Caroline Piselli
Kathleen Wall
Anne Boucher

Early planning for ICD-10, which will become the new, national coding standard in October 2013, will help organizations identify opportunities and challenges that could lead to a difficult and costly transition.

At a Glance

To prepare for ICD-10, a healthcare organization should:

  • Appoint a cross-functional ICD-10 steering committee, with representation from finance and other key areas
  • Evaluate where ICD-9-coded data are generatedand how those data elements are used
  • Assess IT readiness and gaps for ICD-10
  • Initiate staff education, beginning with senior management

The evolution of health care has never been so rapid-so much so that changes in the way health care is financed and delivered have begun to outpace our ability to document, track, and share information in improving both care and outcomes and ensuring fair and accurate payment.

Now that the U.S. Department of Health and Human Services has published a final rule establishing ICD-10 as the new national coding standard, hospitals and other providers will be in a better position to meet the growing information demands of today's complex patient care environment. According to the Centers for Medicare & Medicaid Services (CMS), ICD-10 will drive healthcare improvement by helping to ensure accurate identification and payment of new procedures and by allowing for a better understanding of health conditions and outcomes. These benefits can lead to improved quality measures, patient safety, disease management, and more effective disease monitoring and reporting worldwide.

The ICD-10 implementation date, initially proposed for October 2011, has been extended to Oct. 1, 2013, to give providers, payers, and vendors more time to prepare (see exhibit 1).

Exhibit 1

exhibit-1-A New Language for Health Care

But if the new diagnosis and procedure code sets won't be implemented in the United States for another four years, why be concerned now?

ICD-10 is much more than just another coding update. It will affect every hospital information system and every departmental function that currently uses or generates ICD-9 codes. In addition, ICD-10's multiaxial design will require extensive early education and real-world application by physicians, coders, and nurse case managers, among other staff members. Early planning will help organizations identify potential challenges that could cause a difficult and costly transition.

Hospitals should begin preparing now for ICD-10, with finance professionals taking the lead in addressing the new coding system's implications for timely coding and reimbursement, IT, clinical quality improvement, payer integration, staffing and training, and vendor relationships.

A Common, Worldwide Language

To understand the many ways ICD-10 will improve information capture, it's important to understand the makeup of an ICD-10 code. The new classification system is structured differently from ICD-9-CM in two ways: Not only are the codes new, but also the diagnosis and procedure coding systems are each separate and autonomous systems, with their own structures and features. ICD-10-CM, used for coding diagnoses, is similar to ICD-9-CM. In contrast, the ICD-10 Procedure Coding System, or ICD-10-PCS, used for inpatient procedure coding, is an entirely new system and demands far greater documentation specificity by physicians than ICD-9.

The sidebar below describes one ICD-9-CM documentation scenario and how it will differ in ICD-10. In this example, groups of code components-or code building blocks-are used to construct an ICD-10 procedure code, making the finished code more precise and easier to expand with changes in medical practice.

Assessment: Understanding the Impact

ICD-10 will affect many work areas across hospitals and healthcare organizations, making it essential that key departments participate in and provide input to the planning process. Begin by appointing and educating a cross-functional ICD-10 steering committee that spans internal and external data creation processes, with representation from patient financial services, revenue cycle, health information management (HIM), decision support, IT, and quality and case management, as well as the CMO and CFO.

The steering committee should start by evaluating where ICD-9-coded data are generated throughout your facility-admissions, radiology, pathology, and physician billing departments, for example-and how those data are used. The committee should develop a process map of the flow of data across functions and departments, from the time coded data are created or enter the facility to final billing and reconciliation of remittance advice. The committee also should survey how and where coded data are generated to meet external reporting requirements. By creating a visual map of data flow, the steering committee will be able to:

  • Identify every department system that currently holds ICD-9 codes, or paper process that records codes, and requires updating to hold or process ICD-10 codes
  • Understand where coded data must be interfaced to ensure information flow across departments
  • Determine which staff members will require ICD-10 training because they assign codes or use codes in their daily work

Assess IT readiness. Challenges to a healthcare organization's information systems will arise from differences in basic code structure between ICD-9-CM and ICD-10 procedure codes. Each system that currently holds an ICD-9-CM three- to five-digit numeric procedure code will need to accommodate a seven-character, alphanumeric ICD-10 procedure code. Updating systems to hold new codes and move them through the various interfaces to the UB-04, department databases, and decision support systems may be a critical issue for some facilities. A clear understanding of how the new codes will be passing through multiple interfaces well in advance of ICD-10 implementation ensures that no last-minute manual workaround will be required to drop a bill.

