To many of us, the final CMS rule to replace ICD-9 coding with ICD-10 seems incomprehensible…certainly complex. But, the big picture is simple and makes sense:

Healthcare requires transactions. Claims, prescriptions, procedure orders are all healthcare transactions. Healthcare transactions that are processed through IT systems — and most are — utilize specific codes to identify diagnoses and procedures.

Currently, the United States uses the ICD-9 coding system, which is over 30 years old, and does not reflect current healthcare diagnoses or procedures. Fortunately for patients, the United States has become become more knowledgeable and exact when making diagnoses. The same holds for ordering procedures. But, the ICD-9 codes are woefully lacking, without the flexibility to expand, or to record accurately in our more sophisticated healthcare environment.

ICD-10 is the World Health Organization’s healthcare code classification system. It is currently used by healthcare organizations in most industrialized nations, except the United States, when recording and communicating to trading partners such as payers.

ICD-10 includes ICD-10-C, which classifies more than 68,000 diagnoses.These are new  codes that provide for the level of detail needed for morbidity classification and diagnostics specificity in the United States. ICD-10-C also provides code titles and language that compliment accepted clinical practice in the US.

The system also includes ICD-10-PCS, which classifies more than 87,000 healthcare procedures, and is far more detailed and specific than ICD-9-CM.

In short, ICD-10 supports comprehensive reporting of higher quality data, reflecting modern advances in medicine, including current medical terminology. The ICD-10 code set is also more flexible for expansion and including new technologies and diagnoses.

The new federal rule requires that all HIPAA-covered entities (including hospitals, payers and other trading partners) convert their coding system to ICD-10 by October 1, 2014. If transactions are submitted after that date using the current ICD-9 code set, they will be rejected by Medicare and Medicaid. That means those claims will not be paid. This is a very big deal.

This is one of those cases where the devil is in the details; ICD-10 requires implementation. And this is not simple.

Achieving a new, required ICD-10 coding reality is a complex, time-intensive undertaking for hospitals of any size.  Implementation requires the training, support and involvement of numerous staff members in many departments. It involves many changes of systems, processes, and procedures. It will affect administration and billing departments, clinicians, HIM, EHR software, utilization review, internal and external data reporting, revenue cycle processes, systems integration management and more.

Moving to ICD-10 coding is a good thing, if we want to improve healthcare nationally. According to CMS, utilizing the greater detail and specificity in ICD-10 will:

• enable better clinical decision making, once integrated into providers’ EHR’s and EMR’s
• provide better business intelligence and performance improvement data sets and processes
• improve billing, reimbursement and revenue cycle processes
• support value-based purchasing by more accurately defining services and diagnoses
• further Medicare’s ability to detect and prevent program abuse
• ensure more accurate payments for new procedures and fewer rejected claims
• improve disease management, including worldwide disease monitoring and reporting

Some of these benefits are obvious; perhaps some are less convincing. Even if we don’t realize all of them as quickly as hoped, healthcare will be in a better place with ICD-10. But it will require enterprise-wide involvement and support. AND, it will require one to two years of concentrated effort. CMS gave us one deadline postponement. But another is not in the works. Today is October 19, 2012. Do the math.

It’s time to do this.

For more information about implementing ICD-10, go to the CMS website. To learn about how Phoenix can help you get there, go to our ICD-10  page.

Your thoughts? I would love to share them with our readers.