Most experts agree that the switch to ICD-10, now scheduled for Oct. 1, 2014, is long overdue. But depending on whose study you read, the costs of switching could be significant.
It is impossible to deny that medicine and the nature of diagnoses have changed dramatically over the past three decades. Physicians, their staffs, and their billing services need to be well-educated and well-prepared so that the new code set is used not to delay or deny reimbursement, but to help improve patient care. ‘
ICD-10 will force physicians to be more specific than ever with how they code their patients’ diagnoses. In some cases, there will be dozens of new diagnosis codes to choose from where there used to be only a few (ICD-9 has about 13,000 total codes, version ten has 68,000). The new codes are now primarily alphanumeric and contain seven characters, plus they are organized differently. For example, injuries are grouped by anatomical site rather than injury category.
Why the added complexity? According to the Centers for Medicare and Medicaid Services (CMS), ICD-9 is woefully outdated and ICD-10 better reflects modern medicine. The new codes will give payers, regulators, and analysts the ability to refine reimbursement methodologies and conduct public health surveillance more effectively.
But what exactly does “refine reimbursement methodologies” mean? The fear is that ICD-10 will give payers new tools to delay and deny reimbursements.
“ICD-9 vs. ICD-10”
Pressure Ulcer Codes
ICD-9-CM
9 location codes (707.00 – 707.09)
Show broad location, but not depth
ICD-10-CM
125 codes
Show more specific location & depth
Example: L89.131
Pressure ulcer, right lower back, stage I
Both CMS and the American Healthcare Information Management Association (AHIMA) are trying not to sound any alarms. Both organizations say using ICD-10 will remove ambiguities and decrease the need to include supporting documentation when submitting claims. For doctors’ offices, this increased specificity is supposed to make it easier to assign codes correctly, which in turn should result in fewer errors, fewer unpaid claims and therefore fewer requests to resubmit claims with supporting documentation. Sounds logical, right?
But at least one study predicts claims using the new codes will require more documentation, not less, at a cost of tens of thousands of dollars.
Will Payers Need More or Less Documentation?
The current set of codes, the International Classification of Diseases, Version 9, has been in place for more than 30 years, and the U.S. is actually years behind other countries in adopting ICD-10. For example, the United Kingdom, France and Australia have all been using the new version since the 1990s. ICD-10 consists of two parts, but physicians will only use ICD-10-CM, developed by the Centers for Disease Control and Prevention.
It won’t be easy shedding ICD-9. Physicians use (and frequently struggle with) these codes daily. Technical schools across the country train and certify professional coders to work in medical offices, consultants have built valuable businesses to help refine the codes chosen by doctors, and there is even an association of certified coders (the AAPCC). Then there are the insurance companies that have vast information systems built around the use of ICD-9 codes to support payments and justify denials.
And let’s not forget the hundreds of vendors – from developers of practice management software and electronic medical records to the many billing services and revenue cycle management firms – that are all knee-deep in ICD-9 on a daily basis. For software companies, ICD-9 codes are typically part of the logic used in various system components or billing modules. Patient problem lists, appointment systems, reports, and more will be impacted.
It also won’t be cheap for medical offices to switch to ICD-10, according to a study commissioned by a coalition of national medical trade groups, including the American Medical Association. Cost estimates range from nearly $84,000 for a small practice to just under $300,000 for practice with 10 doctors. The study, performed by Nachimson Advisors LLC, points to typical factors contributing to these costs: staff training, superbill revision, IT system changes and cash flow disruptions.
But the study also predicts that analyzing payer contracts, dealing with coverage determinations, and “increased documentation costs” will be significant challenges, warning that “additional documentation could be required to support a patient’s treatment plan.”
Out of all the factors cited by Nachimson, the costs of increased documentation contribute more than 50 percent of the predicted additional costs – an ominous warning and certainly contrary to one of the advantages that CMS says the new code set is supposed to deliver.
What to be Wary Of
With a deadline more than 2 years away, physicians, administrators and their staff are taking baby steps to prepare for ICD-10. The American Association of Professional Coders (AAPC) only recently started offering “ICD-10 Bootcamps.”
But consultants are warning of a turbulent switch to the new system. And because many practices are adopting new technologies today, such as electronic medical records or upgraded revenue cycle management services, doctors are warned not to contract with companies whose systems will soon be obsolete.
“What if you purchase new software today, but in 2014 the vendor demands a huge fee to ‘upgrade’ to ICD-10? And what if you refused to pay that fee, what then?” warned Chris Acevedo, owner of Acevedo Consulting, a Delray Beach, Florida-based firm that specializes in compliance and coding. “Same question for billing services – if they are providing your practice software, don’t contract with them unless they are prepared to adopt ICD-10 without any additional costs to you. Get it in writing.”
Acevedo also warns that even though payers will stop accepting ICD-9 on 9/30/14, your practice or your billing service will still be dealing with the obsolete code set for several weeks, if not months. “That’s because the claims you filed before the deadline used ICD-9, and you’ll still need to track those claims and be sure they are paid appropriately,” he said.
Between now and October of 2014, it’s important that you prepare your practice for the ICD-10 switch and make the right decisions to be protected from overpaying for the change. The code set transition likely won’t be easy, but by educating yourself on what to expect, you can make to move to ICD-10 a little less painful.
How are you preparing for the ICD-10 transition?
Brian Foster is a Director of Client Solutions at CareCloud with over 20+ years in the healthcare industry. Throughout the 1990s he was the Publisher of a specialized trade paper for healthcare industry professionals. Since 2001, Brian has worked as a senior business development professional, helping medical practices to provide the highest-quality patient care while simultaneously improving revenues. He can be reached at BFoster@carecloud.com or (786) 879-9200.
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