On October 1 a seismic shift in the system upon which insurance reimbursement to health providers is based will occur. After years of delay, medical practices must begin using the new ICD-10 coding system, a highly complex set of diagnostic and procedural codes that replaces the antiquated ICD-9 system (established in 1979).
Hospitals and physician practices have taken widely varying steps to prepare for the change — with some conducting extensive training and others assuming a lack of responsibility — and are expressing equally disproportionate levels of panic or calm at the impending change.
Industry experts are likewise pontificating on whether the switch will accelerate needed improvements to health IT and billing systems or whether the Y2K-like predictions of chaos will inflict massive damage before the kinks are worked out of the new system.
Either way, the switch from some 14,000 to 70,000 codes will have a big impact.
In theory, more specific medical codes will allow physicians to be reimbursed for more tailored services and give researchers access to detailed diagnostic and treatment data. But lengthy adjustment periods and errors in coding processes during the transition could add millions in costs before much benefit is seen.
Some experts predict that claims denials will double and hospitals’ accounts receivable will increase by three to five days, while others expect the transition to occur with minimal impact.
While well-trained staff members with assistive software may see minimal impact to manual coding practices, decreased productivity and increased stress levels at less-prepared practices will likely take their toll on caregivers and office workers alike. In addition to learning the new ICD-10 codes, administrators will continue to work with the ICD-9 system for months as older claims work their way through the billing process.
Meanwhile, insurers are preparing for worst-case scenarios such as breakdowns of insurance claim filing systems and masses of improperly filed reports. The Centers for Medicare and Medicaid Services (CMS) has issued contingency plans for five such scenarios, though the agency hopes for smooth sailing (even in the event of a government shutdown). Medicare is also allowing doctors to skimp on reporting certain diagnostic details for the first year of the change, as long as the main diagnostic codes are used correctly.
ICD-10 will have some impact on patients, though much of the general population is ignorant of the impending switch. Once the new codes begin filtering through claims systems, consumers could see confusing bills when services are denied for insurance payment due to coding or processing errors. Patients who undergo diagnostic procedures on a regular basis may see added paperwork filing requirements.
What is truly mind-blowing is that the ICD-10 coding system was originally intended to take effect in 2011. Legislative delays have actually created costs for companies that began proactively shifting computer billing systems to the new codes and then had to pull back to ICD-9. In such cases, the procrastinators took the cake.
The basis for ICD-10 is a medical procedures system set up by the World Health Organization. While the US system does add a vast number of codes beyond WHO’s recommendations, European countries and other nations implemented their own ICD-10 systems years ago. Indeed, some are working towards ICD-11.
That the US medical coding system is so far behind other nations seems to indicate that the change is way overdue, and that bureaucratic delays have made the situation even more complex. At the same time, the US health system is already struggling under the weight of quality and cost reform changes implemented through the Affordable Care Act.
By creating a massive database of detailed health information, ICD-10 is intended to assist with the shift towards value-based payment and contribute to other health reform goals for improved disease management, outcomes evaluation, and public-health problem identification. But progress on these goals may be reversed for a time as providers and insurers work out the kinks of the new system.