Starting Oct. 1, number of descriptive medical codes jumps from 14,000 to
68,000
While much of the media's focus of late has been on electronic medical records (EMRs), what is proving to be a more daunting task is a new medical coding system affecting healthcare provider and insurance backend systems.
ICD-10, which represents the 10th edition of the International Classification of Diseases (ICD), will be used for classifying diagnoses and medical procedures.
The codes will dictate how the more than $2.8 trillion that Americans spend each year on medical care is paid out.
The new coding system is so complex that the mandate requiring it has been delayed twice. Its current deadline is Oct. 1, and there are industry rumblings that it may be delayed again.
The IT challenge for hospitals, physician groups and insurance companies lies with a new medical classification system that increases the number of descriptive codes from 14,000 in ICD-9 to 68,000 in ICD-10. It also changes a purely numeric system to an alphanumeric one.
Simply put, ICD-9 ran out of codes to describe all the new injury and disease descriptions and treatments that have ballooned over the past 37 years since it was put into use.
"Anything that's going to be generating documentation in the billing cycle will need to be updated because it will need to be coded for ICD-10," said Charles Christian, CIO of St. Francis Hospital in Columbus, Georgia.
Not only will the number of database fields need to be quintupled to handle the number of codes, but the field lengths will need to be expanded to accommodate the longer ones. The greatest challenge, however, is ensuring medical billing systems and insurance claims systems speak the same language.
ICD-10 graphic
American Health Information Management Association
A survey of 545 healthcare managers commissioned last year by the American Health Information Management Association and two other entities revealed some processes and workflows would be more difficult after ICD-10 is rolled out.
"We need to ensure this will work from soup to nuts," said Christian, whose IT staff began preparing for the ICD-10 changeover about four years ago.
Hospitals have many systems that must be upgraded. There are separate inpatient and outpatient billing systems and ancillary billing systems used by individual departments, from radiology and labs to pharmacies. EMRs must be ICD-10 compliant as well.
"On our physician practice side, we're running five different EMRs in offices... and they all have their nuances in how the codes are handled," Christian said. "So there's a significant load put on those organizations to insure everything is going to work the day we flip the switch."
Hit by a turtle? Yeah, there's a code for that
The new ICD-10 code set describes in remarkable detail practically anything that could cause someone to seek treatment and the medical procedure used to treat it.
For example, when ICD-9 was rolled out in 1978, there was no such procedure as arthroscopy, where an endoscope is used to perform minimally invasive surgery on a joint. ICD-10 codes also add whether a procedure is an initial one or a subsequent treatment.
If a physician is treating a broken ankle, the code needs to be selected for which leg the ankles is on, whether it's on the lateral or medial side of the ankle and if the injury is an open or closed fracture.
The detail with which ICD-10's codes describe medical conditions can at times wander into the bizarre. For example, if you were stabbed while crocheting, your doctor would use the code Y93D1. Sucked into a jet engine? That's a V97.33XD.
Burned when your water skis caught fire? Then your physician would use V9107XA. And, if you were unlucky enough to have been struck by a turtle, that's a W59.22XD. There's even a code for having been attacked by a squirrel.
"It is the largest and most challenging mandate we'd ever seen," said Ryan McDermitt, vice president of software products at Edifecs, a tier-one vendor of B2B data trading networks. "There'll be a real crush in the healthcare industry in the second half of the year."
Along with hospitals and physician practices, large insurers, such as WellPoint and United, each have spent more than $100 million in systems upgrades since ICD-10 began, McDermitt said.
Along with insurers, the ICD-10 codes are used on claims submitted to Medicare and Medicaid. Claims are also submitted by healthcare providers to enormous clearing houses, such as McKesson's Relay Health, which checks them to ensure there are no mistakes before they head off to the payer. So, they too must be prepared.
ICD-10's medical classification list was created by the World Health Organization (WHO) and it's used by developed countries around the world.
