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ICD-10 Implementation & Compliance
HCCA Regional Conference
Newport Beach
June 2011
HCCA Regional Conference
Today’s Objectives
Speakers Introduction
ICD-10 Background and Introduction
Medical Records Documentation Impact
Benefits of ICD-10
Agenda
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Industry Trends
Focus Areas
Post ICD-10 Implementation
Q&A
Today’s Objective
Our goal is to engage in a dialogue about ICDOur goal is to engage in a dialogue about ICD--10 and how HCCA 10 and how HCCA is facing off against this challenge. is facing off against this challenge.
Our objectives are to:Our objectives are to:
��Provide you with an overview of key difference between ICDProvide you with an overview of key difference between ICD--9 9 and ICDand ICD--1010
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��Understand industry challenges and concernsUnderstand industry challenges and concerns
��Focus areas to prepare you and your organization for ICDFocus areas to prepare you and your organization for ICD--1010
Today’s Speakers
Name Summary of Relevant Experience
Gloryanne BryantRegional Managing Director HIM
Kaiser Foundation Health Plan Inc &
Hospitals
• An RHIA (Registered Health Information Administrator), a RHIT (Registered Health Information Technician), Certified Coding Specialist (CCS) and a Certified Clinical Documentation Specialist (CCDS) with over 30 years of experience in the health information management (HIM) profession
• Has conducted numerous ICD-9-CM and CPT coding, DRG, MS-DRG and APC (OPPS) workshops for hospital based coders
• Given an array of presentations on data quality, medical necessity, compliance and clinical documentation improvement to management executives and healthcare administrators
• Over 14 years of health care experience focusing on strategic cost
management, operational performance improvement and revenue cycle
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Tracey AegerterPrincipal
Deloitte Consulting LLP
enhancement in integrated delivery systems, academic medical centers, and
large multi-state provider organizations
• Regional leader for Deloitte’s ICD-10 efforts and a core member of Deloitte’s
national ICD-10 team
• Recently completed ICD-10 assessments for large provider clients in
academic and non-academic settings with both large inpatient and outpatient
components
Christopher BarattaSenior Manager
Deloitte Consulting LLP
• Over 13 years of experience in managing full scale, end-to-end Provider
Revenue Cycle projects for major academic medical centers and large, multi-
facility healthcare systems, medical and physician groups and DME clients
• Core member of Deloitte’s national ICD-10 team
• Recently completed ICD-10 assessments for three large health systems in the
West Coast
The most widely used diagnostic taxonomy in health care is the World Health Organization’s International
Statistical Classification of Diseases and Related Health Problems (ICD). ICD is a coding system of
diseases and signs, symptoms, abnormal findings, complaints, social circumstances and external causes
of injury or diseases that is used internationally to classify morbidity and mortality data for vital health
statistics tracking, used for research and in the U.S. for health insurance claim reimbursement.
When a physician evaluates a patient, the physician collects subjective and objective data (the “history and
physical”) to diagnose the patient’s condition and develop a plan for treatment which is documented in the
record. That documentation then is translated into clinical codes.
ICD-10 Introduction
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record. That documentation then is translated into clinical codes.
Once in place ICD-10 is expected to result in fewer miscoded, rejected and improper reimbursement
claims.
Readiness and preparations for implementation are key.
