Transitioning to ICD-10: what does it mean for you?

Physical Therapy, June, 2009 by Sarah Nicholls-Sharp

Although the deadline is more than 4 years away, the time is now for physical therapists (PTs) to begin preparing for the transition from ICD-9 (International Classification of Disease, 9th revision) code sets to the ICD-10 series.

Fortunately, a wealth of materials is available online to assist you--including a dedicated page of ICD-10 resources on APTA's Web site. But before taking a closer look at those materials, let's examine the advantages and costs of the pending transition.

ICD-9 to ICD-10

The US Department of Health and Human Services has mandated that entities covered under the Health Insurance Portability and Accountability Act (HIPAA)--health plans, health care clearinghouses, and health care providers that transmit health information electronically--make the transition by October 1, 2013. The ICD-10 code sets will replace the outdated ICD-9 system now used in US hospitals and medical offices.

ICD-9 was developed by the World Health Organization (WHO) to classify causes of death. Many nations adopted and then modified ICD-9 to meet their specific health care needs. The United States, for example, has developed a clinical modification, ICD-9-CM, to include non-fatal diseases, and ICD-9-PCS for inpatient hospital procedure coding. ICD-9-CM has been used in this country since 1973 for morbidity applications. ICD-9-PCS has been employed since 1983 to assign diagnostic related groups associated with Medicare's inpatient hospital prospective payment system. ICD-9-CM codes are three to five digits long, organized into chapters based on body system (circulatory, musculoskeletal, etc). ICD-9-PCS codes are three or four digits long and also are organized into chapters based on body system.

ICD-9 sets present many coding challenges--and, in the opinion of many health care stakeholders, carry significant limitations. These codes are 29 years old, and many medical advances have occurred over the past three decades. Yet there are 16,000 ICD-9 codes--a number insufficient to allow for the orderly and efficient addition of new codes. Many chapters are now full, so if a new code is created in a particular area, such as eye care, it must be added to an unrelated chapter. Also, ICD-9 codes were not equipped to provide enough detail to support emerging needs, such as pay-for-performance initiatives. For instance, ICD-9 codes do not distinguish whether a broken leg is the right or left.

WHO developed the ICD-10 codes, as well, and they already have been adopted by many other countries. Many US stakeholders believe that disease tracking and other functions that occur among nations have been hampered by retention of our current diagnosis classification system. ICD-10-CM codes are three to seven alphanumeric characters long, and there are 68,000 of them--eliminating the limitations of ICD-9-CM. They are designed to provide a greater level of specificity, such as whether an injury occurred on the left or right side of the body. ICD-10-PCS codes, meanwhile, are seven alphanumeric characters long and can be grouped together into 30 procedures identified by the leading alpha character.

The scheduled implementation of ICD-10 has raised concerns, however. Many systems currently in place--including electronic health records and billing software are equipped to deal only with ICD-9 codes. Modifying or replacing these systems will entail costs. Further, many people who use ICD-9 have little or no familiarity with ICD-10 coding--and, with 52,000 more codes than ICD-9, ICD-10 dearly is more complex and will require more training than has ICD-9. As people are learning ICD-10, they may submit claims containing incorrect ICD--10 information, which may lead to claim denials and resubmissions.

Despite these concerns, the Centers for Medicare and Medicaid Services (CMS) outlined in the proposed rule, issued in August 2008, the anticipated benefits of the transition and set an implementation date of October 1, 2011. During the rulemaking process, CMS received many comments from stakeholders applauding the adoption of ICD-10 but also raising concerns about the implementation deadline. In fact, the agency received a total of more than 3,000 comments from APTA and other entities. As a result, in the final rule, CMS pushed back the implementation date by 2 years, to October 1, 2013.

Provisions of the Final Rule

In the final rule, CMS outlines the estimated costs of the transition from ICD-9 to ICD-10, which include such expenses as training coders and health care providers, and updating billing software to accommodate the more-detailed ICD-10 codes. CMS also estimates the share of the financial burden to befall stakeholders, including the states and health care providers. It bases estimated costs on two studies conducted to develop more information about the transition and comments received during the rulemaking process.

CMS anticipates that the private sector will incur costs exceeding $130 million per year beginning 3 years after publication of the final rule and ending 3 years after implementation. However, the cost to states and local and tribal governments is not expected to exceed $130 million per year. While a full analysis of the estimated costs is available in the final rule, the following are a few highlights: