a final rule calling for the adoption of a new edition of the International

Classification of Diseases (ICD) standards known as the 10th edition using Clinical

Modification (CM) and the Procedure Coding System (PCS). The final rule adopts ICD-

10-CM for reporting patient diagnoses and ICD-10-PCS for reporting hospital inpatient

procedures – both will replace ICD-9-CM. The final rule, available at

http://www.gpo.gov/fdsys/pkg/FR-2009-01-16/pdf/E9-743.pdf, was published in the

January, 16 2009 Federal Register. (AHA, 2009, p.4)

October 1, 2014 will be the dawn of a new age for the healthcare service industry. A new coding

set that aids communication of patient diagnoses between healthcare organizations defined as

covered entities will be required. This policy brief will cover what changes are to be expected

and what decisions and plans need to be made for a group physician practice. The transition will

affect both the public and private sector of the healthcare service industry. The change will also

impact the public as the new coding set will affect patient care. All healthcare organizations will

be affected to some capacity and have a vested interest in the success of ICD-10. The board of

directors of this group practice will be responsible for the successful transition of the company to

ICD-10. All proposals are recommended. The following links provide an overview of what areas

of the group physician practice will be affected and free ICD-10 resources at the company’s

disposal.

AAPC - ICD-10 Affecting Practice

AAPC - ICD-10 Free Resources

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The Compliance Date for ICD-10 is October 1, 2014

The International Classification of Diseases (ICD) code sets are to be used in all

transactions involving the electronic data interchange (EDI) of healthcare data between covered

entities, defined by HIPAA as including health plans, health care clearinghouses, and health care

providers “who transmit any health information electronically in connection with certain

transactions” (HHS, 2003, slide 4). Transactions are specified as claims and encounter

information, payment and remittance advice, claims status, eligibility, enrollment and

disenrollment, referrals and authorizations, coordination of benefits and premium payment

(CMS, 2013). For example, if a health care provider sends a claim electronically to a health

insurance company to request payment for medical services, ICD-10-CM codes must be used on

the claim to report the patient’s diagnoses. “Transactions conducted on paper, through a

dedicated fax machine, or via the phone are not subject to the HIPAA provisions” (AMA, 2011).

As a physician group practice, the company will only have to prepare for the ICD-10-CM

code set, as ICD-10-PCS is used by hospitals to identify inpatient facility services for the

allocation of hospital services. Therefore the abbreviated term ICD-10 will be used to mean

ICD-10-CM only. In this brief, the following queries will be answered in order to address what

decisions should be made by the company:

What decisions, plans, and actions need to be undertaken by the company to achieve an

easy transition into the use of ICD-10?

Which roles and operations within the company will be affected by the change, and how

should staff members prepare for those changes?

What expectations should the company have during the initial months of the transition?

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HIPAA Changed the Game

In an effort to decrease the administrative costs of health care, Title II of the Health

Insurance Portability and Accountability Act of 1996 included the Administrative Simplification

statutes, which requires the establishment of national standards for electronic health care

transactions, that the Department of Health and Human Services (HHS) was called to draft. The

use of the ICD-10-CM for the reporting of patient diagnoses is one the rules enacted by the HHS

as a part of aforementioned national standards. To be clear, the use of ICD-10 to transmit/report

patient diagnoses is only required for electronic transactions between covered entities that were

both specified earlier in this brief. In all other instances, the use of ICD-10 for reporting

diagnoses is not required, although the vast majority of transactions today are electronic and

done between covered entities.

International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-

CM) is provided by the Centers for Medicare and Medicaid Services (CMS) and the National

Center for Health Statistics (NCHS), for medical coding and reporting in the United States. “The

ICD-10-CM is a morbidity classification for classifying diagnoses and reason for visits in all

American health care settings” (CMS, 2010). The ICD-10-CM is based on the ICD-10, the

statistical classification of disease published by the World Health Organization (WHO) (CMS,

2010 & ICD-10 Clinical Modification, n.d.).

Medical codes, both diagnostic and procedural, are a communication tool utilized by

medical, healthcare and health research entities. The call for the transition to ICD-10 is due to the

limitations of ICD-9-CM, the coding set currently in use. Those advocating the switch to ICD-10

criticize that “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, as

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many ICD-9 categories are full” (CMS, 2013). ICD-10 has been acclaimed as more logically

organized and with some 69,000 codes, it is more comprehensive than ICD-9-CM that consists

of 14,000 codes in Volume 1 and 2. Advocates also argue that ICD-10 will provide the ability to

study more specific data about each patient’s conditions and treatments which allows for more

effective case management and better coordination of care.