No Impact on Use of CPT® and HCPCS Level II Codes
SOURCE: http://www.who.int/classifications/icd/en/
ICD-10 Global Implementation
Canada
• Began adopting in 2001
• Over 5-year
implementation
• ICD-10-CA for morbidity
• Coding is used for
statistical purposes
rather than for billing
Germany
• Adopted in 1998
• ICD-10-AM for morbidity
• Implementation took 3 years
United Kingdom
• Adopted in 1995
Russia
• Adopted in 1999
China
• Adopted in 2002
Canada
• Began adopting in 2001
• Over 5-year
implementation
• ICD-10-CA for morbidity
• Coding is used for
statistical purposes
rather than for billing
Germany
• Adopted in 1998
• ICD-10-AM for morbidity
• Implementation took 3 years
United Kingdom
• Adopted in 1995
Russia
• Adopted in 1999
China
• Adopted in 2002
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Countries who have adopted ICD-10
Australia
• Adopted in 1998
• Implementation took 2 years
• 2 years from decision to change to actual implementation was insufficient lead time to build the classification and educate users
France
• Adopted in 1996
South Africa
• Adopted in 1996
Brazil
• Adopted in 1998
Countries who have adopted ICD-10Countries who have adopted ICD-10
Australia
• Adopted in 1998
• Implementation took 2 years
• 2 years from decision to change to actual implementation was insufficient lead time to build the classification and educate users
France
• Adopted in 1996
South Africa
• Adopted in 1996
Brazil
• Adopted in 1998
ICD-10 Sits Among the Top Issues the Industry Has to Weigh
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Given the challenges and trends, it will be challenging to achieve uniform adoption of
ICD-10 across the industry by October, 2013
Given the challenges and trends, it will be challenging to achieve uniform adoption of
ICD-10 across the industry by October, 2013
ICD-9-CM Coding Overview
� Codes in ICD-9-CM are based on the state of medical knowledge of the late 1970s* with periodic
updates applied.
� As medical advances continue by leaps and bounds ICD-9-CM will continue to inadequately address
the present state of medical knowledge - regardless of annual updates. The uses of coded data has
expanded beyond the intended purposes of more than 30 years ago. The current ICD-9-CM system:
− Lacks sufficient specificity and detail,
− Is running out of space, and the limited structural design cannot accommodate advances in medicine
and medical technology and the growing need for quality data,
− Is obsolete and no longer reflects current knowledge of disease processes, contemporary medical
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− Is obsolete and no longer reflects current knowledge of disease processes, contemporary medical
terminology, or the modern practice of medicine,
− Hampers the ability to compare costs and outcomes of different medical technologies, and
− Cannot support the US transition to an interoperable health data exchange in the US
ICD-10(International Classification
of Diseases version 10)
The ICD is the international standard diagnostic
ICD-10 Changes
Significant Increase in Clinical Granularity
The Federal Government through the Centers for Medicare and Medicaid Services (CMS) is driving the healthcare industry to upgrade diagnosis and procedure coding standards (ICD-10) by October 1, 2013.
ICD-10: Advancing Healthcare…
ICD-9 CM (Diagnosis)
5 digit numeric
~ 14,000 unique codes
ICD-10 CM (Diagnosis)
7 digits alphanumeric characters
> 68,000 unique codes
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classification for general epidemiological, health management purposes and clinical use
ICD-10 CM & PCS is an upgrade of the U.S. developed Clinical modification (ICD-9-CM) of Diagnosis and Procedure Codes, first adopted in 1979
~ 14,000 unique codes
ICD-9 CM (Procedure)
5 digit numeric
~ 4,000 unique codes
> 68,000 unique codes
ICD-10 PCS (Procedure)
7 digits alphanumeric characters
~ 72,000 unique codes
ICD-10 Implication
� Pervasive Impacts
- The intent is not for ICD-10-CM or ICD-10-PCS to replace CPT – so practices that are
describing patient visits, radiology, laboratory procedures, etc. in the ambulatory setting will
continue to use CPT and its annual updates for describing the care that we provide in those
settings
- The potential impact of ICD-10 to health care providers includes multiple system upgrades and
testing cycles, increased human capital needs, significant training, increased claim denials,
delayed payment, lost or reduced reimbursement and impacts to cash flow, and more complex
financial reporting.
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financial reporting.
� Comprehensive Benefits
- Improved ability to measure health care services
- Increased sensitivity when refining grouping and reimbursement methodologies
- Enhanced ability to conduct public health surveillance
- Decreased need to include supporting documentation with claims
Healthcare Setting
Setting ICD-10-CM ICD-10-PCS CPT/HCPCS
Hospital Inpatient X X
Hospital Outpatient X X
Physician X X
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Laboratory X X
Behavioral Health X X
Long Term Care X X
All Others X X
5010/ICD-10 Compliance Timeline
2010 2012 20132011
December 31, 2010
Internal testing of Version
5010 must be complete to
achieve Level I Version
5010 compliance
December 31, 2011
External testing of
Version 5010 must be
complete to achieve
Level II compliance
October 1, 2013Claims for services provided on or after this date must use ICD-10-CM/PCS codes for medical
diagnoses and inpatient procedures
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January 1, 2010
Payers and providers
should begin internal
testing of Version 5010
standards for electronic
claims
January 1, 2011
Payers and providers
should begin external
testing of Version 5010
for electronic claims
CMS begins accepting
Version5010 claims.
