By taking time to practice ICD-10 coding now, in collaboration with payers, and to analyze the potential impact of ICD-10 on revenue, hospitals can support a smoother transition.

At a Glance

To ensure a successful transition to ICD-10, hospitals should:

  • Investigate industry guidelines
  • Analyze claims using mapping tools
  • Measure the potential impact on payment
  • Practice ICD-10 coding in collaboration with payers
  • Study cost reduction opportunities

How will the transition to ICD-10 affect hospitals financially? Certainly, hospitals will require significant investments in time, training, and software upgrades to support the move to a new coding system. Many industry organizations have guidelines and resources available to help healthcare professionals map the transition. But for most hospitals, questions about the financial impact of the transition on their organizations remain. 

Hospitals can effectively address these questions—and uncover cost reduction opportunities in the process—by conducting a five-step preliminary assessment. Such an assessment can ensure a hospital will enjoy a smoother transition and will be better able to code accurately in ICD-10 when the compliance deadline arrives on Oct. 1, 2014. 

Investigate Guidelines

The first step in assessing the financial impact of ICD-10 is to investigate conversion guidelines from relevant trade organizations. Because the ICD-10 final rule was published in January 2009, several medical and specialty associations—including the American Health Information Management Association, the American Medical Association, and the Centers for Medicare & Medicaid Services (CMS)—have created conversion timelines and protocols. Hospitals should take advantage of these resources. By following guidelines specifically designed for their own particular needs, hospitals can prioritize efforts and streamline the transition. 

Use Mapping Tools to Analyze Claims

The next step for an ICD-10 steering committee is to gather data about the organization’s 10, 20, or 50 most frequently billed or highest-dollar claims and payment under ICD-9. Once those codes are collected, they should be run through one of the many mapping tools available on the market to develop a crosswalk to the ICD-10 codes. 

For example, CMS offers general equivalence mappings (GEMs) and reimbursement mapping tools. However, these broad databases require extensive customization by each user for accuracy. 

As an example, there is currently a specific code in ICD-9 for esophageal hemorrhage, which is identified as a major complication or comorbidity (MCC). ICD-10 has no such code, so GEMs identifies ICD-10 code K22.8 (other specified diseases of esophagus) as the map for the esophageal hemorrhage ICD-9 code. Unfortunately, this mapping results in the loss of the MCC and an assignment to a lower-weighted Medicare severity-adjusted DRG (MS-DRG). The only way to maintain the MCC grouping is to choose a different ICD-10 code, such as K22.11 (esophageal ulcer with bleeding). This is just one example of how the GEMs map would need to be customized. Other commercial mapping tools, with simpler customization functions, also are available to convert relevant codes more accurately to ICD-10. More tips for successful mapping are offered in the sidebar below.

Measure Impact on Payment

Once mapping conversions are complete, organizations can visualize how and where payment is likely to decline or increase once they transition from ICD-9 to ICD-10. They can see, for instance, how the code conversion will affect DRGs for diagnoses that are common in their patient populations. For example, ICD-10-CM now requires more detailed documentation for pacemaker implants on the insertion of the electrical leads. Improper documentation could now potentially result in decreased payments. 

Practice ICD-10 Coding in Collaboration with Payers 

Health insurers will soon begin allowing organizations to run ICD-10 tests or even dual code with real claims. The impact of the conversion will vary, depending on an organization’s patient population and the types of services offered. 

Providers should find out when their commercial health plans and government payers will start to accept ICD-10 codes, even if it is in a simulated environment. Already, many commercial payers are conducting internal mapping initiatives to determine how each diagnosis code and DRG will affect expenses. Most payers are likely to start external testing with ICD-10 in the first half of 2013, according to results of a March 2012 survey released by the Workgroup for Electronic Data Interchange. 

Despite the compliance delay and the likelihood that different payers will have different timelines, the fourth step in analyzing the financial impact of ICD-10 is to practice dual coding with actual claims in real time. Although it may be time-consuming, running simulations with each contracted health plan will help providers make a more accurate assessment of the financial impact of the conversion.

For example, for partial hip replacement operations, ICD-10 now requires additional details about which side the surgery occurs on, the part of the joint involved, and the type of material placed back in the joint. These specifics could affect payment. Depending on the procedure frequency, the difference in payment could have a significant effect on an organization’s bottom line. 

Even in a test environment with only one payer, submitting actual claims using real clinical documentation can be invaluable in judging the accuracy of test mappings. Using real claims also can help providers determine whether they have adequate documentation to code accurately in ICD-10 and identify areas where greater documentation specificity will be required. Using real diagnosis and procedure codes is the best training for providers, coding staff, and IT employees because it allows them to see how their actions directly affect payment.

Study Cost Reduction Opportunities

The fifth and final step in determining the financial impact of ICD-10 is to identify ways to mitigate the risk of increased costs and revenue losses due to the conversion. 

