ICD-10 is an acronym for International Classification of Diseases, 10th Revision. It is a set of codes for reporting death and disease. The World Health Organization (WHO) began working on the coding system in 1983.
The World Health Assembly endorsed the ICD-10 system in 1990 and it started being used by member states of the WHO for coding national statistics pertaining to diseases and death beginning in 1994. In October 2002 the WHO published it in 42 languages. That same year 138 countries began using it for reporting deaths. Another 99 countries began using it in 2002 for reporting disease. On January 1, 1999 the United States started using it to record information on death certificates.
The following countries adopted it for healthcare reimbursement or classifying types of patients, their treatment and their treatment costs (casemix) as follows:
- United Kingdom (1995)
- Nordic countries (Sweden, Finland, Denmark, Iceland, Norway) (1994 through 1997)
- France (1998)
- Belgium (1999)
- Germany (2000)
- Canada (2001)
In order to answer the questions – what is ICD-10 and how will it impact healthcare in the United States – it is important to understand the relationship between coding and reimbursement for medical services. In order to be reimbursed for medical services healthcare providers must include two types of codes on claims they submit to insurance companies. Those codes are service codes and diagnosis codes. They represent a language that doctors and other medical care providers use to communicate with insurance carriers.
Service codes tell the insurance company what service(s) was provided. Examples are an office visit, appendectomy, EKG, blood drawing, etc. Even though the name(s) of a service(s) might be included on the insurance claim, unless the specific code(s) for a service(s) is entered on the claim form the claim is not recognized or processed because the code(s) is the language necessary for the computers of the third-party payers to read the claim. The codes used to bill for services provided outside of the hospital or Current Procedural Terminology (CPT) codes.
The second type of code which must be included with an insurance claim is the diagnosis code. It explains to the insurance company the reason the service was provided. Examples are diabetes, high blood pressure, heart disease, cancer, etc. Again, even though the actual name(s) of a disease(s) or condition(s) might be recorded on the claim form submitted to a third-party payer, the claim will not be processed or paid without the corresponding code(s) associated with the disease(s) or condition(s). Codes used for identifying diseases and conditions are International Classification of Diseases (ICD) codes.
The ICD-10 transition will be a change from the use of the International Classification of Diseases, 9th Revision (ICD-9) based system for medical documentation and reimbursement to one that is ICD-10 based. The United States began using ICD-9-CM codes for medical documentation and reimbursement in 1979. An ICD-9-CM service code system was also developed from it for documenting and billing for services provided in the hospital. ICD-9-CM stands for International Classification of Diseases, 9th revision, Clinical Modification. It is an alteration of the original ICD-9 system which the World Health Organization authorized for use by the United States federal government.
As is the case with ICD-9-CM, ICD-10-CM is a modified form of ICD-10. Again, the World Health Organization who owns the copyright authorized the modification for use by the United States federal government. Therefore, the coming ICD-10 transition will really be the ICD-10-CM transition. Other terms sometimes used to refer to it are ICD-10 conversion and ICD-10 implementation.
How ICD-10-CM Differs from ICD-9-CM
Since the current coding system is more than 30 years old and technology and diagnosis have changed, it is out of date. The ICD-10-CM system which will replace it has almost 5 times more codes and a greater degree of specificity. In terms of actual numbers the current system has 14,035 codes and the system to come has 68,069 codes. The ICD-10-CM system is more specific because the length of the diagnosis codes is from 3 to 7 digits compared to the current system in which the length of the codes is from 3 to 5 digits.
ICD-10 implementation date
The Department of Health and Human Services (HHS) adopted ICD-10 as a standard and published a final ruling in January 2009. It initially set a compliance date of October 1, 2011. That date was postponed for two years until October 1, 2013. In 2012, the implementation date was further postponed to October 1, 2014. As of late February 2014, the department officially announced that there would be no further delays in the implementation but as part of the sustainable growth rate (SRG) it was further postponed until October 1, 2015.
Who must comply?
All HIPAA covered entities must be in compliance with the law as of October 1, 2015. A HIPAA covered entity is any organization or individual which provides health services, pays for health care services or interacts with patients’ records. Providers include physicians, chiropractors, clinics, dentists, hospitals, pharmacies, nursing homes, etc. All medical insurance companies must comply except for Workers’ Compensation carriers, property and casualty insurance companies and automobile insurance companies. Clearing houses and other entities which process healthcare claims must also be in compliance.
What are the consequences of noncompliance?
It will be illegal for Health insurance companies to process or pay healthcare claims submitted with ICD-9 codes on and after October 1, 2015. Furthermore, they won’t be able to because their up-to-date systems won’t recognize the older codes. The consequences for providers who submit claims with the older codes are worse because they simply will not get paid.
The cost for providers and insurers to make the transition is rather enormous. In fact, up until a couple of weeks prior to this posting the estimated costs for providers to make the transition based on 2008 projections according to various publications were as follows:
- Small medical practice – $83,200
- Medium-size medical practice – $285,000
- Large medical practice of 100 or more physicians – $2,728,780
The good news, according to a recent report by the American Medical Association, is that those figures are probably wrong. The bad news is that there probably too low – the cost will probably be between two and three times higher than the initial projections for each category.
Patients will need to make contingency plans in the event that there is a disruption in their care. They will also need to adapt to the changes they will have to make and how they provide information in order to enable providers to meet the more specific and detailed documentation which the system will require.
The transition will have far-reaching effects throughout the healthcare system and will require substantial planning and preparation on the part of physicians, other healthcare providers and patients alike. It will also require significant adaptation on the part of all involved.