So why haven't U.S. hospitals and physician practices already flipped the switch on ICD-10? Because unlike other developed counties, ICD-10 in the U.S. will not only be used to classify health problems and treatments, it will also be used for payments.
That means medical facilities need to test their systems with payers - insurance companies such as United Health, WellPoint, Aetna and Blue Cross, as well as smaller, regional payers.
There are about 186,000 medical coders in the U.S. who work in hospital administrative offices and transcribe doctors' notes into ICD codes. Those codes are used by insurance companies to determine how much to pay hospitals and doctors in physicians' practices for the treatment they've provided. Miss a code or type an incorrect code, and the hospital or private physician could lose money.
Testing to ensure ICD-10 rollouts happen without disrupting patient treatment and payments to healthcare providers, therefore, has been rigorous. Healthcare providers have been testing and retesting because they understand what's at stake.
"Not only do IT organizations have to be organized internally with a project team and manager, but they also have to get folks from other parts of the business -- from finance and operations involved," said Denny Brennan, executive director of the Massachusetts Health Data Consortium (MHDC). "It's not just a technical exercise."
The MHDC is the nation's oldest health data sharing organization. The consortium coordinates medical data sharing for 80% or 86 of Massachusetts' acute care providers, the state's Medicaid plan, known as MassHealth, and all in-state insurers. It has also spearheaded ICD-10 testing for hospitals in the commonwealth.
Brennan said testing of 95 Massachusetts payers or providers revealed that the claims systems at physician practices were not robust enough compared with hospitals.
"Different systems were used and that created problems. Other organizations had billing systems that weren't HIPAA compliant or providing accurate codes," Brennan said. "I'd say one big area, which I'd call data source systems, really got pressure-tested and in some cases they broke and had to be modified or enhanced."
Even though MHDC began ICD-10 testing using common methodologies early in 2013, Brennan said only about 10% of providers and payers have completed their testing to date.
Robert Wah, president of the American Medical Association, said initial testing on ICD-10 systems has shown the potential for "a serious back-log in millions of health care transactions and significant financial disruptions for physicians that could threaten patients' access to care."
The AMA has called for delays in ICD-10's implementation to ensure healthcare providers are ready for the changeover.
"Burdens on physician practices need to be reduced - not created - as we work to get the best value possible for the health care dollar and the nation undertakes significant payment and delivery reforms," Wah said in an email reply to Computerworld.
The AMA is not alone. Brennan said there are many healthcare-industry lobbying groups who see ICD-10 as an unfunded mandate.
The delays, Brennan said, were "a blessing for healthcare providers and healthcare plans in Massachusetts who needed more time to upgrade their claims management systems."
Not everyone agrees. St. Francis Hospital's Christian said the delays have meant he's had to keep IT teams in place that he'd prefer to move on to other technology projects.
"Every time we delay it, we create anxiety. We have IT folks who've been in constant process mode ensuring this is ready to go for years," said Christian, who is also chairman of the College of Healthcare Information Management Executives (CHIME).
"I think we need to pull the Band Aid off and get it over with," Christian added.
Delaying ICD-10's rollout has been costly. The CMS estimated the added costs to healthcare and insurance providers range from 10% to 30% or $1.2 billion to $6.8 billion overall.
"We believe it is important to require implementation of ICD-10 as soon as the law permits because it will allow the industry to begin reaping the benefits of ICD-10 as soon as possible," CMS stated in a report released in August 2014.
The American Health Information Management Association (AHIMA) is also urging Congress to stick to the current deadline.
"The industry has already seen two delays in implementation, and each delay has cost the industry billions of dollars, as well as the untold costs of lost benefits from implementing a more effective code set has shown that the estimated costs, time, and resources required by physician offices to convert to ICD-10 are lower than initially estimated," AHIMA stated in a press release.
ICD-10 graphic American Health Information Management Association
A survey of 454 healthcare decision makers last year revealed the systems they're most concerned ICD-10 will affect.
