ICD-10 Transition Update: What Health Lawyers Need to Know

Page 1March 21, 2013

Prepared for AHLA – Institute on Medicare and Medicaid Payment Issues

American Health Lawyers AssociationInstitute on Medicare and Medicaid Payment Issues

March 21, 2013

ICD-10 Transition Update: What Health Lawyers Need to Know



• What is ICD‐10 and why is it important to the healthcare community?

• What is the current regulatory status of ICD‐10?

• Organizational Impact – Operational and Finance

• Readiness and Implementation Strategies

Learning Objectives



What Are ICD Codes?• The International Classification of Disease (ICD) codes

are the international classifications for all diseases and many other health problems for purposes of health management, including:– Analysis of the general health of population groups,

– Monitoring of the incidence and prevalence of diseases;

– Monitoring other health problems in relation to other variables such as the characteristics and circumstances of the individuals affected, reimbursement, resource allocation, and quality. http://www.who.int/classifications/icd/en/

• ICD codes are now recorded on many types of health records and is a key component in reimbursement, quality and utilization review and other data management activities

http://www.who.int/classifications/icd/en/



ICD History

19901977196519551948

ICD-6

ICD-7

ICD-8 ICD-10

ICD-9



• Replaces ICD-9 - Not a revised version of ICD-9

• ICD-10 represents a complete change from one coding system to a new one structured in an entirely new way

• Like all medical coding systems, it provides a way to condense textual clinical information into “codes” that can be used for billing and other data-based applications

What is ICD-10?



There is no relationship between the two code sets – they have completely different structures and uses

ICD-10 Is Really Two DifferentCode Sets

ICD-10-CM• International

Classification of Diseases, 10th Revision, Clinical Modification

ICD-10-PCS• International

Classification of Diseases, 10th Revision, Procedure Coding System



What’s ICD-10-CM?

ICD-10-CM• Diagnosis Coding System – Used to report the patient’s

condition (i.e., what’s wrong with the patient)

• Direct replacement for ICD-9-CM Volumes 1 & 2

• Will be used in all settings – hospital inpatient, hospital outpatient, physician office, etc.

• Like ICD-9-CM, developed and maintained by the World Health Organization (WHO) and the National Center for Health Statistics within the Centers for Disease Control



The ICD-10-CM “Official Guidelines”

• As with ICD-9-CM, ICD-10-CM is supplemented by a set of “Official Guidelines” that are designated as part of the ICD-10-CM code set by the HIPAA “medical data code set” regulations (45 CFR § 162.1002(C)(2))

• The Official Guidelines provide detailed guidance on the use of the ICD-10-CM code set

• The 2013 ICD-10-CM Official Guidelines are available from http://www.cdc.gov/nchs/icd/icd10cm.htm#10update

http://www.cdc.gov/nchs/icd/icd10cm.htm



ICD-10-CM Example



What’s ICD-10-PCS?

ICD-10-PCS• Procedure Coding System – Used to report surgical

procedures performed

• Direct replacement for ICD-9-CM Volume 3

• Only used in a hospital inpatient setting (and only for reporting facility services)

• Like ICD-9-CM Volume 3, ICD-10-PCS was developed and is maintained by CMS



The ICD-10-PCS “Official Guidelines”

• CMS has released a set of “Official Guidelines” for ICD-10-PCS

• Like the ICD-10-CM Official Guidelines, the ICD-10-PCS Official Guidelines are designated as part of the ICD-10-PCS code set by the HIPAA “medical data code set” regulations (45 CFR § 162.1002(C)(3))

• The 2013 ICD-10-PCS Official Guidelines are available from https://www.cms.gov/Medicare/Coding/ICD10/2013-ICD-10-PCS-GEMs.html

https://www.cms.gov/Medicare/Coding/ICD10/2013-ICD-10-PCS-GEMs.html





• CMS has developed a bi-directional crosswalk, referred to as the General Equivalence Mappings (GEMs), between ICD-9-CM and ICD-10-CM/PCS

• There are GEMs for over 99 percent of all ICD-10-CM codes and for 100 percent of the ICD-10-PCS codes

The GEMs



Practical Mappings GEM Examples – ICD-9 to ICD-10

ICD-9-CM: 902.41 Injury to renal artery

ICD-10-CM GEM: S35.403A Unspecified injury of unspecified renal artery, initial encounter