Training is one of the largest expenses associated with ICD-10 conversion. Training costs include not only the actual instruction but also the disruption to daily operations. To help reduce that expense and minimize interruptions, organizations should focus their training on the most frequently submitted diagnoses and DRGs. Rare conditions and complex coding scenarios will present themselves once an organization becomes ICD-10 native, but the best use of training time is to help ensure accurate documentation and charges for the highest-revenue-generating conditions and DRGs. Additional training tips are provided in the sidebar below.

After determining the payment impact of ICD-10, the organization can mitigate financial losses by renegotiating payer contracts based on anticipated changes. A provider could renegotiate contract provisions regarding hip operations using certain materials, for example, to make it a covered service, or perhaps agree to a different payment on another code. Providers should keep in mind that payers also will need to renegotiate contracts based on the conversion to ICD-10.

Making the Transition Easier

The ICD-10 conversion looms closer by the day. Unlike some other mandates and industry standards, the ICD-10 transition affects the entire healthcare organization, including third-party vendors and payers. Before organizations can begin ICD-10 training and implementation, they will need to understand the financial impact of the conversion. Change is always difficult, but following these five steps can help ease the path to an effective and successful transition.

Brian Levy, MD, is senior vice president and chief medical officer, Health Language, Inc., Denver, and a practicing board-certified internist ( 

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Tips for Successful Mapping 

Mapping is a gateway to understanding the financial impact of the ICD-10 transition. Following are tips to improve chances of success when mapping ICD-9 to ICD-10 codes. 

Exercise care with respect to disease registries used for quality reporting processes and research. The ability to gauge quality improvements, such as reductions in hospital-acquired infections or improved treatment of patients with chronic conditions (such as diabetes or asthma), may be greatly enhanced after conversion, but historical ICD-9 claims will have to be converted to measure improvement accurately.

Determine whether legacy coding, billing, and electronic health record (EHR) systems and EHR decision support tools should be upgraded. For example, if a hospital’s EHR triggers a provider alert to arrange for a home health aide for patients with uncontrolled diabetes, those alert rules will need to be recreated under ICD-10. 

Convert older radiology and clinical laboratory legacy systems that deliver results in ICD-9 data. Such conversions will better support coding compliance. 

Revise and reprint outpatient and physician practice superbills. This effort will accommodate the additional, more specific ICD-10 diagnoses.
Customize selected diagnoses, as needed, to determine the impact on payment. Mapping can point coders and providers in many different directions. For example, codes for asthma cannot be mapped easily because they are coded based on different clinical criteria under ICD-10. 

Don’t attempt to apply mapping across entire organizations using the same methods. Mapping is context-specific. For example, the process to convert superbills may not be the same as mapping for quality reporting or disease registries. 

Help staff navigate complicated mappings. In many cases, codes do not map neatly. Inpatient rehabilitation provides a case in point. Currently, rehabilitation claims may be submitted with “V” codes as the primary diagnosis—for example, V57.3, speech-language therapy—and they are grouped to a rehabilitation MS-DRG. However, no ICD-10 codes duplicate the V57 series of ICD-9 codes. All physical rehabilitation codes in ICD-9 map to a general code in ICD-10 for “other specified aftercare” (Z51.89). Simply mapping the current V57 codes over to ICD-10 will result in a shift to an aftercare MS-DRG and a potential financial loss. In this case, if a rehabilitation ICD-10 procedure code is included on the ICD-10 claim, the MS-DRG assignment remains the same and payment will not change.

Keep in mind that some organizations will not need to conduct an enterprisewide mapping initiative. The end goal is to become ICD-10 native; mapping may be needed only for the highest revenue-generating diagnoses or DRGs.

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ICD-10 Conversion Training Tips

Hospitals should take the following actions to ensure all organizational stakeholders are well trained on their roles and responsibilities related to the ICD-10 conversion. 

To make training most relevant and promote employee engagement, start training with a leader, or leaders, in each department. Ask those leaders to train other affected employees. 

During testing, conduct documentation assessments with coders to ensure they have adequate information from physicians to submit claims using ICD-10. If not, provide physicians with additional training to
document with enough detail for coders to select the appropriate, highest-specificity ICD-10 codes. 

Consider training physicians in the use of tools designed to assist them at the point of care. Such tools include, for example, the provider-friendly terminology (PFT) content set within an electronic health record at the point of care, which is designed to help physicians capture the necessary clinical information. A provider treating a fracture, for instance, might be asked to specify “malunion” or “nonunion,” where applicable. Suggest that providers or coders search familiar, colloquial terms and phrases, and use the PFT to help them code those terms in ICD-9 or ICD-10. 

Show physicians and other clinical staff examples of the revenue lost due to insufficient documentation. Illustrate how a few additional pieces of documentation can boost the bottom line for the organization.

Publication Date: Friday, March 01, 2013

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