The first round of Medicare end-to-end testing for ICD-10 coding will take place the week of Jan. 26. Last March, in a pilot test conducted by the CMS, 2,600 participating providers, suppliers, billing companies and clearinghouses (about 5% of all claim submitters in the U.S.) submitted 127,000 claims. The CMS said 89% of the test claims using the new ICD-10 coding were accepted.
ICD-10 benefits
ICD-10's granularity, according to the Centers for Medicare & Medicaid Services (CMS), will improve data capture and analytics of public health surveillance and reporting, national quality reporting, research and data analysis, and provide detailed data to inform health care delivery and health policy decisions.
The new standard also will improve quality measurement and reporting capabilities, tracking of illnesses and will reflect greater accuracy of reimbursement for medical services.
What Readers Like
"ICD-10 codes can be used for data mining to determine how we're doing on specific disease processes," Christian said. "If we get good clear documentation and it's coded with specific data, we can extract that and use analytics on it. You can't use free text data a lot because you can't really understand what the inferences are based on how something's said."
A report released last year by health care consulting firm Nachimson Advisors for the AMA estimated the cost of implementing ICD-10 would range from as little as $56,639 for a small physician practice to as much as $8 million for a large practice.
The AHIMA, however, recently offered a far lower estimate than Nachimson Advisors'. AHIMA said ICD-10 implementation for a small physician practice (three physicians or fewer) should cost from $1,960 to $5,900.
While the rollout of EMRs has been gradual, taking place over three phases (including its own set of delays) and many years, ICD-10 will simply turn on like a light switch. That means, on Sept. 30, providers and payers will be using ICD-9, and on the next day, they'll be using ICD-10.
"That's the thing that makes ICD-10 so terrifying - the one-day cutover," McDermitt said.
At the same time, medical billing filed prior to Oct. 1, will need to continue to be processed with ICD-9 systems after that time.
Between now and Oct. 1, hospital billing systems must be recoded and payer systems must be upgraded to recognize the new ICD-10-compliant claims as readable electronic data interchanges (EDI). Failure of systems to read the claims means hospital billing systems won't receive claim acknowledgements.
It's a complex exchange of data between providers and payers, and ICD-10's medical terminology and coding is completely different from ICD-9.
"It's completely independent of ICD-9. It's like going between two languages, like Spanish and Italian that both share a native root language - Latin - but ICD-10 has a different clinical interpretation of clinical concepts," McDermitt said.
Because ICD-10 is independent from its predecessor, old claim adjudication systems, many based on Cobol, have to be mapped to the new database systems so that data isn't lost in the changeover.
For example, health insurance giant Humana created more than 15,000 maps to run in production so all of its businesses can run in ICD-9 and ICD-10 in parallel for dual processing during the changeover, according to McDermitt.
The risk of not property rolling out ICD-10 is huge and involves the potential loss of billions of dollars.
For example, if a healthcare provider fails to include a medical procedure received by a patient, the provider risks losing revenue, and if a provider's claims system doesn't interface properly with a payer's, it will delay accounts receivables.
So not only do medical backoffices have to recode systems, but finance and operations must as well, Brennan said.
A survey of 454 healthcare employees conducted last year revealed that most are concerned about how IDC-10 will affect accounting and billing (42%), electronic health records (37%), analytics (35%) and the exchange of health information with other facilities (31%).
Of the 454 responses, 32% were from those with management and supervisory roles, 24% were directors and 16% were executives, while clinicians and other titles made up the remaining percentage.
The survey was conducted last June by the American Health Information Management Association, the eHealth Initiative and Edifecs.
Brennan said ICD-10 testing doesn't need to be arduous. Testing with a massive number of real claims is less important than testing with a small number of high impact test claims using rapid cycle times.
"Probably the most valuable lesson we learned, and a real value for all the [test participants], was understanding what they didn't need to do," Brennan said. "If anything, the participants in our program are going into this year with a much more focused and hardened infrastructure for doing what ICD testing remains before October."