The organization's IT department should focus first on updating software and systems that support patient care, then focus on those that support coding, billing, and claims. Also important are systems that hold and process data used to fulfill pay-for-performance requirements, such as present-on-admission and hospital-acquired condition tracking, and systems that generate data for external quality reporting. IT staff should investigate and prepare for the possibility that dual or mapped systems may be required for a number of functions during the transition. IT departments also should consider whether additional IT resources are needed to handle the extra workload as systems are converted.

ICD-10 may present timing challenges for IT vendors. The largest vendors in health care have a wide range of hospital clients, all needing system and software updates before the 2013 implementation date. Installing software updates for so many facilities across the healthcare industry presents challenges for both vendors and their clients. As part of the overall facility assessment, an organization's ICD-10 steering committee should survey its current system and software vendors. The committee should consider each vendor's ability to ensure a smooth transition to ICD-10 when negotiating contract or license renewals. The following questions should be asked as part of the evaluation:

  • Can the vendor demonstrate any programs or products to help the IT department and steering committee assess vendor implementation plans and readiness?
  • Will the vendor's system be able to accommodate both ICD-9 and ICD-10 codes during the transition period?
  • Will the vendor help educate users and make the transition easier for them?
  •  Will the vendor be able to provide test-ready software products well in advance of planned implementation?

The fourth question is especially critical in testing the integration among coding areas, patient financial services, and quality.

Assess documentation and coding gaps. Complete and accurate physician documentation is a prerequisite for full and accurate payment, especially since the implementation of Medicare Severity DRGs. Documentation also influences a hospital's case mix index, determines performance under value-based purchasing programs, and may affect the hospital's published quality scores.

ICD-10 will make the process of documenting the patient experience even more critical. As described above, ICD-10 reduces the many general, unspecified codes found in ICD-9-CM, and it therefore demands a much greater level of documentation specificity from the physician. Coders can code only from the documentation; to do otherwise is a compliance violation. By partnering with physicians to obtain accurate documentation, coders can reduce the number of physician queries, which could cause coding backlogs, delay the claims process, and increase accounts receivable days.
If the organization's physicians are already challenged to fully document patient acuity for MS-DRGs, then evaluating the quality of physician documentation-and assessing the need for physician/ancillary department education and practical training-should be a priority for the ICD-10 steering committee.

As a first step, the committee should determine the facility's current top 50 diagnoses and highlight how many include "unspecified" ICD-9 codes, such as 285.9 (Anemia, Unspecified), 414.00 (Coronary Artery Disease of Unspecified Type of Vessel), or 428.0 (Congestive Heart Failure, Unspecified). Physician education should focus on these areas first, because poor documentation for high-volume services represents the greatest potential risk to revenue. Specific procedures, for example, can be selected for a focused concurrent review and physician education.

Hospitals should also project their facility's performance under ICD-10 using industry metrics (developed and available from many healthcare industry vendors and consulting firms) and conversion tools, which are discussed later in this article. This kind of analysis can uncover any internal obstacles to improvement and identify documentation improvement opportunities related to complication/comorbidity (CC) capture rates, principal diagnosis alternatives, and code specificity.

Many healthcare organizations adopted a concurrent documentation review model when transitioning to MS-DRGs. Organizations that have not made this move should consider doing so before 2013. Concurrent documentation ensures that review and assignment of a working principal diagnosis code occur concurrently with clinical evaluation. Physicians can be queried and educated about inconsistencies during the inpatient stay, thereby helping to ensure that each patient's complete clinical status, including all secondary diagnoses and complications, is documented and accurately reflected in the medical record-and, thus, more precisely coded and billed.

