April 2013—On October 1, 2014, all healthcare providers must begin using the ICD-10 diagnosis codes. The transition to ICD-10 was mandated by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and will replace the use of ICD-9, which was originally adopted in the 1970s and no longer accurately represents many of the diagnoses and treatments used by the modern healthcare system. Adoption of ICD-10 will have a major impact on the healthcare industry as all HIPAA covered entities are required to adopt ICD-10. While proponents of the law argue that the new codes will improve the quality of information available for quality improvements, payment purposes, and medical research, the transition will be and has already proven difficult as evidenced by CMS’s multiple decisions to delay the final implementation date, first from 2011 to 2012, and finally this past August extending the date to October 2014. In anticipation of that transition, the CMS recently released a number of tools to assist providers in adopting the new coding system and is encouraging providers to begin planning for and implementing the new codes now to lessen the potential impact the change will have, such as delays in billing and payment.
Background on ICD-10
By way of quick background, the 10th edition of the International Classification of Diseases (“ICD-10”) was originally endorsed by the World Health Organization (“WHO”) in the 1990s and has already been adopted by most developed countries around the world. The United States will be one of the last developed countries to adopt the codes. The NationalCenter for Health Statistics (“NCHS”) at the U.S. Centers for Disease Control and Prevention (“CDC”) is the primary agency charged with leading the implementation of ICD-10 and to that end has developed modifications for use by US healthcare providers. These modifications include both Clinical Modifications (“ICD-10-CM”), which will be used by all providers, and a Procedural Coding System (“PCS”), which will be used to document inpatient care. The transition to ICD-10 will not directly impact the use of Current Procedural Terminology (“CPT”) and Healthcare Common Procedure Coding System (“HCPCS”) codes used to bill for outpatient procedures.
One of the most significant changes for providers in adopting the new system will be the sheer number of codes compared to ICD-9. For example, ICD-10-CM will include approximately 68,000 codes compared to ICD-9’s 4,000 diagnosis codes, and ICD-10-PCS will include 87,000 codes, up from 13,000 in ICD-9. The larger number of codes will allow for more specificity when coding diagnoses and procedures, possibly lowering the rate of denials (or increase them if a provider is not prepared) by payers and improving the data available for research purposes. Another significant difference between the two coding systems is the structure and format of the codes themselves. Whereas ICD-9 was a 3-5 digit numeric code, ICD-10 is a 3-7 digit alphanumeric code.
Potential Issues with Implementing ICD-10
The number of codes available and the structure of the new codes will present challenges during ICD-10’s adoption, with providers working towards adoption needing to consider issues such as updating technology, educating and training staff on the new codes, updating health plan contracts to accommodate the new codes, and ensuring documentation accurately describes diagnoses and treatments for accurate billing. Dealing with these issues may come at a significant cost to imaging providers and suppliers in both time and money. Furthermore, once adoption of ICD-10 has occurred in October of 2014, imaging providers will likely face additional issues, including delays in payment if payers are not ready to handle the change, or denials for procedures currently covered due to the change in the level of information payers will have as a result of the code’s specificity. Because providers may also be required to change documentation to support the level of specificity, it is imperative that current compliance programs incorporate these issues and ensure that the appropriate personnel are properly trained in order to ensure accurate reporting of diagnoses and treatment and submission of claims.
CMS ICD-10 Implementation Tools
CMS recently released a number of tools that are designed to assist providers in planning and implementing ICD-10 and mitigate some of the potential problems the transition will pose. These tools are broken down by provider type, such as small and medium practices, large practices, small hospitals, and payers, and include timelines, checklists, and implementation guides.
Imaging providers and suppliers are well advised to pay particular attention to the timelines and checklists that CMS has developed as they provide guidance with respect to the amount of time it is expected providers will need to be ready for the transition in October 2014. The guidance also provides a basic outline of what providers should expect and where they should currently be in the implementation process. For example, the timelines and checklists anticipate providers will need significant time to work with vendors (ie, vendors for electronic health record systems) to ensure that systems (eg, billing systems, electronic health records) are compatible with the new codes. Likewise, training is anticipated to take significant time due to the complexity of the new codes and the differences between ICD-9 and ICD-10.
CMS has also updated its Implementation guides for providers. These booklets incorporate the timelines and checklists and also provide detailed information on the steps providers should consider when planning and implementing ICD-10. For example, tables are provided that examine the various risks healthcare providers may face and set forth mitigating strategies to avoid those risks. The guides also assist providers through various steps they’ll need to take, such as contacting vendors, billing entities, and clearinghouses to gather information on those entities implementation plans, as well as reaching out to payers to determine how to work with those entities to ensure all parties are ready for the transition.
Although the transition to ICD-10 is a year and a half away, CMS has made it clear that providers must begin to plan for the transition now in order to ensure compliance with ICD-10 and avoid delays in payments or other issues once the transition to ICD-10 is mandatory on October 1, 2014. While CMS has previously extended the deadline, imaging providers and suppliers should not count on the agency moving the date again. At a minimum, imaging providers and suppliers should review the CMS resources in order to understand what must be done in order to have a compliant transition in October of 2014. In addition, imaging providers and suppliers that have not yet started planning should consider designating a transition lead or transition team to work through the many issues the transition will pose to any practice. Finally, providers should consider beginning to test their own internal readiness for the transition as CMS has encouraged.
Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.
Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.
The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.