(Hailes, n.d., slide 22)

Those against the transition argue that training employees on the new coding set and

implementing changes in the daily operations of company work flow will be costly, time

consuming and slow administrative processes, not streamline them. “Those that promote ICD-10

predict the ability to have more specified coding will improve patient care and improve insurance

payment rates. The argument against this is that not enough is known about ICD-10 to make

such predictions” (Hicks, n.d.). The majority of this company and invested parties believe that

the use of ICD-10 will be most difficult for the first two years, but become increasingly less so as

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the healthcare industry and the company become more adapted to the changes. The first year is

predicted to be the most discordant. While the implementation of the new coding set may

initially seem tedious and involve startup and maintenance costs, this organization is hopeful that

ICD-10 will lead to better communication between industry entities and better patient care.

The change to ICD-10 and will affect both the public and private sector of the healthcare

industry. Both private sector insurance companies, such as Cigna, and publicly-funded insurance

programs, such as Medicare and Medicaid, will process claims that have assigned ICD-10 codes.

Consequently, health service companies that rely on insurance reimbursement as a main source

of revenue will be affected as well and all other companies involved with healthcare billing,

coding, administration, finance, and some health research organizations. Both the public and

private sectors of healthcare are heavily integrated and reliant on each other, and therefore the

implementation and use of ICD-10 will be a major shift in how the healthcare industry as a

whole operates.

In the Interest of Patient Care

The Centers for Medicare and Medicaid does suggest that medical practices take several

years to prepare for the implementation of ICD-10. However, many practices have lagged and

procrastinated in their preparation for ICD-10, including this office, so it’s best to make haste

from this point on.

The successful transition to ICD-10 will be a team effort as all staff members on both the

clinical and administrative side of company operations will be affected by the new coding set to

some capacity and need training. The organization’s chief officers will be responsible for making

the key decisions on what should be done in order for the organization to be properly prepared

for the transition, and team leaders will responsible for making sure their respective staff carry

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out the decisions made and complete training. As most physicians receive payment for health

services by way of insurance reimbursement, most of their revenue is directly related to

successful coding and claims processing. Therefore, correct coding is a vital function of any

physician’s office, and correct coding relies on proper documentation. All systems and work

process that use ICD codes or document health information for ICD coding first need to be

identified by staff members in order for the organization to understand what work processes need

to adjust and what the training needs of each staff member will be.

The implementation and use of an electronic health record (EHR) and practice

management (PM) system that has the capability of assigning ICD-10 codes has already been as

executed as part of meaningful use. “Meaningful use is the set of standards defined by the

Centers for Medicare & Medicaid Services Incentive Programs that governs the use of electronic

health records and allows eligible providers and hospitals to earn incentive payments by meeting

specific criteria” (HealthIT.gov, n.d.). An EHR program that has computer-assisted-coding

(CAC) software will be the first step in getting the office staff accustomed to seeing the new

codes. “CAC is a software application that analyzes medical records and calculates which codes

should be assigned” (Stack, 2013). CAC software can be compared to spell-check for Word. It

will not replace the need for human coders, but will make the transition easier and assist medical

coders in their work. A good time to begin having the company EHR and PM system assign

ICD-10 codes will be as soon as possible before the October 1st compliance date, preferably next

to ICD-9 codes, so staff can compare the differences between the codes and learn the differences

between the coding sets. Many EHR software programs have been updated to allow this feature,

including the one currently in use at our office.

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ICD-10 will require greater specificity in documentation. Physicians and other clinical

staff, such as nurses, physician assistants, and medical transcriptionists and scribes will need to

be educated on the differences between ICD-9 and ICD-10 and what clinical information will

need to acquired for proper coding. Documentation is crucial for patient care, serves as a legal

document, as it validates the patient care provided and is needed for correct coding, billing, and

reimbursement.

Medical coders need as much information as possible to assign the proper medical code.

That should lead to fewer physician queries. That improves the medical billing and

clinical workflows.

Medical claims are rejected and down-coded because there is not enough documentation

to support diagnoses. Properly coded claims are less likely to be denied and can help

medical coders appeal denials.

Improving clinical documentation will make it easier to protect against healthcare fraud

and dispute any fraud charges.

Clinical documentation improvement (CDI) is a necessary part of making computer

assisted coding (CAC) systems work for healthcare providers. CAC systems depend on

thorough clinical documentation. Without it, the systems won't be able to be much

assistance.

(Natale, 2013)

The following two graphs demonstrate what clinical information will be needed to select

the correct ICD-10 codes:

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(Hailes, n.d., slides 17 & 23)

The first graph explains what each of the seven placeholders represents in an ICD-10 code. The

category, for example could be a fracture of the humerus, but specific additional information will

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need to be known and properly documented in the patient’s chart. As the second graph shows,

the site, healing progress and visit occasion, initial or subsequent, will also have to be

documented in the patient’s chart in order for fracture to be properly coded.