Version 4010 claims
continue to be accepted
January 1, 2012All electronic claims must use Version 5010. Version 4010 claims are no longer accepted
ICD-9-CM & ICD-10 Code Freeze
• Vendors, system maintainers, payers, and
educators requested a code freeze
• There will be no updates to ICD-9-CM on
October 1, 2013 as the system will no longer
be a HIPAA standard.
• The ICD-9-CM Coordination & Maintenance
Committee will continue to meet twice a year
during the freeze
• The public will comment on whether new
codes should be created during the freeze
Date Description
Oct 1, 2011 Last regular, annual updates to both ICD-9-CM and ICD-10 will be made
Oct 1, 2012 only limited code updates to both ICD-9-CM & ICD-10 code sets to capture new technology and new diseases
Oct 1, 2013 only limited code updates to ICD-10
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codes should be created during the freeze
• Any codes that do not meet the criteria of
being a new technology or new disease will
be held for consideration of inclusion in ICD-
10 after the freeze ends
code sets to capture new technology and new diseases
Oct 1, 2014 regular updates to ICD-10 will begin
Volume of Codes
50,000
60,000
70,000
80,000
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0
10,000
20,000
30,000
40,000
ICD-9-CM ICD-10-CM ICD-10 (WHO)
ICD-9-CM ICD-10-PCS ICD-10 (WHO)
Diagnosis
Procedure
The Basics of the ICD-10-CM Change (Diagnosis)
The ICD-10-CM diagnosis code set is a full replacement of the ICD-9 code set that will provide additional granularity for diagnosis codes. This additional granularity is the primary driver of value.
X X X X X.
ICD-9-CM ICD-10-CM
X X X X
Category CategoryEtiology,
anatomic site,
manifestation
Etiology, anatomic
site, manifestation
.Extension
An Example of Structural Change
.An Example of One ICD-9 code being
• 34,250 (50%) of all ICD-10-CM codes are related to the musculoskeletal system
• 17,045 (25%) of all ICD-10-CM codes are related to fractures• 10,582 (62%) of fracture codes to
distinguish ‘right’ vs. ‘left’•~25,000(36%) of all ICD-10-CM codes to distinguish ‘right’ vs. ‘left’
X X X
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Type 1 diabetes mellitus with diabetic neuropathy,
unspecified
E 1 0 4 0.
Type 1 diabetes mellitus with diabetic mononeuropathy
E 1 0 4 1.
Type 1 diabetes mellitus with diabetic amyotrophy
E 1 0 4 4.
Type 1 diabetes mellitus with other diabetic
neurological complication
E 1 0 4 9.
Diabetes mellitus with neurological
manifestations type I not stated as
uncontrolled
2 5 0 6. 1
An Example of One ICD-9 code being
Represented by Multiple ICD-10 Codes
One ICD-9
code is
represented
by multiple
ICD-10 codes
The industry expects that mapping ICD-9 to ICD-10
codes will be a complex task
The Basics of the ICD-10-PCS Change (Procedural Coding System)
ICD-10-PCS
X
Section
Example of ICD-10-PCS Structure
X
Body
System
X
Root
Operation
X
Body
Part
X
Approach
X
Device
X
Qualifier
� Each can be either alpha (not case sensitive) or numeric (numbers 0 –9 are used)
� Letters O and I are not used to avoid confusion with numbers 0 and 1
The ICD-10-PCS procedural code set is designed to provide standardized terminology and expandability for procedure codes.
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Examples:
� 0FB03ZX Excision of liver, percutaneous approach, diagnostic
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� Provides detailed information on procedures� Ample space for capturing new technology and devices� Logical structure with clear, consistent definitions
Advantages to PCS
� 0FB03ZX Excision of liver, percutaneous approach, diagnostic
� 0DQ107Z Repair, esophagus, upper, open with autograft
Medical Record Documentation
ICD-10-CM codes are more robust, with up to seven digits of specificity, requiring numerous changes to
current state.
