ICD-10: Healthcare's Information Age


The ICD-10 transition
On Oct. 1, 2014 everyone covered by the Healthcare Insurance Portability and Accountability Act of 1996 must transition to ICD-10, with very few exceptions. This mandated transition is not only going to change the current state of healthcare but is also going to affect how Americans socialize their personal health.

Alvin Toffler, author of "Future Shock" and "Third Wave" believed that society progresses in waves of technology and knowledge. For example America's first wave was our agricultural society, our second wave was our industrial society, and our third wave is our information society. Healthcare has exhibited similar transformations over time. Initially healthcare started as a community-based industry with physicians and hospitals serving their local communities; the next wave was the incorporation of healthcare into health systems and physician networks; the third wave is the pending nationalization of healthcare via accountable care organizations and national health plans that go beyond the current roles of Medicare and Medicaid. As healthcare transitions, what is the projected paradigm shift, and how will today's healthcare institutions survive the cost of these changes to the existing value systems?

These waves of transition are further complicated by the transitional state of the ICD Diagnosis and Procedural codes. The structure and utilization of the ICD-9 codes change when converted to ICD-10. How they change and the impact of these changes, is not understood, nor can they be anticipated using the information currently available. For healthcare professionals, this will be similar to learning a new language, one in which the pronunciation of words, character set used in written communication, sentence structure and phraseology all differ from the original language. The only constant is the topic of the communication.

In order to get ahead of this paradigm shift, physicians, hospitals and their staff are going have to rely on past portfolios of claims to analyze how these claims are most likely going to translate into ICD-10. Once a premise is developed physicians and hospitals must seek out payer partners to begin to test their theories and ensure they will be able to submit claims that payers are willing to reimburse under the new ICD-10 constructs.

What do the numbers say?
Now that we established the transition to ICD-10 is a monumental change in the way we describe and measure healthcare services, let's look at the numbers. In accordance with CMS data, there are currently 18,445 ICD-9 codes and 141,752 ICD-10 codes. The ICD-9 codes consist of 14,567 diagnosis codes and 3,878 procedure codes for a total of 18,445 codes, while the ICD-10 codes consist of 69,832 diagnosis codes and 71,920 procedures codes.

CMS has also provided maps to help understand how the ICD-9 codes relate to the ICD-10 codes. These maps account for all 18,445 ICD-9 codes, aside from 635 codes which were not mapped to any ICD-10 codes. This means that CMS mapped 17,810 ICD-9 codes to 62,832 ICD-10 codes, which means that 78,920 of the ICD-10 codes were not mapped at all.

So what about these unmapped ICD-10 codes: How do they fit into the equation? Do they represent new diagnosis or new procedures, or are they to be used to further document the services provided to a patient? When we begin to study the taxonomy of the codes based on these numbers, a shift in our value system begins to take shape.

The catalog of ICD-10
ICD-10 has been designed to provide a greater depth of specification. However, CMS did not map 78,920 ICD-10 codes, of which 53,227 are diagnosis codes and 25,693 are procedure codes. Further analysis of ICD-10 reveals that not all codes provide a deeper view of data.

In the example below we see the three ICD-9 codes for various forms of hypertension are only associated with one form of hypertension in ICD-10. In fact, one of the ICD-9 codes (401.0), indicates that when this code is used as part of the diagnosis, it is assigned a complication or comorbidity, which can significantly impact how a claim is reimbursed.

What does this have to do with the taxonomy of ICD-10 codes? It illustrates that the premise that ICD-10 codes are a more detailed version of ICD-9 codes is flawed. They do provide for a more detailed representation of patient services, but that does not always correlate back to the application of the ICD-9 code.

ICD-10 PCS codes have a multi-axial seven character alphanumeric code structure that can easily be extended to new codes. ICD-10 CM codes can have up to seven digits. The first three represent the category; the next three represent etiology, anatomic site, severity and the last position is the extension representing either the visit or sequelae.

These non-integrated taxonomies limit the cross-classifications between procedure and diagnosis codes. This is further complicated from the fact that there is no apparent correlation between the taxonomies in ICD-9 to those being deployed with ICD-10.
Adapting to a new value system
Today the primary focus of healthcare organizations has been on training coders on ICD-10 codes, but as time passes, both hospital and insurance administrators will begin to understand the full impact of these codes. Performance and quality metrics must be evaluated and improved upon for their derived benefits and accuracy. Within the IC-9 system, one code described an individual receiving a pacemaker now requires four codes within ICD-10, so how does this fit into an existing algorithm measuring the successful treatment of heart patients?  Will this change to include lateral descriptors in the ICD-10 taxonomy make way for a new set of analytics as it does in other professions, such as medical research? For example, what is the impact on a patient when the generator for a pacemaker is placed on the right or the left, and if in fact there is an impact, will hospitals need to know at the point of admittance whether the patient is right handed or left handed? If this is required knowledge, what will it take for electronic medical record vendors to upgrade their systems? These types of questions need to be answered in the upcoming year if hospitals and insurance companies are going to be able to successfully report, measure and analyze their operations with the tools currently available to them.

In addition, there is the issue of hospitals learning to code with 141,752 ICD-10 codes and payers only mapping a subset of those codes. Are insurance companies going to update their adjudication systems and plans with 141,752 ICD-10 codes? If they don't update, how will hospitals know which codes are in use and which are not? The lack of communications between hospitals and payers, the absence of utilization standards and total shortage in experience with ICD-10 codes could be a recipe for disaster. If a payer denies 35 percent of hospital claims, will that be enough to create cash flow deficits which may result in hospital closures? Cash flow deficits will occur after the transition no matter what, but CFOs are responsible for ensuring these deficits don't ultimately impact their bottom lines.

Even if a hospital system is thinking ahead and laying the framework to start dual coding claims, submitting both ICD-9 and ICD-10, are the insurance companies ready to switch over their adjudication systems to accept claims based on ICD-10 codes? Are hospital vendors prepared to support multiple dual coding efforts? The list of questions goes on with only one resolution: Hospitals and insurance administrators need to start testing now if they are to survive this looming paradigm shift.

Testing will not only help hospitals be more effective in utilizing codes likely to be recognized by payers, it will create a better understanding of what type of claims could be rejected and begin to develop plans to deal with those situations. However, until proper testing has progressed, conversations with payers happen, and/or the transition takes effect, healthcare systems will need to be agile and ready for anything.

When Y2K was an issue we were all aware of, the nation put tremendous resources into preparation for the inevitable. Healthcare is now faced with a similar inevitable transition, and the issue has not gained the general widespread attention it deserves; instead, it has been lost in the medical coding and health information management world. Those hospitals which have begun preparation through working with their third party payers and training medical coders are at an enormous advantage over those which haven't begun. Throughout history, this type of paradigm shift has proven to be a pitfall for organizations who have not laid the proper groundwork for success.

Mr. Boyer has over 30 years IT experience specializing in software engineering, business intelligence, performance management, data integration, healthcare and banking. As Chief Technology Officer for HRAA, Mr. Boyer manages the resources and technologies required to deliver HRAA’s services and solutions.


More Articles on ICD-10:

Survey: Hospitals Lag in Payer Preparations for ICD-10
Preparing for ICD-10's Impact on Your Revenue Cycle

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