Why We Need to Continue Our Focus on ICD-10-CM Implementation

The International Classification of Diseases (ICD) is the global platform for assigning diagnosis codes.  On October 1, 2015, the United States officially adopted the 10th version (ICD-10) rendering the 9th version (ICD-9) invalid for use by any HIPAA-covered entity.  ICD-10 provides 55,000 more codes than ICD -9 allowing for greater specificity in assigning diagnoses, clinical tracking, cause of injury, and patient outcomes.  Examples of the detail included in this expansion include laterality, comorbidity and comortality, cause of injury/illness, severity, and exact location.  Historically one of the single largest initiatives in the healthcare industry, ICD-10 implementation in this country was delayed multiple times due to industry push-back stemming from concerns about the cost of adopting the change and potential negative impact to the adjudication and payment of medical claims.

About halfway through the first year post-implementation stage, the industry has confirmed that some of those concerns proved to be valid (such as a slow-down in coding productivity) while others, like the feared increase in claim denial rates, haven’t been experienced in significant volumes up to this point.  However, we cannot breathe a sigh of relief yet. 

Currently, it appears that most insurance carriers are adjudicating claims without strict regard to specificity of the diagnosis codes used.  This isn’t too surprising, as Medicare adopted a one-year reprieve that stated that less-specific ICD-10 codes would qualify for reimbursement as long as the code is complete in number of digits and falls within a ‘code family’ (set of related diagnosis codes) that supports the service rendered.  This excludes National and Local Coverage Determinations (NCD and LCD) that may require more specific diagnosis codes to qualify for payment. Since this reprieve expires on October 1, 2016, it is expected that, over the next several months, we will likely see an increase in related denial rates from insurance carriers raising their expectations for more specificity in the ICD-10 codes used on medical claims.  Some healthcare financial experts predict that services requiring pre-authorizations and pre-certification will be the areas affected first.

APS continues to monitor the impact of ICD-10 implementation while it plays out over the rest of the year.  Over the next several months, we will be reviewing our clients’ clinical documentation practices to determine any areas needing improvement for educational feedback, tips, and resources.  While ICD-10-CM isn't going to increase revenue for physician practices, it could ultimately lead to delayed or less revenue for practices that consistently report unspecified diagnosis codes in an environment of increased payer scrutiny.   The good news for providers is that ICD-10 terminology more closely correlates with current clinical terminology than ICD-9.  Complete clinical documentation, which is the source for diagnosis code assignment, will reflect all clinical details that directly point to, and support, coding the most specific ICD-10 code for the service rendered.