Example changes that a provider will need to implement with ICD-10-CM include:
� Laterality: ICD-10 introduces laterality to diagnosis coding
� Combination codes: ICD-10 greatly expands the use of combination codes, where a single code is used
to classify 2 diagnoses or a diagnosis with an associated secondary process
� Episode of care: ICD-10 relies heavily on categorizing the episode of care as initial or subsequent
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� Greater specificity: ICD-10 is much more specific in identifying disease and conditions and the
documentation will need to reflect the exact diagnosis to take advantage of the improved granularity
ICD-10 Documentation Specificity Example
Patient Summary:
Patient presents to the ED with a wound to the ear from a fall. Patient is experiencing palpitations due to under-dosing of Digoxin as his prescription ran out last week.
Patient placed on IV Dig and sutures were necessary.
Code Code Description
Added Specificity Needed for ICD-10:
ICD-9
872.00785.1E885.9
Open Wound of External EarPalpitationsFall on Same Level
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Type of wound InjuryForeign body or notLaterality of ear injuryEpisode of careUnder-dosing & Under-dosing intentional or notAnatomical site of procedureApproach for procedure
ICD-9 Coding
E885.918
Fall on Same LevelSuture of Ear
ICD-10 Coding
S01.311AT45.526AR00.2Z91.138W1849xA09Q0XZZ
Laceration of the right ear w/o foreign body, initial encounterUnder-dosing of anti-arrhythmic, initial encounterPalpitationsUnder-dosing unintentionalFall from same level, initial encounterRepair of the right external ear, external approach
CMS GEMs vs. CMS Reimbursement Mappings
CMS Reimbursement Mappings, which can be thought of as a crosswalk, eliminate alternative paths for
ICD-10 to ICD-9 mappings to enable such scenarios as accepting ICD-10 claims but adjudicating internally
against ICD-9.
ICD-9ICD-9 ICD-10ICD-10 ICD-9ICD-9 ICD-10ICD-10Forward MappingForward Mapping Backward MappingBackward Mapping
GEMs Reimbursement Mapping
Mapping Terminology
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ICD-9 CM ICD-10 PCS ICD-10 PCSICD-9 CM
Other Repair & Plastic
Operation on Trachea
3179
Dilation of Trachea with Intraluminal
Device, Via Natural or Artificial
Opening
0B717DZ
Dilation of Trachea with Intraluminal
Device, Via Natural or Artificial
Opening Endoscopic
0B718DZ
Dilation of Trachea with Intraluminal
Device, Via Natural or Artificial
Opening
0B717DZ
Dilation of Trachea with Intraluminal
Device, Via Natural or Artificial
Opening Endoscopic
0B718DZ
Other Intubation
Respiratory Tract
9605
Other Repair & Plastic
Operation on Trachea
3179
Other Intubation
Respiratory Tract
9605
The Expected Benefits of ICD-10 are Significant
Today’s data needs are dramatically different than they were 30 years ago when ICD-9 was introduced. ICD-10 will advance healthcare in many ways, with benefits accruing across following major categories:
Quality Measurement
� Data availability to assess quality standards, patient safety goals, mandates and
compliance
� Higher quality information for measuring healthcare service quality, safety, and efficiency
Public Health� Improved disease and outbreak information
� Improved ability to track and respond to international public health threats
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Research� Better data mining for increased analysis of diagnosis, treatment efficacy, prevention, etc
� Recognition of advances in medicine and technology
Organizational Monitoring and
Performance
� Enhanced ability to identify and resolve problems and ability to differentiate payment
based on performance
The benefits are significant, but it will require investment in
changes to processes and technology across operations
How to Determine Benefits
Providers need to consider how the significant business & technology investment in the ICD-10 transition
can demonstrate benefits to the organization.
Current Operations Technology/Innovations
Clinical
� Enhanced clinical documentation and coding accuracy to enhance the assessment and monitoring of patient safety and quality indicators, as well as compliance with third-party payor coding and billing rules and regulations.
