ICD-10: The Good, The Bad, and How to Prepare Donald E. Horton, Jr. Vice President, Public Policy & Advocacy LabCorp September 25, 2007 Overview • Current Legislative and Regulatory Landscape • The Good: Perceived Benefits of Transition to ICD-10 – Comparing ICD-10 to ICD-9 – New Features in ICD-10-CM • The Bad: ICD-10 Implementation Challenges – Case Study: Clinical Labs – Examples of ICD-10-CM Complexity • How to Prepare: Practical Steps to Get Ready 2 Legislative / Regulatory Landscape • Pending Legislation – US Senate Bill 628 • Introduced 2/15/07 • Currently in Senate Health, Education, Labor and Pensions (HELP) Committee • Would require HHS to issue a final rule by 10/1/08 requiring: – Implementation of ICD-10 by 10/1/11 and – Version 5010 of HIPAA transactions by 4/1/11 • Passage this session is unlikely; the Senate HELP Committee passed the Wired for Healthcare Quality Act without ICD-10 3 Legislative / Regulatory Landscape • Potential Legislation – Sources indicate House Republicans intend to introduce an HIT bill in September that would require: • Upgrading to version 5010 of the X12 HIPAA Transactions by April 2009 • Conversion to ICD-10 by October 2010 – House Democrats also likely to introduce HIT legislation in September • Likely to focus on privacy; unclear whether ICD-10 will be included • Pending Regulation – HHS Proposed Rule • Sources indicate a proposed rule is under HHS review that would require ICD-10 implementation by 10/1/11 • Questions and budget issues are slowing its release 4 Legislative / Regulatory Landscape • Proponents of quick adoption of ICD-10 include: – – – – – – – – Advanced Medical Technology Association (AdvaMed) American Health Information Management Assoc. (AHIMA) American Hospital Association (AHA) American Medical Informatics Association (AMIA) Federation of American Hospitals (FAH) Medical Device Manufacturers Association (MDMA) Premier Siemens 5 Legislative / Regulatory Landscape • Opponents of quick adoption of ICD-10 include: – – – – – – – – – – – American Clinical Laboratory Association (ACLA) American Medical Association (AMA) Blue Cross Blue Shield Association (BCBSA) College of American Pathologists (CAP) Medical Group Management Association (MGMA) American Association of Community Colleges Higher Education Allied Health Leaders (HEAL Coalition) American College of Emergency Physicians American Society of Anesthesiologists American Association of Orthopaedic Surgeons American College of Gastroenterology 6 The Good: Perceived Benefits of ICD-10 • ICD-9-CM (International Classification of Diseases, Ninth Revision, Clinical Modification) has its problems... – Developed by World Health Organization (WHO) in 1970’s, implemented in 1979 • Diagnosis codes (used by all providers) • Procedure Codes (used by hospitals for inpatient reporting) – No longer supported by WHO - other industrialized nations have adopted ICD-10 – No longer reflects modern clinical practice and current medical knowledge – Running out of space for new codes 7 The Good: Perceived Benefits of ICD-10 • ICD-9-CM’s problems have consequences: – – – – Inability to collect accurate data on new technology Increased submission of documentation to support claims Lack of specific quality data to support health outcomes Less accurate reimbursement for some providers • On the procedure code side: – Several distinct procedures performed in different parts of the body that have very different resource utilization are grouped under the same procedure code • On the diagnosis code side: – Pathologically different diseases may be grouped under the same diagnosis code; hard to study different treatment outcomes 8 The Good: Perceived Benefits of ICD-10 • Healthcare data needs have evolved since ICD-9 – Greater demand for more specific data – Greater focus on data to analyze quality, safety and efficacy of medical care – Public health and bioterrorism surveillance require more international cooperation – Increased importance of interoperable coded data that can