While much of the media's focus of late has been on electronic medical records (EMRs), what is proving to be a more daunting task is a new medical coding system affecting healthcare provider and insurance backend systems.
ICD-10, which represents the 10th edition of the International Classification of Diseases (ICD), will be used for classifying diagnoses and medical procedures.
The codes will dictate how the more than $2.8 trillion that Americans spend each year on medical care is paid out.
The new coding system is so complex that the mandate requiring it has been delayed twice. Its current deadline is Oct. 1, and there are industry rumblings that it may be delayed again.
The IT challenge for hospitals, physician groups and insurance companies lies with a new medical classification system that increases the number of descriptive codes from 14,000 in ICD-9 to 68,000 in ICD-10. It also changes a purely numeric system to an alphanumeric one.
Simply put, ICD-9 ran out of codes to describe all the new injury and disease descriptions and treatments that have ballooned over the past 37 years since it was put into use.
"Anything that's going to be generating documentation in the billing cycle will need to be updated because it will need to be coded for ICD-10," said Charles Christian, CIO of St. Francis Hospital in Columbus, Georgia.
Not only will the number of database fields need to be quintupled to handle the number of codes, but the field lengths will need to be expanded to accommodate the longer ones. The greatest challenge, however, is ensuring medical billing systems and insurance claims systems speak the same language.
ICD-10 graphic
American Health Information Management Association
A survey of 545 healthcare managers commissioned last year by the American Health Information Management Association and two other entities revealed some processes and workflows would be more difficult after ICD-10 is rolled out.
"We need to ensure this will work from soup to nuts," said Christian, whose IT staff began preparing for the ICD-10 changeover about four years ago.
Hospitals have many systems that must be upgraded. There are separate inpatient and outpatient billing systems and ancillary billing systems used by individual departments, from radiology and labs to pharmacies. EMRs must be ICD-10 compliant as well.
"On our physician practice side, we're running five different EMRs in offices... and they all have their nuances in how the codes are handled," Christian said. "So there's a significant load put on those organizations to insure everything is going to work the day we flip the switch."
Hit by a turtle? Yeah, there's a code for that
The new ICD-10 code set describes in remarkable detail practically anything that could cause someone to seek treatment and the medical procedure used to treat it.
For example, when ICD-9 was rolled out in 1978, there was no such procedure as arthroscopy, where an endoscope is used to perform minimally invasive surgery on a joint. ICD-10 codes also add whether a procedure is an initial one or a subsequent treatment.
If a physician is treating a broken ankle, the code needs to be selected for which leg the ankles is on, whether it's on the lateral or medial side of the ankle and if the injury is an open or closed fracture.
The detail with which ICD-10's codes describe medical conditions can at times wander into the bizarre. For example, if you were stabbed while crocheting, your doctor would use the code Y93D1. Sucked into a jet engine? That's a V97.33XD.
Burned when your water skis caught fire? Then your physician would use V9107XA. And, if you were unlucky enough to have been struck by a turtle, that's a W59.22XD. There's even a code for having been attacked by a squirrel.
"It is the largest and most challenging mandate we'd ever seen," said Ryan McDermitt, vice president of software products at Edifecs, a tier-one vendor of B2B data trading networks. "There'll be a real crush in the healthcare industry in the second half of the year."
Along with hospitals and physician practices, large insurers, such as WellPoint and United, each have spent more than $100 million in systems upgrades since ICD-10 began, McDermitt said.
Along with insurers, the ICD-10 codes are used on claims submitted to Medicare and Medicaid. Claims are also submitted by healthcare providers to enormous clearing houses, such as McKesson's Relay Health, which checks them to ensure there are no mistakes before they head off to the payer. So, they too must be prepared.
ICD-10's medical classification list was created by the World Health Organization (WHO) and it's used by developed countries around the world.