Medical coders will have to be educated in the different guidelines of the ICD-10-CM

code book, how the code set is organized and become familiar with codes that will be used most

frequently by the practice. “Coding professionals recommend that training take place

approximately six months prior to the ICD-10 compliance deadline” (CMS, 2013). Medical

coders and billers will both need to become familiar with National Coverage Determinations

(NCDs) and Local Coverage Determinations (LCDs) that govern Medicare reimbursement that

will be updated to reflect ICD-10 diagnoses codes. “Both NCDs and LCDs establish policies that

are specific to an item or service. They also define the specific diagnosis (illness or injury) for

which the item or service is covered. LCDs may vary from region to region” (Smiley, 2013).

Coverage determinations for other insurance companies will also be updated, and the practice

administrator will need to work with the company’s contracted insurance agencies to stay abreast

of the changes. Medical billers will need to be aware that EOBs (explanation of benefits) that

accompany payment or denials of medical services from insurance companies will also reflect

the updated NCDs and LCDs. “An explanation of benefits, commonly referred to as an EOB

form, is a statement sent by a health insurance company to covered individuals explaining what

medical treatments and/or services were paid for on their behalf. The EOB is commonly attached

to a check or statement of electronic payment” (Explanation of benefits, n.d.).

It should also be expected that payment for medical services will be delayed due to the

change to ICD-10, which will be a major shift for insurance companies as well and may slow

their reimbursement time. Payors, i.e. insurance companies such as Blue Cross Blue Shield, may

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modify the terms of the company’s contracts, payment schedules or reimbursement rates. This

will affect the company’s relationship with insurance companies and influence the flow and

turnaround time of our revenue cycle. The practice administrator will need to communicate with

insurance companies regularly to learn what changes should be expected and instruct the practice

in how staff should prepare. Furthermore, someone needs to investigate how clearinghouses,

such as Availity, that scrub claims for data entry errors and coding mistakes are preparing for the

transition. More denials should be expected in the beginning of the transition, and medical billers

should be aware that this might occur and be prepared to spend more time appealing denials and

resubmitting claims. The practice administrator will also need to make sure that the electronic

claims system is updated to Version 5010, which accommodates ICD-10 codes and has been the

required for sending electronic claims for insurance reimbursement since January 1, 2012.

The practice will need to budget for time and costs related to ICD-10 implementation,

including expenses for system changes, resource materials, and training. Costs are difficult to

estimate as options are incredibly numerous. Training and resource options should be thoroughly

researched and a budget set around the options chosen. Several training days and company

meetings will need to be scheduled to keep everyone informed and up-to-date on company and

policy changes. Resource materials should be researched and purchased early enough for staff to

become familiar with the materials. System and company operational changes and updates

should be implemented and thoroughly tested before the October implementation.

All of the suggestions discussed are recommended in urgency, as the only alternatives

include doing less or nothing at all to prepare, and since the transition to ICD-10 will so heavily

impact this company and the healthcare industry, further procrastination and lack of preparation

is cautioned against. The practice administrator and clinical director are recommended be the

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leaders in charge of the ICD-10 transition, and company team leaders should be in charge of

directing the company in preparation. It’s hoped that this policy brief has explained why such

haste is necessary and given the company an idea of what changes need to be made. October 1,

2014 will be a new beginning for the healthcare service industry.

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Bibliography

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Retrieved from http://www.ncvhs.hhs.gov/091210p06b.pdf

American Medical Association. (2011, March 18). HIPAA 101: How it started and what’s next.

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fact-sheet.pdf

Centers for Medicare and Medicaid Services. (2010). ICD-10-CM official guidelines for coding

and reporting 2010. CMS.gov. Retrieved from

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Explanation of benefits (insurance). (n.d.) Retrieved October 11, 2013 from Wikipedia:

http://en.wikipedia.org/wiki/Explanation_of_benefits_%28insurance%29#cite_note-1

Hailes, J. (nd.) Truly understanding clinical documentation improvement for ICD-10. IHS.gov

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HealthIT.gov (n.d.). Meaningful use: What is meaningful use? HealthIT.gov. Retrieved from

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Hicks, J. (n.d.). The great ICD-10 debate. About.com. Retrieved from

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ICD-10 Clinical Modification. (n.d.) Retrieved October 11, 2013 from Wikipedia:

http://en.wikipedia.org/wiki/ICD-10_Clinical_Modification

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implementation. ICD10WATCH. Retrieved from http://www.icd10watch.com/blog/your-

clinical-documentation-ready-icd-10-implementation

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and Coding For Dummies [Excerpt]. Retrieved from

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and-billi.html

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