be mapped to other codes/vocabularies/terminologies in health information exchange – New technologies and therapies need appropriate representation 9 The Good: Perceived Benefits of ICD-10 • ICD-10 as a solution to ICD-9 problems – ICD-10-CM (International Classification of Diseases, Tenth Revision, Clinical Modification): Diagnosis Codes – ICD-10-PCS (International Classification of Diseases, Tenth Revision, Procedure Classification System): Procedure Codes (replaces volume of 3 of ICD-9-CM for hospital inpatient procedures) – Restructured Classification (not just an “update” of ICD-9) – More alphanumeric codes – Expanded code length and narrative description – More granularity in many areas – New procedures and technologies are easily incorporated 10 Comparing ICD-10 to ICD-9 Code Set Number of Codes Characters ICD-9-CM (Diagnosis) 13,000 Up to 5, alphanumeric plus decimal ICD-10-CM (Diagnosis) 120,000 Up to 7, alphanumeric, case sensitive, plus decimal 3 or 4 numeric digits, decimal after second digit 7 alphanumeric characters, no decimal ICD-9-CM (Procedure) 4,000 ICD-10-PCS (Procedure) 86,617 11 Comparing ICD-10 to ICD-9 • ICD-10 Major Changes: – Expansion of Detail (2,033 categories - 855 more than ICD-9) – Injuries restructured: • ICD-9, Type of Injury – Fractures 800-829 – Dislocations 830-839 – Sprains/Strains 840-848 • ICD-10, Site of Injury -- Injuries to Head S00-S09 -- Injuries to Neck S10-S19 -- Injuries to Thorax S20-S29 ICD-10-CM Major Changes – Added trimesters to OB codes (fifth-digits from ICD-9-CM will not be used) – Revised diabetes mellitus codes (5th digits from ICD-9-CM will not be used) – Expanded codes (e.g., injury, diabetes, postoperative complications, alcohol/substance abuse) – Added code extensions for injuries and external causes of injuries 12 Diabetes: From ICD-9-CM to ICD-10-CM ICD-9-CM ICD-10 ICD-10-CM 250.X E10.X Insulindependent E11.X Non-insulin dependent E12 Malnutritionrelated E13 Other specified E14 Unspecified 4th digit for type of complication E08 Diabetes due to underlying condition E09 Drug or chemical induced diabetes E10 Type 1 diabetes E11 Type 2 diabetes E13 Other specified diabetes mellitus E14 Unspecified 4th digit identifies type of complication 5/6th digit for type of complication 4th digit identities type of complication 5th digit “1” identified juvenileonset 5th digit “0” identified adultonset 13 New Features in ICD-10-CM • Injury & External Cause Chapter Extensions in ICD-10-CM – a Initial encounter – d Subsequent encounter – q Sequelae • Fracture Extensions in ICD-10-CM – a Initial encounter for closed fracture – b Initial encounter for open fracture – d Subsequent encounter for fracture with routine healing – g Subsequent encounter for fracture with delayed healing – j Subsequent encounter for fracture with nonunion – q Sequelae 14 New Features in ICD-10-CM • Place of occurrence – Y92.0x Home – Y92.1x Residential institution – Y92.2x School, other institution and public administrative area – Y92.3x Sports and athletic area – Y92.4 Street and highway – Y92.5x Trade and service areas – Y92.6 Industrial and construction area – Y92.7 Farm – Y92.8x Other specified place 15 New Features in ICD-10-CM • Activity – Y93.0x Injured while engaged in sports activity – Y93.1 Injured while engaged in leisure activity – Y93.3x Injured while engaged in other types of work – Y93.4 Injured while resting, sleeping, eating or engaging in other vital activities – Y93.8 Injured while engaged in personal hygiene – Y93.9 Injured during unspecified activity 16 The Bad: ICD-10 Implementation Challenges • Cost • Development Issues • Conversion Issues • Training Issues • Cash Flow and Productivity Issues • Coordination with Other Activities 17 The Bad: ICD-10 Implementation Challenges • • Cost: Hold on to your wallet... System Changes: – Rand $700 Million – Nolan: $10.6 Billion • Training: – Rand: $400 Million – Nolan: $1.5 Billion • Productivity: – Rand: $450 Million – Nolan: $1 Billion • Recontracting: – Rand: n/a – Nolan: $400 Million GRAND TOTALS: RAND: $1.55 BILLION NOLAN: $13.5 BILLION COMPARE HIPAA TCS EXPERIENCE: HHS Impact Analysis: $1 Million Per Payer Actual: $21 Million Per Payer (from survey of small to mid-size plans, ranging from $6-34 Million) 18 The Bad: ICD-10 Implementation Challenges • Development Issues: Anything that includes ICD-9 codes will require changes – – – – – – – – Programs Screens Reports Requisitions Forms (printed or electronic) Interfaces Contracts Policy manuals [INSERT ADDITIONAL ITEMS HERE....] 19 The Bad: ICD-10 Implementation Challenges • Development Issues: Impact of New Code Descriptions on Storage, Screens and Forms Design – ICD-10 code descriptions are much more descriptive; longer abbreviations necessary for understanding • ICD-9 descriptions: – Short, 24 characters – Long, 255 characters • ICD-10 descriptions: – Short, 24 characters – Medium, 70 characters – Long, 255 characters – Storage of longer descriptions requires increased storage and file and database changes – Screens, displays, forms and reports must accommodate drop down menus with new descriptions, more landscape for larger data fields 20 The Bad: ICD-10 Implementation Challenges • Development Issues: The current version of HIPAA standard transactions, ASC X12 N 4010A1, does not support ICD-10 – ASC X12 N 5010 does support ICD-10, but: • 5010 contains approximately 845 changes from 4010 • Will require two years (from Final Rule) to analyze, program, test, implement and evaluate – Implementation of 5010 is a pre-requisite to implementation of ICD-10 – ICD-10 cannot be implemented simultaneously with 5010 – Transactions that must upgrade to 5010 to support ICD-10: • 837 (claims, encounters, and coordination of benefits) • 278 (referral certification and authorization) 21 The Bad: ICD-10 Implementation Challenges • Conversion Issue: Support of multiple code sets – Dual usage of ICD-9 and ICD-10 will be needed for some period of time to accommodate different implementation schedules among trading partners • Conversion Issue: Crosswalk Mapping – Backward Mapping ICD-10-CM to ICD-9-CM: “Many to One” mapping; official rules will be available, will be used for several years – Forward Mapping ICD-9-CM to ICD-10-CM: “One to Many” mapping; official rules may be available, but user intervention may be needed; may be used for several years – SNOMED-CT Crosswalks • May need maps between SNOMED-CT and ICD-10-CM 22 The Bad: ICD-10 Implementation Challenges • Other Conversion Issues – Longitudinal studies requiring common nomenclature – Clinical Decision Support Systems – Disease Management and Case Management – Data Warehousing – Tumor registries and other repositories 23 Case Study: Clinical Labs • As indirect providers, clinical labs generally do not have patient contact, as specimens are often collected in the physician’s or other provider’s office • Currently, clinical labs are required to submit diagnosis codes in all electronic claims and in most paper claims to third party payers • Clinical labs are generally dependent upon ordering providers to provide diagnosis codes 24 Case Study: Clinical Labs • Many clinical labs experience significant front-end claim suspensions due to missing ICD-9-CM coding, requiring follow up • Without adequate physician office training on ICD-10CM, lab claim suspension could increase significantly, requiring more follow up and impacting cash flow • Physician office training will be critical to labs 25 Case Study: Clinical Labs • Many clinical labs employ certified translators to translate narrative diagnoses to the appropriate ICD-9CM code • Current translator qualifications include various comprehensive training and certification programs • Due to the complexity of ICD-10-CM, more highly qualified (more expensive) specialists may be needed for translation; narrative diagnoses may no longer be acceptable 26 The Bad: ICD-10 Implementation Challenges • Significant effort will be required to transform information systems for ICD-10-CM; HIPAA TCS was easy by