ICD-10 Background
The Centers for Medicare and Medicaid Services (CMS) has mandated a major change in its coding
scheme with an effective date of October 1, 2014. The change requires a conversion from the current
International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) code set to the
International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and Procedure
Coding System (ICD-10-PCS) code sets. A key aspect of the change is that the number of codes available
will increase from approximately 17,000 to approximately 155,000. In addition to an increase in the
number of codes, the code structure changes from five to seven alphanumeric characters. The changes
are designed to provide more specificity and accuracy in the assignment of diagnoses and procedures in
support of reporting better quality of care data and improved accuracy in billing and claims submissions.
The switch from ICD-9 to ICD-10 affects all aspects of the healthcare industry and requires a full analysis
of policies, procedures and information systems that may be affected by this change. Front desk, order
entry, surgery/procedure scheduling, billing, coding, authorizations, referrals, and reporting are just a
few of the areas of an outpatient provider organization that will see significant change.
In order to ensure that your operations remain effective within an ICD-10-CM environment, your
organization will need to accurately capture and report clinical diagnoses for patients’ medical
conditions. ICD-10-CM codes will directly affect healthcare reimbursement, quality assessment,
benchmarking, research, public health reporting and strategic planning. The United States has
recognized the limitations of the current coding system to accommodate advances in medicine and
medical technology. The ICD-10-CM coding system addresses the growing need for quality data and can
encompass the ever-increasing number of diagnoses, which ICD-9-CM is currently struggling to adapt to.
The World Health Organization (WHO) created ICD-10 (International Classification of Diseases and
Related Health Problems, Tenth Revision) as a more effective tool for coding mortality statistics on a
global basis. The National Center for Health Statistics (NCHS) created a clinical modification (ICD-10-CM)
and the Centers for Medicare and Medicaid Services (CMS) created the ICD-10-PCS procedure coding
system for use in the United States; however, ICD-10-PCS will not replace the Current Procedural
Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) code sets for reporting
services and procedures in outpatient and office settings.
On January 16, 2009, the Department of Health and Human Services (DHHS) issued a final rule requiring
all HIPAA covered entities, including health plans, healthcare clearinghouses, and healthcare providers,
to transition to the new ICD-10-CM diagnosis coding system and ICD-10 Procedure Coding System (ICD10-PCS) by October 1, 2013. On February 16, 2012 the Department of Health and Human Services
(DHHS) announced a possible delay in the implementation date for ICD-10; this announcement caused a
great deal of concern and controversy. Many organizations had already spent considerable time and
resources to prepare for next year's scheduled implementation. On August 24, 2012, DHHS released the
final rule and announced there would be a one year delay. The new implementation date is October 14,
2014. We urge you to view this delay as an opportunity for additional preparation to ensure your
organization's transition is smooth and to begin realizing the benefits of ICD-10
A prerequisite and interdependency to the ICD-10 transition is the implementation of the new ANSI X12
Version 5010 transaction code set. Effective January 1, 2012, all covered entities, including health plans,
healthcare clearinghouses and most healthcare providers, were required to submit their electronic
transactions (including claims, remittances, eligibility, claims status requests and other transactions)
using this new standard in order to remain HIPAA (Health Insurance Portability and Accountability Act)
compliant. The implementation of the 5010 standard is not new but rather an upgrade to the 4010
standard implemented in 2000. Due to the number of requests for fixes and enhancements, the 4010
standard had become inadequate and would not support the new ICD-10 code sets. On March 15, 2012,
it was announced by CMS that the enforcement of 5010 implementation would be delayed until June
30, 2012 to give providers additional time to implement required software updates. It is important to
note that this delay was not a delay to implement rather it was a delay to the enforcement of the new
format. As of July 1, 2012 any entity not utilizing the ANSI X12 Version 5010 to submit claims is subject
to fines from the federal government. Bottom line; ensure your organization is using this new format.
ICD-10 Overview
Healthcare providers currently use ICD-9 codes in many healthcare processes and systems, including
computer software, medical records, encounter forms, databases, interfaces, policy and procedure
manuals, training manuals, programs and communications with outside vendors and trading partners
(e.g. HIPAA electronic healthcare transactions). A wide variety of stakeholders use reports containing
diagnosis and procedure codes for critical decision making, such as determining medical necessity and
utilization review, measuring performance, monitoring quality, evaluating risks and performing clinical
research.
ICD-10 constitutes a significant change in the logic and hierarchical structure of the coding system and
requires expansion of code field size, the addition of more specific alphanumeric, and a complete
redefinition of code values and their interpretation. The increased number of codes allows for a much
greater level of specificity for diagnoses and inpatient procedures. The table below provides a high-level
comparison between ICD-9-CM and ICD-10-CM.
ICD-9-CM: Approximately 13,000 codes
•
•
•
•
•
3-5 characters in length
First character may be alpha (E or V) or
numeric; characters 2-5 are numeric
Limited space for adding new codes
Lacks Detail
Lacks laterality (Left vs. Right)
Example:
ICD-9-CM
ICD-10-CM
821.01
S72.344
ICD-10-CM: Approximately 68,000 Codes
• 3-7 characters in length
• Character 1 is alpha; characters 2 and 3
are numeric; characters 4-7 are alpha or
numeric
• Flexible for adding new codes
• Detail specific
• Has laterality
Closed fracture of shaft of femur
Displaced spiral fracture of shaft of right femur
ICD-9 is over 30 years old and is currently our only nationally mandated standard of data capture for a
patient’s health condition and for inpatient procedures. The transition to ICD-10 will provide a better
foundation for quantifying healthcare data. It will address the critical need for high quality national data
by providing the evidence of corresponding quality and outcomes to understand why our costs are
exploding. ICD-10-CM and ICD-10-PCS will allow providers of healthcare services to capture data that is
more meaningful than the data produced by ICD-9, thereby improving the ability to measure health care
services and patient outcomes.
The implications of migrating to ICD-10 include a significant re-education of key healthcare stakeholders
and participants including physicians, coders, and other healthcare professionals. The ICD-10 transition
will be among the largest regulatory mandates for the industry and one of the most significant revisions
of medical coding. Many believe implementation of this mandate will far surpass the level of effort
required to implement the standard HIPAA transactions. It will lead to major business process and
information system changes where coded data is captured and utilized and affect strategy, people,
policies and procedures within your organization. In order to meet the October 1, 2014 deadline,
planning must commence immediately.
ICD-10 will require providers to document in more detail in order to allow coders and billers to translate
documentation to a more specific code. This changes the game for everyone in the organization.
Remember, the rules of coding are to code to the highest level of specificity and failure to utilize specific
codes will likely result in increased denials, more work, more claims follow up and loss of revenue.
To facilitate the transition from ICD-9-CM to ICD-10-CM, we developed this toolkit to assist your
organization in adopting a proactive assessment and implementation planning strategy; this strategy
benefits your organization by providing the assessment efforts to help determine strategic direction,
promote the creation of timelines, and determine the cost of the ICD-10 implementation.