Switch to ICD-10 Codes Long Overdue, But Could Be Costly

Learn about the impact the upcoming switch to ICD-10 will have on physicians and medical other medical professionals.

Most experts agree that the switch to ICD-10 codes, scheduled for Oct. 1, 2013, is long overdue. It is impossible to deny that medicine and the nature of diagnoses have changed dramatically over the past three decades. Physicians, their staffs and their medical billing services need to be well-educated and well-prepared so that the new code set is used not to delay or deny reimbursement, but to help improve patient care. Depending on whose study you read, the costs of switching could be significant.

ICD-10 codes will force physicians to be more specific than ever with how they code their patients’ diagnoses. In some cases, there will be dozens of new diagnosis codes to choose from where there used to be only a few (ICD-9 has about 13,000 total codes, version 10 has 68,000). The new codes are now primarily alphanumeric and contain seven characters, and they are organized differently. For example, injuries are grouped by anatomical site rather than injury category.

Why the added complexity? According to the Centers for Medicare and Medicaid Services (CMS), ICD-9 code is woefully outdated, while ICD-10 code better reflects modern medicine. The new codes will give payers, regulators and analysts the ability to refine reimbursement methodologies and conduct public health surveillance more effectively as well.

Both CMS and the American Healthcare Information Management Association (AHIMA) say using ICD-10 codes will remove ambiguities and decrease the need to include supporting documentation when submitting claims. The increased specificity will make it easier to assign codes correctly, which should result in fewer errors, fewer unpaid claims and therefore fewer requests to resubmit claims with supporting documentation. At least one study, however, predicts claims using the new codes will require more documentation, not less, at a cost of tens of thousands of dollars.

Some experts also predict ICD-10 will simply give insurance companies several new tools to delay and deny reimbursements.

Will payers need more or less documentation under ICD-10?

The current set of codes, the International Classification of Diseases (ICD), Version 9, has been in place for more than 30 years, and the U.S. is actually years behind other countries in adopting ICD-10. For example, the United Kingdom, France and Australia have all been using the new version since the 1990s. The ICD-10 code set consists of two parts, but physicians will only use ICD-10-CM, developed by the Centers for Disease Control and Prevention. The use of Current Procedural Terminology (CPT) codes will not be affected.

It won’t be easy shedding ICD-9. Physicians use (and frequently struggle with) these codes daily. Technical schools across the country train and certify “Professional Coders” to work in medical offices, and consultants have built valuable businesses to help refine the codes chosen by doctors. Then there are the insurance companies that have vast information systems built around the use of ICD-9 codes to support payments and justify denials.

And let’s not forget the hundreds of vendors – from developers of practice management software and electronic medical records, to the multiple billing services and revenue cycle management firms – all are knee-deep in ICD-9 on a daily basis. For software companies, ICD-9 codes are typically part of the logic used in various system components or billing modules. Patient problem lists, appointment systems, reports, and more will be impacted.

It also won’t be cheap for medical offices to switch to using ICD-10 codes, according to a study commissioned by a coalition of national medical trade groups including the American Medical Association and other specialty groups. Cost estimates range from nearly $84,000 for a small practice to just under $300,000 for a practice with 10 doctors. The study, performed by Nachimson Advisors LLC, points to typical factors contributing to these costs, such as staff training, revising superbills, IT system changes and cash flow disruptions.

But the study also predicts that analyzing payer contracts, dealing with coverage determinations and “increased documentation costs” will be significant, warning that “additional documentation could be required to support a patient’s treatment plan”.

Out of all the factors cited by Nachimson, the costs of increased documentation contribute more than 50 percent of the predicted additional costs – an ominous warning and certainly contrary to one of the advantages that CMS says the new code set is supposed to deliver.

What to be wary of under ICD-10

With a deadline more than three years away, physicians, administrators and their staffs aren’t yet making any real moves to prepare for ICD-10. In its official communications, the American Association of Professional Coders (AAPC) does not recommend any training just yet.

But consultants are warning of a turbulent switch to the new system. And because many practices are adopting new technologies today, such as electronic medical records or upgraded revenue cycle management services, doctors are warned not to contract with companies whose systems will soon be obsolete.

“What if you purchase new medical software today, but in 2013 the vendor demands a huge fee to ‘upgrade’ to ICD-10? And what if you refused to pay that fee, what then?” warned Chris Acevedo, owner of Acevedo Consulting, a Delray Beach-based firm that specializes in compliance and coding. “Same question for billing services – if they are providing your practice software, don’t contract with them unless they are prepared to adopt ICD-10 without any additional costs to you. Get it in writing.”

Acevedo also warns that even though payers will stop accepting ICD-9 on 9/30/13, your practice or your billing service will still be dealing with the obsolete code set for several weeks, if not months. “That’s because the claims you filed before the deadline used ICD-9, and you’ll still need to track those claims and be sure they are paid appropriately,” he said.

Brian Foster is the Director for the South Florida Region of Avisena Inc. He can be reached at (786) 546-5131 or bfoster@avisena.com

Some ICD-9 and ICD-10 code set examples: ICD-9 vs. ICD-10

Pressure Ulcer Codes
ICD-9-CM Codes
- 9 location codes (707.00 – 707.09)
- Show broad location, but not depth

ICD-10-CM Codes
- 125 codes, show more specific location as well as depth
- For example:
- L89.131: Pressure ulcer of right lower back, stage I

ICD-10 Codes - Resources:

ICD-10 Preparation Checklist
September issue of AHIMA’s “ICD-10 Newsletter”
CMS ICD-10 Fact Sheet
“The Impact of Implementing ICD-10 on Physician Practices and Clinical Labs – A Report to the ICD-10 Coalition”

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