ICD-10: Rough Seas Ahead

Have you heard of “ICD-10?”  In addition to the many requirements of the Affordable Care Act, this may turn out to be another big headache for insurers and providers.  According to CMS’ web site, under the authority granted to it under the 2003 Health Insurance Portability and Accountability Act (HIPAA), if you want to do business with Medicare or any other health insurer…

“ICD-10 codes must be used on all HIPAA transactions, including outpatient claims with dates of service, and inpatient claims with dates of discharge on and after October 1, 2013. Otherwise, your claims and other transactions may be rejected, and you will need to resubmit them with the ICD-10 codes. This could result in delays and may impact your reimbursements, so it is important to start now to prepare for the changeover to ICD-10 codes.”

Which is why the DMCB paid attention to this “Report from the Field” Health Affairs article “Coding Complexity: US Health Care Gets Ready For The Coming Of ICD-10.”

The Disease Management Care Blog was reminded that “International Classification of Disease” or “ICD” is an alphanumeric billing system used to specify and describe diseases and treatments.  Originally developed in 1763, it was adopted by the World Health Organization in 1948 for use in public health reporting.  It was later used by physicians, hospitals and health insurers to specify diagnosis coding and payment levels.  For example, persons with “diabetes” may think they saw a doctor for that particular disease, but as far as their insurer goes, they were really seen for “250.”

As medical care has grown more complex, ICD has undergone periodic updates of its nomenclature, making each successive version more detailed. The ninth version (or “ICD-9”) is currently in use in the United States, while most of the countries in Europe use “ICD-10.”   In ICD-9, there are about 14,000 diagnosis billing codes; in ICD-10 there are 69,000.  ICD-9 has 3800 treatment procedure codes, while ICD-10 has 72,000.  As a result, if you are a health insurer, care management provider, public health advocate, government organization or a fan of Disease Management Care Blog interested in data and billing accuracy, you’d probably prefer ICD-10.

It turns out that if you’re a doctor or hospital, you might hate it.

That’s probably how providers are going to react on Oct 1, 2013 when the Feds start requiring ICD-10 instead of ICD-9.  That’s because they’ll have had to retrain the folks working in their billing offices and buy totally revamped software for a brand new coding system.  For a three physician practice, that could cost as much as $83,000. For a hospital, it’ll cost millions.

As this unfolds there will be two things for DMCB readers to to watch out for:

1) Some providers are not going to be able to meet the deadline.  That means CMS and other commercial health insurers will have to decide whether to accept any ICD-9 bills and use their own information technology systems “remap” the codes into “ICD-10-speak.”  If they don’t, they may have to refuse payment, which could drive some physicians out of business.  There is even talk of providers and insurers setting up credit lines in case there are any disruptions in cash flow.

2) The switch from ICD-9 to 10 could lead to another round in the coding arms race.  Despite the coming advent of bundled payments, there will be plenty of fee-for service in the system. Insurers will be sorely tempted to use the greater claims detail to “downcode” anything that doesn’t meet their guidelines, while providers might use ICD-10 to “upcode” and unbundle their services in attempts to shake more money from the insurers.

Jaan Sidorov, MD, is a primary care internist and former Medical Director at Geisinger Health Plan with over 20 years experience in primary care, disease management and population-based care coordination. He shares his knowledge and insights at Disease Management Care Blog, where this post first appeared.