ICD-10 and the New HIPAA Transaction Standards Are Here!

October 13, 2009
Chris Cole

This session focuses on the recently released ICD-10 regulation and its impact on your practice. This session addresses critical issues such as practice compliance dates; the intersection of ICD-10 and the latest version of the Health Insurance Portability and Accountability Act (HIPAA) electronic transactions standards; how physician practices can address the many challenges ICD-10 will bring in the areas of payer contracting, encounter documentation, staff training, research and benchmarking data, and software modifications; and how to work with vendors and payers to comply with this mandate.

Larrie Dawkins, MBA, CMPE, chief compliance officer, Wake Forest University Health Sciences, Winston Salem, NC; and Robert Tennant, MA, senior policy advisor, Medical Group Management Association, Washington, DC

Dawkins and Tennant began with a brief overview of the HIPAA and code sets, which was portrayed as the following: • Final HIPAA TCA rule (2000) adopted:

o ICD-9-CM vols. 1 and 2 as national standard for diagnoses codes

o ICD-9-CM vol. 3 as national standard for inpatient hospital procedure codes

o AMA’s CPT-4 as national standard for hospital outpatient and professional procedure codes

o TCS final rule noted ICD-10 for study as next code update

• Final TCS rule (2009) adopted 5010 version of the standards

• Final ICD-10 rule (2009) adopted

o ICD-10-CM for inpatient and outpatient diagnoses

o ICD-10-PCS for inpatient procedures

o Retained CPT-4 for outpatient procedures

The presenters then moved to a quick glance at the HHS compliance timetables, explaining that the 5010 rule has a compliance date of January 1, 2012; and ICD-10 has a compliance date of October 1, 2013.

The 5010 change in “massive,” they explained, adding that “it is the next generation version of the nine HIPAA electronic transactions,” and it consists of more than 850 complex changes. In fact, the “implementation guide for one of the HIPAA electronic transactions (health care claim) has 700 pages, and every page has a change from the 4010 implementation guide.”

“Why move to the X12 version of 5010?” they asked. Because current transactions are more than 6 years old, more than 1,000 industry have requested changes via DSMO, many more industry have requested changes via ASC X12, it addresses problems encountered with 4010A1, it includes improvements to implementation instructions and more consistent implementations by trading partners, some problems prevented implementation, and it should reduce Companion Guide TP requirements.

Proving that ICD-10 is more complex than ICD-9, the speakers explained that ICD-9 includes 13,000 diagnosis codes, compared with 68,000 for ICD-10; and ICD-9 includes 11,000 procedure codes, compared with 87,000 for ICD-10. Still not convinced? ICD-9-CM has 3-5 digits, whereas ICD-10-CM has 3-7 digits. For chapters 1-17 of ICD-9-CM, all characters are numeric, and for all supplemental chapter, the first digit is alpha (E or V) and the remainder are numeric. For ICD-10-CM, digit 1 is alpha (A-Z, not case sensitive), digit 2 is numeric, digit 3 is alpha (not case sensitive) or numeric, and digits 4-7 are alpha (not case sensitive) or numeric.

An example of the complexity is clearly seen in a example show during the presentation; for a sprained or strained ankle, there are 4 ICD-9 codes, compared with 72 ICD-10 codes—that’s right, 72! Migraine headaches aren’t so bad, with 10 codes compared to 29 codes, respectively.

So, what do you, as a physician, get out of adopting the new coding system? Well, “ICD-10 incorporates much greater specificity and clinical information,” said the speakers, which could result in improved ability to measure healthcare services, increased sensitivity when refining grouping and reimbursement methodologies, enhanced ability to conduct public health surveillance, and decreased need to include supporting documentation with claims. Additionally, the draft definition of “meaningful use” of an EHR (tied to as much as $44,000 in Medicare incentives and $63,750 under Medicaid), contains references to two HIPAA transactions and ICD-10:

o Practices must check patient insurance eligibility utilizing the HIPAA 270/271 transactions

o Practices must submit claims using the HIPAA 837 transaction

o By 2013, practices must be submitting quality data using ICD-10 codes

o By 2015, practices must be submitting quality data using SNOMED

But the benefits come at a cost. These include training of all clinical and administrative users, changes to practice management system and other applications, probable increases in system storage capacity, redesign of forms (eg, superbills), health plan policy/procedure revisions, and the need for more precise physician documentation in many cases, reduced productivity during the learning, curve (historically 3-6 months), the potential need for additional staff, the potential for billing delays due to coding backlogs, and the need for greater coder understanding or anatomy and physiology, explained the speakers.

The estimated costs for making the move to ICD-10 vary; a Rand Study says the conversion will run from $425 million to $1.15 billion, with $5-$40 million in lost productivity per year. BCBSA found the conversion to run from $5.5-$13.5 billion, with $150-$380 million per year in lost productivity. Preparation for the move is critical and should be done early, say the presenters. You can start by creating ICD-10 awareness throughout your practice, tracking regulatory developments, developing and approving capital and multi-year budgets, determining the education needs for your various staff, helping assemble a multi-disciplinary implementation planning team, evaluating the extent of code changes that are specific to your specialty, and starting an initial education process. Next, implement and test any necessary systems changes, perform follow-up assessment of documentation and data capture practices to see if it has improved to an acceptable level, and implement intensive user training.

The preparation must also move outside your practice. “Contact your PMS/billing/EHR vendor” said the speakers, and ask them the following:

o Are you aware of these new government regulations?

o What is your schedule for 5010 and ICD-10 software upgrades/training?

o Will you be upgrading MY version of the software?

o Ask about the EHR/PMS interface

o If not, will I require additional hardware?

Also, “contact you major health plans and ask:”

o When do you anticipate being ready to test the 5010 transactions?

o Will you be utilizing the CMS ICD-10 crosswalks?

o When will you let us know about changes to coverage and payment due to ICD-10?

If you’re not prepared adequately, explained the presenters, you could face decreased coding productivity leading to decreased practice productivity, increased claims rejection, delays in reimbursement and rise in AR days, corporate compliance problems, and an adverse impact on patient care and administrative decision making due to bad data.

“Learn, ask questions, prepare, and make the changes!” concluded the speakers.