ICD-9-CM: 50.24 Percutaneous ablation of liver lesion or tissue

ICD-10-PCS GEM: 0F503ZZ Destruction of Liver, Percutaneous Approach



How Big Could It Be?ICD-9-CM

Diagnosis: 14,025

Procedures: 3,824

820.02, Fracture of midcervical section of femur, closed

ICD-10-CM & ICD-10-PCS

Diagnosis: 68,069

Procedures: 72,589

S72031A, Displaced midcervical fracture of right femur, initial encounter for closed fracture

S72031G: Displaced midcervical fracture of right femur, subsequent encounter for closed fracture with delayed healing

S72032A: Displaced midcervical fracture of left femur, initial encounter for closed fracture

S72032G: Displaced midcervical fracture of left femur; subsequent encounter for closed fracture with delayed healing



When is it official?

January 1, 2010

• Payers and providers should begin internal testing of Version 5010 standards for electronic claims

December 31, 2010

• Internal testing of Version 5010 must be complete to achieve Level I Version 5010 compliance

• Providers should form ICD-10 sponsorship team

January 1, 2011

• Payers and providers should begin external testing of Version 5010 for electronic claims

• CMS begins accepting Version 5010 claims

• Version 4010 claims continue to be accepted

December 31, 2011

• External testing of Version 5010 for electronic claims must be complete to achieve Level II Version 5010 compliance

January 1, 2012

• All electronic claims must use Version 5010

• Version 4010 claims are no longer accepted

October 1, 2014

• Claims for services provided on or after this date must use ICD-10 codes for medical diagnosis and inpatient procedures

• CPT codes will continue to be used for outpatient services

Per the Department of Health and Human Services, the compliance date for implementation of ICD-10-CM and

ICD-10-PCS is October 1, 2014.



Why is ICD-9 being replaced?B

arrie

rs: • ICD-9 is outdated

• Developed in 1970s, based on medicine and technology that is outdated and no longer used

• Lack of detail for payment for today’s medicine

• No space for new codes

Ben

efits

: • ICD-10 allows greater detail for laterality, primary encounters, external causes of injury, preventative health, as well as socioeconomic, family relationships, lifestyle related problems

• More space to accommodate evolving technology

• Supports exchange of health data with other countries (think of AIDS, SARS, H1N1)



ICD-10 Global perspective

ICD-9 code set is no longer maintained by the WHO

The USA is the only developed nation still using ICD-9. All other G-7 nations have transitioned to ICD-10

As of 2002, 99 countries have adopted ICD-10 or a clinical modification for coding and reporting morbidity data

As of 2002, 138 countries have adopted ICD-10 for coding and reporting mortality data

What are mappings used for?

http://media.scoutwiki.org/images/c/ce/Earth_globe.svg



Implications of ICD-10 TransitionICD-10 presents both extensive opportunities and challenges

• ICD-10 code sets will allow for accurate description of diagnoses and procedures that is critical for health care utilization, health policy, and cost containment.

• ICD-10 will provide for specific diagnosis and treatment information that can improve quality measurements and patient safety, as well as better evaluation of medical processes and outcomes.

• Accuracy will facilitate better payment in pay-for-performance (P4P) programs, more accurate health grades, and again, improved quality of care.

• Scope and complexity of transition is significant!



ICD-10 Impact and Implementation



ICD-10 ImpactScope

• All HIPAA covered providers and entities

– Includes, payers, health plans, DME, pharmacy, vendors

• Other Code Sets

– Current Procedural Terminology (CPT) Codes

– Healthcare Common Procedure Codes (HCPCS)

– No impact



Organizational Impact

ICD-10

• Physician Documentation• Physician Integration• Physician Performance

• Staffing Effectiveness• Assessment of Revenue

Impact• Process Improvement• Decision Support Reporting

Impact

• IT Systems• Capability, Communication• Functionality• Vendor Preparedness

• Documentation Analysis• ICD-10 Education• Process Improvement• Monitoring

Physician Office

Post Acute Services

• Front – Scheduling, Access Areas• Middle – Coding, CDI, Case Management• Back – Billing, Reimbursement

Health Information

Management

Information Technology

PhysicianOperational Planning

Revenue Process



Potential Financial Impact

Rand Corporation estimates industry-wide costs associated with transition

to range between $475 million and $1.5 billion over 10 years

Decrease in Cash Flow / Loss of Revenue• Industry experts from CMS and AHIMA estimate the

following:

– Denial rates will increase

– Accounts receivable days will be extended

– Coder productivity will decline

– Claims-error rates will increase

Healthcare organizations and providers will be hindered with payment declines for more than 2 years after the implementation Date of October 1, 2014



Estimated Financial Impact: Revenue Cycle

AR (Days Increase)

Write-Off (potential $

lost)Incremental

Staff ($)AR (Days Increase)


lost)Incremental

Staff ($)AR (Days Increase)


lost)Incremental

Staff ($)

Staffing Impact (incremental) 95,545$ 47,773$ 23,886$

Medical Necessity / Denials 5.2 585,715$ 2.6 292,857$ 1.3 146,429$

Coding 3.2 1.6 1.6

Staffing Impact (incremental) 121,415$ 60,708$ 30,354$

Staffing Prep 60,000$ (creating/testing billing edits)

Billing Rejections / Denials 10.4 1,171,429$ 5.2 585,715$ 2.6 292,857$

Patient Access

Patient Financial Services

Health Information Mgt.

TOTALS 18.9 5.5 439,286$ 54,240$ 1,757,144$ 276,961$ 9.4 878,572$ 108,480$

FY2016Revenue Cycle Metrics Revenue Cycle Metrics Revenue Cycle Metrics

FY2014 FY2015

Notes: See Key Assumptions for information on assumptions underlying these estimates. Figures may not add to Totals due to rounding.



Expected Denial Reasons

Minich-Pourshadi, Karen. “ICD-10 Puts Revenue at Risk.” HealthLeaders Media Intelligence (July 2011), p. 22.



Risk Mitigation Strategies

ICD-10

Strategy

Assessment

Evaluation

CommunicationBudget

Training

Testing



StrategyConvene Implementation Taskforce

Multi-disciplinary• Clinical, IT, HIM,

Finance, Compliance, Communications, Payer/Managed Care Contracting, Operations

Key stake holders • Identify who is

impacted and what needs to be done

• Establish timeline and designate leaders

Designate physician champion



AssessmentOrganizational readiness

• Map a patient’s encounter and look at every piece in the organization touched by ICD-9

• Affected Areas

Financial/HIM/IT• Billing systems, DRG grouper,

Chargemaster, claims software, medical record abstracting, encoding software, case mix systems

Clinical• Patient care Protocols, Medical

Necessity, laboratory and pharmacy systems, utilization, quality and case management

Patients• Patient registration and scheduling

systems, advance beneficiary notice, preauthorization



Evaluation

Vendors• Identify vendors affected by ICD-10 (billing companies,

medical transcription, home health, DME – start with your Business Associate Agreements)

− What system changes/upgrades are needed?

− What costs are involved? Are they included in existing vendor agreements?

− What customer support (implementation, testing, training) will the vendor be offering?



EvaluationPayers• Evaluate payer readiness – are they

implementing new rules for claims submission or re-submission?

• Add language to current contracts to require ICD-10 compliance

• Share your plans for ICD-10 changes with them

• Medicare Administrative Contractor - Identify shared goals and objectives to ensure a combined approach, minimizing disruption to either’s coding processes (win-win)

• Contact your state’s Medicaid program – are they on track?



ICD-10 Impact on DRG Assignment

• CMS did not address the impact of ICD-10 on DRG assignment in the ICD-10 Final Rule

• However, CMS and 3M have used the GEMs to convert the MS-DRG definitions from ICD-9-CM to ICD-10

• CMS and 3M found that the GEMs were 95% to >99% effective in converting the MS-DRGs to ICD-10



Communication

Engage public relations team

Develop communication plan

• Hospital/physician community

• Educate patients about potential claim denial or delayed claim processing due to new codes

• Ongoing status of organization’s ICD-10 migration

Communicate early and often

• Talking points should be clear & concise

• ICD-10 – what it is and what it isn’t

• Focus on the positive - minimize fear

• Consider social media, blogs, “tweets”



Budget

• Cost of training/decreased staff productivity

• Cost of hardware/software upgrades

• Forms redesign

• Testing costs/Consulting services

• Vendor readiness – external testing

• Temporary maintenance of dual systems

• Cash reserves for denials increase,

payment delays, decreased productivity

Determine financial impact, budget, resources, cash reserve needed for ICD-10 migration



TrainingHealth Information Management• ICD-10 requires increased knowledge of anatomy and physiology

• Assess training needs and develop a plan– Professional coding staff – ICD-10-CM

