Medical Billing and Coding Healthcare Blog

It's a little more than a month until the October 1 deadline for the implementation of ICD-10. While the transition to ICD-10 requires a great deal of work — and carries with it substantial risks, as we previously discussed — there are also a number of benefits of switching from ICD-9 to ICD-10.

As Sue Bowman, director of coding policy and compliance at AHIMA, writes, "... no matter the trouble, the transition is necessary, because the current coding system can't take healthcare into the future. Today's data needs are dramatically different than they were 30 years ago when ICD-9 was introduced."

Here are five of the top ICD-10 benefits.

1. Improved data quality. The granularity of ICD-10-CM and ICD-10-PCS is vastly improved over ICD-9-CM and will enable greater specificity in identifying health conditions. They also provide better data for measuring and tracking healthcare utilization and the quality of patient care. Some of the reasons are as follows:

  • The greater level of detail in the new code sets includes laterality, severity and complexity of disease conditions, which will enable more precise identification and tracking of specific illnesses and severity over time.
  • Terminology and disease classification are now consistent with new technology and current clinical practice.
  • Injuries, poisonings and external causes are much more detailed in ICD-10-CM, including the severity of injuries, and how and where injuries happened. Extensions are also used to provide additional information for many injury codes.
  • Postoperative codes are expanded and now distinguish between intraoperative and post-procedural complications.
  • There are new concepts that did not exist in ICD-9-CM, such as under-dosing, blood type, the Glasgow Coma Scale and alcohol level.

With better quality data, providers will be able to make better clinical decisions; segment patients more effectively to improve care for higher acuity patients; design more specific protocols and clinical pathways for various health conditions; improve public health reporting and help track and evaluate the risk of adverse public health events; and drive greater opportunity for research, clinical trials and epidemiological studies.

2. Positive impact on bottom line (eventually). While the transition to ICD-10 will require an initial investment — perhaps a substantial one for some organizations — it has the potential to positively impact a provider's bottom line.

According to Pam Jodock, HIMSS senior director of health business solutions, in a report, "There should be fewer claims pended for requests for medical records because the ICD-10 code will provide the information not included in ICD-9 codes today. Hopefully over the course of time, we’ll see a streamlining of claims payment and providers will see a reduction in the number of claims that get pended or rejected at first pass."

She continues, "Providers can only control a small portion of outcome with their patients. There are other things — comorbidities, lifestyle choices and adherence to medication protocol — that will impact outcome. The more of that type of information that providers are able to capture, the better able they’ll be able to account for those factors when negotiating appropriate reimbursement levels."

Other financial benefits include providing objective data for peer comparison and utilization benchmarking, and the use of ICD-10 may reduce audit risk exposure by encouraging the use of diagnosis codes with a greater degree of specificity as supported by the clinical documentation

3. Organization-wide improvements. Once an organization is comfortable with using ICD-10, there should be opportunities to bring about changes that will positively impact the entire organization. Through enhancing the definition of patient conditions, ICD-10 will provide improved matching of professional resources and care teams and increasing communications between providers. It should afford more targeted capital investments to meet an organization's needs through better specificity of patient conditions.

Finally, ICD-10 should support a transition to risk-sharing models through the use of more precise data for patients and populations.

4. Increased professional insights. ICD-10's increased specificity should provide greater insight into a number of areas. It is expected to indirectly lead to more accurate and less fraudulent coding, and the Centers for Medicare & Medicaid Services has stated ICD-10 should aid in the prevention and detection of healthcare fraud and abuse.

ICD-10 is also expected to provides clear objective data for credentialing and privileges; improves specificity of measures for quality and efficiency reporting; and provide more specific data to support physician advocacy of health and public health policy.

5. Easier comparison of mortality and morbidity data. The U.S. currently the only industrialized nation still utilizing ICD-9-CM codes for morbidity data (though we have already transitioned to ICD-10 for mortality) This severely limits direct comparison of U.S. morbidity diagnosis data to U.S. state and national mortality data, and limits international disease comparability.

When the U.S. transitions to ICD-10 code sets for morbidity and procedures, it will enable more direct comparability of U.S. morbidity data with U.S. mortality data, and it will also allow comparison of U.S. morbidity data with international morbidity data.

Need help preparing for ICD-10? Then check out PGM Billing's ICD-10 Codes Lookup Tool and ICD-10 Code Conversion Tool, then contact PGM to learn how they can help your organization leading up to and following the transition to ICD-10.