So why haven't U.S. hospitals and physician practices already flipped the switch on ICD-10? Because unlike other developed counties, ICD-10 in the U.S. will not only be used to classify health problems and treatments, it will also be used for payments.
That means medical facilities need to test their systems with payers - insurance companies such as United Health, WellPoint, Aetna and Blue Cross, as well as smaller, regional payers.
There are about 186,000 medical coders in the U.S. who work in hospital administrative offices and transcribe doctors' notes into ICD codes. Those codes are used by insurance companies to determine how much to pay hospitals and doctors in physicians' practices for the treatment they've provided. Miss a code or type an incorrect code, and the hospital or private physician could lose money.
Testing to ensure ICD-10 rollouts happen without disrupting patient treatment and payments to healthcare providers, therefore, has been rigorous. Healthcare providers have been testing and retesting because they understand what's at stake.
"Not only do IT organizations have to be organized internally with a project team and manager, but they also have to get folks from other parts of the business -- from finance and operations involved," said Denny Brennan, executive director of the Massachusetts Health Data Consortium (MHDC). "It's not just a technical exercise."
The MHDC is the nation's oldest health data sharing organization. The consortium coordinates medical data sharing for 80% or 86 of Massachusetts' acute care providers, the state's Medicaid plan, known as MassHealth, and all in-state insurers. It has also spearheaded ICD-10 testing for hospitals in the commonwealth.
Brennan said testing of 95 Massachusetts payers or providers revealed that the claims systems at physician practices were not robust enough compared with hospitals.
"Different systems were used and that created problems. Other organizations had billing systems that weren't HIPAA compliant or providing accurate codes," Brennan said. "I'd say one big area, which I'd call data source systems, really got pressure-tested and in some cases they broke and had to be modified or enhanced."
Even though MHDC began ICD-10 testing using common methodologies early in 2013, Brennan said only about 10% of providers and payers have completed their testing to date.
Robert Wah, president of the American Medical Association, said initial testing on ICD-10 systems has shown the potential for "a serious back-log in millions of health care transactions and significant financial disruptions for physicians that could threaten patients' access to care."
The AMA has called for delays in ICD-10's implementation to ensure healthcare providers are ready for the changeover.
"Burdens on physician practices need to be reduced - not created - as we work to get the best value possible for the health care dollar and the nation undertakes significant payment and delivery reforms," Wah said in an email reply to Computerworld.
The AMA is not alone. Brennan said there are many healthcare-industry lobbying groups who see ICD-10 as an unfunded mandate.
The delays, Brennan said, were "a blessing for healthcare providers and healthcare plans in Massachusetts who needed more time to upgrade their claims management systems."
Not everyone agrees. St. Francis Hospital's Christian said the delays have meant he's had to keep IT teams in place that he'd prefer to move on to other technology projects.
"Every time we delay it, we create anxiety. We have IT folks who've been in constant process mode ensuring this is ready to go for years," said Christian, who is also chairman of the College of Healthcare Information Management Executives (CHIME).
"I think we need to pull the Band Aid off and get it over with," Christian added.
Delaying ICD-10's rollout has been costly. The CMS estimated the added costs to healthcare and insurance providers range from 10% to 30% or $1.2 billion to $6.8 billion overall.
"We believe it is important to require implementation of ICD-10 as soon as the law permits because it will allow the industry to begin reaping the benefits of ICD-10 as soon as possible," CMS stated in a report released in August 2014.
The American Health Information Management Association (AHIMA) is also urging Congress to stick to the current deadline.
"The industry has already seen two delays in implementation, and each delay has cost the industry billions of dollars, as well as the untold costs of lost benefits from implementing a more effective code set has shown that the estimated costs, time, and resources required by physician offices to convert to ICD-10 are lower than initially estimated," AHIMA stated in a press release.
ICD-10 graphic American Health Information Management Association
A survey of 454 healthcare decision makers last year revealed the systems they're most concerned ICD-10 will affect.