� Provision of higher-quality data due to improved medical coding accuracy and granularity
� Become ICD-10 early adopter using ICD-10 data through mapping tools earlier than the compliance date to enable longer trend timelines
� Include clinical documentation requirements related to ICD-10 in the EHR build and preparing for meaningful use
� Enhance clinical documentation programs now to begin having clinical discussions with physicians
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� Expanded use of data granularity for diagnosis, procedure and case mix groups to profile a patient’s condition or track length of stay related to improving utilization management.
begin having clinical discussions with physicians about documentation elements required for ICD-10 without starting stand and deliver education programs
Financial
� Improved claims adjudication and provider reimbursement rates between provider and health plans due to appropriate payments for new procedures, and fewer miscoded and rejected claims due to greater specificity in ICD-10 codes.
� Increased cost savings through effective infrastructure planning. Cost savings can be realized by correctly predicting resource utilization, appropriate use of site of service and improved care delivery team communication.
� Conduct financial model analysis to determine impact of mapping on current state reimbursement
� Use ICD-10 data to assess growth and strategy analysis prior to October 1, 2013
� Understand potential payer business rule, eligibility, medical management and product changes
� Develop models to use ICD-10 to further evaluate costs and potential savings opportunities
Progression Toward Compliance
While Health Plans are in front of others, the industry as a whole is behind in preparations for ICD-10
remediation.
Health PlansHealth Plans
Assessing Planning Remediating
5010
ICD-10
Industry Trends
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ProvidersProviders
State
Government
State
Government
5010
ICD-10
ICD-10
5010
Large providers such as academic
medical centers and teaching
hospitals are beginning to assess
the impact of ICD-10.
Even with this trend, we expect an
overall lag across the provider
segment (particularly in outpatient
settings) toward October 2013
readiness
Large providers such as academic
medical centers and teaching
hospitals are beginning to assess
the impact of ICD-10.
Even with this trend, we expect an
overall lag across the provider
segment (particularly in outpatient
settings) toward October 2013
readiness
Other countries with less complex health care systems have required 5 years to implement ICD-10
Focus Area – Operations
Operational Processes Case management, marketing, decision support,
credentialing, and Research / Clinical Trials
Clinical Documentation, Coding, and Training
Revenue Cycle Scheduling, financial clearance/counseling,
registration, claims processing, and contracting
Compliance: Regulatory affairs, coding requirements, and documentation standards
Human Resources: Staffing, employee relations, contingent workforce planning, training, organizational effectiveness / change management
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Revenue Cycle • Identify key revenue cycle functions that are currently
using ICD-9 (i.e., scheduling, financial clearance, claims
processing, denials management)– Outline ICD-10 action steps and implementation approach,
including:
– Staffing/Training
– Process/Policy and procedure redesign
– Communications
Clinical Documentation, Coding, and Training• Determine workforce training required for ICD-10
preparation – Estimate capacity of current workforce to support transition
– Review current clinical documentation and coding practices
– Identify alternative training programs and internal/external
training resources required
– Review HR and training support infrastructure
– Develop program timeline and budget
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– Communications
– Compliance concerns
Operational Processes• Identify current clinical use of ICD-9 (i.e., problem lists,
EHR documentation)
• Engage leadership in impacted functional areas– Identify data users impacted (i.e., case management,
marketing, decision support)
– Document operational gaps, heat map, and identify linkages to
technology and finance requirements
– Determine ownership for readiness activities
• Evaluate current policies and procedures
• Identify relevant management reports
– Develop program timeline and budget
– Determine who would need be trained based on assessment
– Determine the method of training
– Determine the training resources
Physician
• Identify necessary updates to clinical documentation
practices such as templates for EHRs to support data
needs
• Consider use of computer assisted coding solutions for
professional fee ICD-10 code assignment
• Physician training for clinical documentation
requirements should be phased over next 3 years
• Link clinical outcomes data and quality reporting
Focus Area – Finance
Financial ManagementWorking capital, debt
covenants, and budgeting
A/R ManagementPayor ContractingReimbursement, coverage, and contracts
Financial Forecasting: Forecasting financial results, and net revenue
Financial Reporting: Financial results and reporting, and decision support / cost accounting
Payor Contracting• Understand payor approach to code mapping , APR
DRGs and impact to reimbursement– Evaluate potential changes to reimbursement formulas, contracts,
etc.