The October 1 deadline for the implementation of ICD-10 is rapidly approaching, and that may be very bad news for many providers.

A recent survey by the Workgroup for Electronic Data Interchange (WEDI) found that only about 20% of physician practices have started or completed external ICD-10 testing and less than 50% indicated they were ready or would be ready for the October 1 deadline.

This lack of progress is cause for concern because there are many risks associated with the transition to ICD-10. Here are five of the top ICD-10 risks.

1. Increase in denials. ICD-10 has more than 69,000 diagnostic codes and 87,000 procedure codes, compared with 14,000 diagnostic and 4,000 procedure codes under ICD-9. The opportunity for error — regardless of training — is substantial. There is an increase in the likelihood of denials relating to issues including coding errors, insufficient documentation and increased payer scrutiny of claims. As denial rates increase, so will accounts receivable days.

2. Decrease in staff productivity. According to a study in the journal Perspectives in Health Information Management, "The prevailing estimate of productivity loss [due to ICD-10] is typically somewhere between 30 and 50 percent. However, preliminary results of this time study overall were much higher, with ICD-10-CM/PCS coding taking 69 percent longer overall and, at best, 54.4 percent longer when performed by the participants with the most training in ICD-10-CM/PCS."

HIT Consultant notes, "Canada saw a 67% drop in coder productivity after ICD-10 was implemented during its government-funded rollout of the program."

The unfortunate reality is that it is going to take more time for business office staff to complete and submit claims following the transition to ICD-10, and some — if not many — of those claims will likely be denied. So even if it's "business as usual" at your organization in terms of treating patients, that will not be the case in the business office, where staff members will be scrambling to keep up with volume as they try to apply their knowledge of ICD-10, and, in some cases, learn the coding system on the fly.

3. Disruption of cash flow. As coder and biller productivity declines and denials increase, organizations will likely experience a substantial interruption of their revenue stream. If an organization lacks substantial cash reserves or does not take out a loan, a long-term cash flow disruption could quickly impact an organization's ability to pay bills, including rent, utilities and salaries.

As Healthcare Finance notes, "Even for the most prepared hospitals, there will undoubtedly be a learning curve resulting in a delay of getting bills out the door fast enough. Accounts receivable departments currently take roughly 45 to 55 days to process everything. With the transition to ICD-10, that could potentially spike to another 10 to 20 days if a staff is underprepared and can't adapt quickly enough."

4. Health plans unprepared. Even if you believe your organization is as prepared as it could possibly be for the transition to ICD-10, there's nothing you can do about the preparation of your payers.

The WEDI survey revealed that two-fifths of health plans were already prepared and nearly three-fifths of other respondents indicated they would be ready by the compliance date. While that sounds somewhat promising, looking at this another way reveals that 60% of payers are not presently prepared and 40% will not be ready by the compliance date.

If your payers fall into this 40% (there's a good chance it will be higher), you can expect much slower payments. You should also plan for staff to spend more time on follow up and denials review. Payers that are not prepared are more likely to make mistakes during claims reviews.

5. Lack of coders and billers. Some organizations may look to add skilled coders and billers to its staff in hopes of combating the risk of declining productivity. Unfortunately, as CareerStep reports, "Right now the medical coding and billing industry is short of trained medical coders by 30%. With the implementation of [ICD-10], the shortage is expected to be over 50% by the end of the year."

As if finding skilled coders and billers wasn't difficult enough, the cost of hiring qualified individuals is going up. As a report on AAPC's 2014 Salary Survey notes, "The more experience [AAPC] members have, the more money they make. And according to survey respondents, members with the most experience are worth more now than ever." Also, "The average salary for all employed members in 2014 was $50,775, which is an 8.4 percent increase and a major jump from 2013."

Is Outsourcing Right for You?

These five risks — and the many others associated with the transition to ICD-10 — have the potential to cripple an organization, which is why many practices and surgery centers are considering whether to outsource their coding and billing.

PGM Billing is one of the country's leading billing and management companies, providing practice and ASC billing services to organizations nationwide. PGM is the creator of the ICD-10 Codes Lookup Tool and ICD-10 Code Conversion Tool, and provides many other ICD-10 educational and training resources. Contact PGM today to find out how they can help your organization leading up to and following the transition to ICD-10.