Life Science Compliance Update

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October 23, 2013

CMS ICD 10 Implementation Countdown to October 1, 2014

Even with the Centers for Medicare and Medicaid Services (CMS) 1-year delay, the October 1, 2014 deadline to transition to the new coding system for medical diagnoses and inpatient procedures, the International Classification of Diseases, 10th Revision (ICD-10), is approaching fast. Because this transition requires changes across the medical reimbursement continuum, including providers, payers, third-party billers, and vendors, the time to prepare is now.


As we previously reported, the U.S. remains one of the few developed countries that has not transitioned to ICD-10 or a clinical modification. ICD-9, which was implemented in the U.S. in 1979, is an antiquated code set that no longer adequately meets the challenges of a 21st century healthcare system.  The ICD-9 codes used to report medical diagnoses and inpatient procedures will be replaced by the ICD-10 codes for services provided on October 1, 2014. ICD-10 classifications are the foundation for critical national healthcare initiatives such as meaningful use, value-based purchasing, payment reform, quality and quality reporting, and patient and population safety.

This represents a significant change for medical professionals. CMS notes that "ICD-10 codes are completely different from ICD-9 codes." The structure of the coding system will change from 3-5 character, mostly numeric, codes in ICD-9 to 3-7 character alphanumeric codes in ICD-10. Additionally, the number of procedural and diagnostic codes will increase from about 17,000 unique codes in ICD-9 to over 140,000 unique codes in ICD-10. Accurate coding is key to timely and accurate reimbursement for services rendered, and more codes creates concern about more mistakes.

According to CMS, the transition to ICD-10-CM/PCS is happening because:


  • ICD-9 codes provide limited data about patients' medical conditions and hospital inpatient procedures.
  • ICD-9 is 30 years old, it has outdated and obsolete terms, and is inconsistent with current medical practices.
  • The structure of ICD-9 limits the number of new codes that can be created, and many ICD-9 categories are full.
  • ICD-10 codes allow for greater specificity and exactness in describing a patient's diagnosis and in classifying inpatient procedures.
  • ICD-10 will also accommodate newly developed diagnoses and procedures, innovations in technology and treatment, performance-based payment systems, and more accurate billing.
  • ICD-10 coding will make the billing process more streamlined and efficient, and this will also allow for more precise methods of detecting fraud.


The difficulties in implementing ICD-10 obviously involve familiarizing staff with the new coding system. Less obvious are the changes to clinical documentation that will be necessary to allow coders and billers to accurately document services. The new specificity of ICD-10 means that a procedure like an angioplasty, for example, will shift from having 1 code to having 854 possible codes, reports MedPage Today. A new survey reveals that currently "nearly two-thirds of clinical documentation doesn't contain enough information for coders to use for billing under ICD-10."

Specific specialists, such as radiologists, should particularly be ready to modify their clinical data reporting, according to FierceMedicalImaging. Because of the frequent unspecified codes currently used by radiologists, and the message that may send about uncertainty of treatment, "radiologists should expect increased harassment from health information managers for better quality data," said Melody Mulaik, a coding and billing specialist who recently spoke at the American Healthcare Radiology Administrators fall conference in Baltimore.

Consequently, small to mid-sized hospitals appear to be farther along in ICD-10 preparation than individual medical groups. FierceHealthIT points out that "just 4.8% of more than 1,200 responding medical groups had made 'significant' progress in their ICD-10 implementation efforts" as of June 2013, according to a Medical Group Management Association (MGMA) survey. Hospitals are taking action on the need for coding and clinical documentation training, according to a recent survey by Health Revenue Assurance Holdings (HRAA). 64% of the 200 hospital professionals surveyed state that they have begun ICD-10-CM training, and 78% have begun ICD-10-PCS training for coding staff, up from 45% and 60% respectively in April. 68% of those surveyed have begun document improvement education for medical staff, compared to last quarter's 53%.


Unfortunately, coordination with payers appears to be a persistent challenge for small and mid-sized hospitals. In the survey announcement, chairman and chief executive of HRAA, Andrea Clark said, "[t]he survey data shows that while hospitals are focused on testing and preparing internally, they are not focused on mapping and the financial impact of the transition." Referring to the HRAA survey, FierceHealthcare suggests that "hospitals are opening up their organizations to substantial claims denials and delayed payments when the transition kicks in next October. So hospitals need to implement financial modeling and denial strategies now to avoid playing a guessing game with payers."


Going back to the intent behind the implementation delay, coordination between payers and providers is essential to ensure a smooth transition to ICD-10.


The American Health Information Management Association (AHIMA) recommends that ICD-10 training begin no more than six to nine months before the October 1, 2014 compliance deadline. Different organizations will have different training needs, but AHIMA projects that 16 hours of training regarding diagnostic codes may be sufficient for experienced coding professionals on ICD-10-CM; moreover, physician practices may not need as much training due to limited code usage. AHIMA estimates that the ICD-10- PCS will likely require an additional 16-24 hours of training regarding inpatient procedure coding.

CMS has several provider resources, broken down by provider type and size, including suggested timelines and checklists. For providers who are just starting the transition to ICD-10, CMS recommends the following action steps:


  • Establish a transition team or ICD-10 project coordinator, depending on the size of your organization, to lead the transition to ICD-10 for your organization.
  • Develop a plan for making the transition to ICD-10; include a timeline that identifies tasks to be completed and crucial milestones/relationships, task owners, resources needed, and estimated start and end dates.
  • Determine how ICD-10 will affect your organization. Start by reviewing how and where you currently use ICD-9 codes. Make sure you have accounted for the use of ICD-9 in authorizations/pre-certifications, physician orders, medical records, superbills/encounter forms, practice management and billing systems, and coding manuals.
  • Review how ICD-10 will affect clinical documentation requirements and electronic health record (EHR) templates.
  • Communicate the plan, timeline, and new system changes and processes to your organization, and ensure that leadership and staff understand the extent of the effort the ICD-10 transition requires.
  • Secure a budget that accounts for software upgrades/software license costs, hardware procurement, staff training costs, revision of forms, work low changes during and after implementation, and risk mitigation.
  • Talk with your payers, billing and IT staff, and practice management system and/or EHR vendors about their preparations and readiness.

CMS also recommends coordinating ICD-10 transition plans with partners and testing the revised system well before the compliance deadline. According to FierceHealthcare, "virtual testing, which allows healthcare facilities to manually test ICD-10 system readiness, is emerging as a viable solution for revenue cycle leaders and IT departments who are facing this dilemma."

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