The first round of Medicare end-to-end testing for ICD-10 coding will take place the week of Jan. 26. Last March, in a pilot test conducted by the CMS, 2,600 participating providers, suppliers, billing companies and clearinghouses (about 5% of all claim submitters in the U.S.) submitted 127,000 claims. The CMS said 89% of the test claims using the new ICD-10 coding were accepted.
ICD-10 benefits
ICD-10's granularity, according to the Centers for Medicare & Medicaid Services (CMS), will improve data capture and analytics of public health surveillance and reporting, national quality reporting, research and data analysis, and provide detailed data to inform health care delivery and health policy decisions.
The new standard also will improve quality measurement and reporting capabilities, tracking of illnesses and will reflect greater accuracy of reimbursement for medical services.
What Readers Like
"ICD-10 codes can be used for data mining to determine how we're doing on specific disease processes," Christian said. "If we get good clear documentation and it's coded with specific data, we can extract that and use analytics on it. You can't use free text data a lot because you can't really understand what the inferences are based on how something's said."
A report released last year by health care consulting firm Nachimson Advisors for the AMA estimated the cost of implementing ICD-10 would range from as little as $56,639 for a small physician practice to as much as $8 million for a large practice.
The AHIMA, however, recently offered a far lower estimate than Nachimson Advisors'. AHIMA said ICD-10 implementation for a small physician practice (three physicians or fewer) should cost from $1,960 to $5,900.
While the rollout of EMRs has been gradual, taking place over three phases (including its own set of delays) and many years, ICD-10 will simply turn on like a light switch. That means, on Sept. 30, providers and payers will be using ICD-9, and on the next day, they'll be using ICD-10.
"That's the thing that makes ICD-10 so terrifying - the one-day cutover," McDermitt said.
At the same time, medical billing filed prior to Oct. 1, will need to continue to be processed with ICD-9 systems after that time.
Between now and Oct. 1, hospital billing systems must be recoded and payer systems must be upgraded to recognize the new ICD-10-compliant claims as readable electronic data interchanges (EDI). Failure of systems to read the claims means hospital billing systems won't receive claim acknowledgements.
It's a complex exchange of data between providers and payers, and ICD-10's medical terminology and coding is completely different from ICD-9.
"It's completely independent of ICD-9. It's like going between two languages, like Spanish and Italian that both share a native root language - Latin - but ICD-10 has a different clinical interpretation of clinical concepts," McDermitt said.
Because ICD-10 is independent from its predecessor, old claim adjudication systems, many based on Cobol, have to be mapped to the new database systems so that data isn't lost in the changeover.
For example, health insurance giant Humana created more than 15,000 maps to run in production so all of its businesses can run in ICD-9 and ICD-10 in parallel for dual processing during the changeover, according to McDermitt.
The risk of not property rolling out ICD-10 is huge and involves the potential loss of billions of dollars.
For example, if a healthcare provider fails to include a medical procedure received by a patient, the provider risks losing revenue, and if a provider's claims system doesn't interface properly with a payer's, it will delay accounts receivables.
So not only do medical backoffices have to recode systems, but finance and operations must as well, Brennan said.
A survey of 454 healthcare employees conducted last year revealed that most are concerned about how IDC-10 will affect accounting and billing (42%), electronic health records (37%), analytics (35%) and the exchange of health information with other facilities (31%).
Of the 454 responses, 32% were from those with management and supervisory roles, 24% were directors and 16% were executives, while clinicians and other titles made up the remaining percentage.
The survey was conducted last June by the American Health Information Management Association, the eHealth Initiative and Edifecs.
Brennan said ICD-10 testing doesn't need to be arduous. Testing with a massive number of real claims is less important than testing with a small number of high impact test claims using rapid cycle times.
"Probably the most valuable lesson we learned, and a real value for all the [test participants], was understanding what they didn't need to do," Brennan said. "If anything, the participants in our program are going into this year with a much more focused and hardened infrastructure for doing what ICD testing remains before October."