comparison • Business rule development, programming, testing, and implementation must occur for hundreds of internal software programs • Hundreds of external interfaces must be remapped • End-to-End Testing with Trading Partners will be necessary to verify that the changes are working - but few such opportunities existed during HIPAA TCS conversions 27 The Bad: ICD-10 Implementation Challenges • Coordination of Benefits (COB) may become very difficult due to differing interpretations of ICD-10-CM • ICD-10-CM’s alphanumeric, case sensitive structure could result in confusion of “O” with “0” and “I” with “1”, or vice versa • Transition to ICD-10-CM could slow transition to standard electronic transactions not yet fully utilized (e.g., the 835 electronic remittance, and the 270/271 eligibility inquiry and response) 28 The Bad: ICD-10 Implementation Challenges • ICD-10-CM’s seven (7) - character code length, alphanumeric structure, and 120,000 codes will require more storage capacity and more complex programming than required by ICD-9-CM’s five (5) - character code length, numeric structure, and 13,000 codes • Dual usage of ICD-10-CM and ICD-9-CM will place a strain on system resources 29 The Bad: ICD-10 Implementation Challenges • Implementation of ICD-10-CM may slow implementation of health information exchange initiatives (e.g., RHIOs, adoption of EHRs) • Coverage decisions by third party payers based on medical necessity will change to reflect ICD-10-CM • Simultaneous implementation of ICD-10-CM, Claim Attachments, National Health Plan Identifier (NHPI), transaction version updates and other initiatives would be burdensome and costly 30 Examples of ICD-10-CM Complexity • Confusion of “O” with “0”: – O00.1 Tubal Pregnancy – S82.121o Displaced fracture of lateral condyle of right tibia, subsequent encounter for open fracture type III, IIIB or IIIC with malunion • Confusion of “I” with “1”: – I11.0 Hypertensive heart disease with heart failure – S82.121l Displaced fracture of lateral condyle of right tibia, subsequent encounter for open fracture type IIIA, IIIB or IIIC with nonunion 31 Examples of ICD-10-CM Complexity • “x” Placeholders – T37.8x4a Poisoning by other specified anti-infectives and antiparasitics, undetermined, initial encounter – T37.94xa Poisoning by unspecified anti-infective and antiparasitics, undetermined, initial encounter • Down Syndrome - Granularity and Description Length – ICD-9-CM: 758.1 Down Syndrome – ICD-10-CM: • • • • • Q90 Down Syndrome Q90.0 Trisomy 21, nonmosaicism (meiotic nondisjunction) Q90.1 Trisomy 21, mosaicism (mitotic nondisjunction) Q90.2 Trisomy 21, translocation Q90.9 Down syndrome, unspecified 32 How to Prepare 33 How To Prepare • Form an ICD-10-CM / ICD-10-PCS Transition Team – Information Systems – Billing – Operations – Legal – Compliance – Internal Audit – Coders / Translators – Communications / PR / Marketing • Educate and gain support of senior management 34 How to Prepare • Educate yourself on ICD-10-CM at www.cdc.gov/nchs • Educate yourself on ICD-10-PCS at www.cms.hhs.gov • Closely monitor ongoing policy developments relating to compliance dates for 5010 and ICD-10 • Comment on proposed rules to identify issues and propose solutions • Once definite compliance dates are mandated, develop a timeline for conversion to 5010 and ICD-10 – Consult advisory group recommendations (e.g., NCHICA, NCVHS, WEDI) – Consult with payers and payer organizations (e.g., BCBSA) – Consult with other providers and provider trade organizations 35 How To Prepare • The timeline should: – Recognize the necessity of implementing the 5010 version of standard transactions before implementing ICD-10-CM – Seek to coordinate efforts with payers and ordering providers – Incorporate phases for analysis, development, internal testing, external trading partner testing and implementation for both 5010 and ICD-10-CM – Emphasize the importance of appropriately timed education, internally and externally • Address budgeting and staffing issues 36