– Hospital coding staff – ICD-10-CM and ICD-10-PCS

– Determine who will train staff and how this will be accomplished

– Factor in time away from work, consider post-testing and ongoing support

– Make ICD-10 proficiency part of your coding staff’s performance goals



TrainingClinicians

• Physicians – focus on codes germane to their practice

• Review clinical documentation improvement efforts and develop new strategies

• Incorporate documentation improvement as component to compliance training

• Ancillary staff – identify needs and level of training needed, nursing, financial services, quality, utilization, ancillary departments…

Information Technology

• Training to ensure that codes are accurately cross-walked in organization’s IT systems



Expected Denial Reasons

Minich-Pourshadi, Karen. “ICD-10 Puts Revenue at Risk.” HealthLeaders Media Intelligence (July 2011), p. 22.



Tiered Training Structure



Sample Training Blueprint

Tier

Individuals to

Train

2013 Training Hours

2013 Training

Costs

2014 Training Hours

2014 Training

Costs

Combined 2013 & 2014

Training Costs 1 356 356 17,800.00$ 356 17,800.00$ 35,600.00$ 2 251 256 12,800.00$ 491 24,550.00$ 37,350.00$ 3 8 270 13,500.00$ 90 4,500.00$ 18,000.00$ MD 7 14 700.00$ 42 2,100.00$ 2,800.00$

Grand Total 622 896 44,800.00$ 979 48,950.00$ 93,750.00$



Testing Specifics

Documentation

• Conduct gap analysis of coding and documentation

• Identify ongoing areas of weakness and provide ongoing education

• Consider different approaches to facilitate physician documentation

• Embedded documentation improvement specialist?



• Plan for dual ICD-9 and 10 codes for a brief period to address services rendered before October 1, but discharged after October 1

• Monitor physician documentation to ensure ICD-10 compliance

• Monitor impact on claim-processing activity, claim denials, and rejections

• Audit coder productivity and accuracy

• Monitor patient satisfaction

• Post Transition Review

– What’s working?

– What needs fixing?

ICD-10 Go Live, The Day After…



“The Must Do’s”

Create an ICD-10 impact awareness throughout the organization

Ensure your foundational IS structure is actively preparing for the transition

Define your change approach to ensure you have defined the proper structure and sponsorship

Develop projections of operational needs, including staffing and internal educational training

Identify specific documentation gaps to determine focused educational needs

Calculate potential impact on financial results



ICD-10 is not just a coder’s issue!This transformation entails foundational changes to ALL

HIPAA-covered entities and providers

• In a nutshell, here are some key points to keep in mind going forward:

Senior management’s involvement is critical to successful implementation!• Risks of late or no implementation must be

understood

Problems should be expected!• Develop action plans to manage them• Have a back-up plan

Establish a budget. Develop a timeline and follow it!



The future?

WHO is currently working on ICD-11

• They will build upon ICD-10

• The first draft was made available online in July 2011 for review

• The final draft is expected to be submitted to WHO's World Health Assembly for official endorsement by 2015



Key Resources

• ICD-10 Proposed and Final Rules– http://edocket.access.gpo.gov/2008/pdf/E8-19298.pdf

– http://edocket.access.gpo.gov/2009/pdf/E9-743.pdf

• CMS Website on ICD-10– https://www.cms.gov/ICD10/

• CDC Website on Classification of Diseases– http://www.cdc.gov/nchs/icd.htm

• CMS ICD-10-CM Quick Reference Guide– https://www.cms.gov/ICD10/11b14_2012_ICD10CM_and_GEMs.a

sp#TopOfPage

http://edocket.access.gpo.gov/2008/pdf/E8-19298.pdf

http://edocket.access.gpo.gov/2009/pdf/E9-743.pdf

https://www.cms.gov/ICD10/

http://www.cdc.gov/nchs/icd.htm

https://www.cms.gov/ICD10/11b14_2012_ICD10CM_and_GEMs.asp

https://www.cms.gov/ICD10/11b14_2012_ICD10CM_and_GEMs.asp



Questions?



Contact Information

Denise Hall, RN, BSN

Principal

Pershing Yoakley & Associates, P.C.

678-441-0645

[email protected]

www.pyapc.com

Julie Chicoine, Esq., RN, CPC, CPCO

Wexner Medical Center at

The Ohio State University

614-293-2007

[email protected]

www.medicalcenter.osu.edu

Thank you for allowing us to share our thoughts and expertise with you.