– Understand change in net reimbursement based on changes in
acuity and new codes
– Identify tools to enable payment modeling with new codes
– Understand current payment monitoring and compliance tools and
Financial Management• Advise on the impact to Cash Flow and Working Capital,
including advise on:– Establishing additional reserves (if applicable)
– Managing working capital
– Drafting Capital and Operations Budgeting for next three years
• Identify dual processes and related reporting– Advise on financial reporting and forecasting requirements during
transition period from ICD-9 and ICD-10 codes
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– Understand current payment monitoring and compliance tools and
practices
– Define future state under payment monitoring approaches and
tools
– Draft contracting/negotiation plan
– Draft and prioritize list of payors (contracted and non-contracted)
– Confirm payors ability for reimbursement under ICD-9 and ICD-10
– Confirm payor assumptions regarding cash flow during transition
and long term
A/R Management• Advise on potential impact to coding productivity and
DNFB/billing/payment changes
• Estimate potential impact to cash flow during transition
and long term
• Identify dual processes and related reporting– Receiving payable claims during the transition period from ICD-9
and ICD-10 codes
– Matching referrals that contain ICD-9 and ICD-10 codes
transition period from ICD-9 and ICD-10 codes
– Advise management in connection with its efforts to identify
opportunities to improve cost accounting
• Advise on financial impact to Research and/or Intellectual
Property
Focus Area – Information Technology
Revenue Cycle SystemsPatient access, coding, billing, and
remittance processing
Clinical SystemsEMR, ancillary systems, coding
and computer assisted coding solutions
Core Financial SystemsG/L, financial reporting, and
forecasting systems
Enterprise Analytics/Data Warehouse Systems: Business intelligence, operational reporting
Interfaces: Internal, and EDI
ICD-9 Systems & Data Current State• Identify impacted applications and databases
• Determine data sources and flow (source, target,
interfacing transformations, etc.)
• Identify impacted data warehouses and systems
generating ICD-9 based reports
ICD-10 Transition Planning• Estimate level of effort for in-house programmed systems
and standalone databases
• Estimate level of effort for upgrading vendor systems
• Estimate level of effort for interface updates
• Develop Workplan and timeline for all IT components
• Develop estimated budget
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ICD-10 Risks and Strategy Analysis• Evaluate readiness/contracting implications
• Initiate communication with vendors to assess remediation
plans and technical/vendor risks
• Determine ability to update in-house (non vendor
maintained) systems
• Define systems at risk for 5010 and for ICD-10/dual ICD-9
capabilities
• Determine replace vs. remediate strategies
• Provide recommendations and co-developed plan for 5010
transition
• Develop estimated budget
Impacts Post ICD-10 Implementation
The impact of the ICD-10-CM transition will not end on the October 1, 2013 Because pended or
denied claims are expensive, and are generally dealt with through a manual process, any increase in the
number of claims not processed or paid will first decrease provider cash flow, then increase both provider
workload and plan workload to process the denials.
To reduce the risk of reduced cash flow, providers and staff need to know and understand the changes in
documentation and coverage requirements well ahead of time to adapt in time for implementation.
Productivity decreases short term when people are in training or learning a new skill. These
slowdowns result in loss of productivity, including charge capture and reimbursement, and can affect the
financial health of a practice. Anticipate a decrease in productivity by measuring and analyzing the impact
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financial health of a practice. Anticipate a decrease in productivity by measuring and analyzing the impact
of the transition prior to beginning the training process.
Planning ahead also allows you to staggered training, helping to limit the impact on productivity.
Next Steps and Summary
� Situational analysis
� Identify stakeholders
� Assess impact
� Formulate strategies, communication plan, and identify goals
� Develop education/training plans for employees at all levels
� Develop information systems/technology systems change implementation plan that includes
testing and "go live" dates
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testing and "go live" dates
� Plan for documentation changes
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