Assess payer integration issues. All providers-whether hospitals, physician offices, or subacute care facilities-should develop a plan for collaborating with fiscal intermediaries (FIs) and payers well in advance of ICD-10 implementation to ensure the uninterrupted flow of revenue. Early in the ICD-10 planning process, FIs and payer project managers should be contacted to assess the need for system upgrades and to establish timelines for data integration testing.

Key discussion points for both parties should include:

  • Overall goals and strategies for achieving on-time payer readiness as opposed to phased-in readiness
  • Integrated plan for updating code sets
  • Integrated plan for system updates, upgrades, and changes
  • Integrated plan for modeling the implementation using test data to identify payment issues
  • Level of effort required for each side to achieve a smooth transition
  • Validation of information flow between the provider and FI/payer

Questions to ask when discussing validation of information flow include:

  • Who will validate data in terms of how much information was sent and how much was received?
  • What was the dollar amount of revenue expected?
  • What was sent?
  • What was received?

Education: Not Just for Coders

Upon completing a review of the facility's ICD-10 readiness, the organization should initiate staff education, beginning with senior management. Providing management with the results of the steering committee's assessment will enable execution of identified opportunities and allows management to delineate the processes and systems affected by the transition, identify the extent of education required, and understand what the results mean for operational planning and budgets. This communication will also serve to identify management-related responsibilities and action items within an enterprisewide program plan.

In designing an ICD-10 education effort, remember that coding is performed across the organization, not solely in the HIM department and not always by coders. Staff working in radiology, the admissions department, and physician billing areas, for example, may assign working diagnosis codes as part of their typical day-to-day responsibilities. Information gleaned from a facilitywide assessment will make it possible to design targeted education programs for critical areas.

The HIM department is an organization's expert source on ICD-10 principles. HIM professionals have been anticipating the new code sets for a number of years and have access to a wide range of educational resources through organizations such as the American Health Information Management Association and industry consulting firms. Organizations should consider appointing a central training coordinator from HIM-perhaps the coding manager or data quality manager-to plan a comprehensive campaign for institutionwide education.

Initial training will need to be at a high level to help those involved in planning fully understand the opportunities as well as the best approach for organizationwide implementation. Updated education will enable the transition. More detailed training and practical application sessions should then be scheduled three to 12 months before implementation. Another option is to outsource training if it is determined extra support is required to accomplish all of the facilitywide changes in a timely manner or to ensure successful change management given the size and scope of the transition.

It is never too early to begin physician education, especially in high-volume specialties. Physician training should be conducted according to service lines and address frequently occurring issues identified in your facility's record review. Providing examples of frequently omitted or unspecified documentation-and then demonstrating the impact not just on payment, but also on the physician's severity and risk of mortality scores, which are often reported publicly and within peer reviews-is crucial to engaging the medical staff.

Coder education programs should focus on the basic structure, organization, and unique features of ICD-10-CM and ICD-10-PCS. Coding professionals will need a solid grounding in anatomy and physiology, medical terminology, and pharmacology to successfully code inpatient procedures under the new guidelines. Coders should be afforded practice time with different coding scenarios and time to test updated versions of ICD-10-ready coding software. Coder education should be carefully paced over the next four years, with the most intensive training scheduled in the last six months before implementation to ensure retention of new skills. Expert ICD-9 coders should be maintained while a force of expert ICD-10 coders is created for those directly involved with documentation, coding, and billing.

During the "go-live" and postimplementation phases, quality checks should be performed continuously on coded data. Coder productivity and coding backlogs should be monitored to identify areas for documentation improvement and to minimize physician queries after the patient is discharged. Finally, staff should be kept advised of progress throughout the education phase (and beyond) to alleviate anxiety and address questions. Advance preparation of coding staff in particular will reduce concerns and build confidence. 

Capitalize on ICD-10 Opportunities

Healthcare facilities, vendors, and payers all have a common interest in determining best practices for working through the ICD-10 conversion process across coding, revenue cycle, quality, and reporting functions. Organizations that develop a detailed plan will not only minimize the financial impact, but also will be able to realize important benefits from the new coding system.

Coded data are essential for determining an organization's case mix index and financial payments. Equally important, they are the foundation for reporting healthcare analytics and quality outcomes measures such as complexity, mortality, complications, "never events," and more. ICD-10 will make it possible to dig deeper into these data. The new system will bring much greater accuracy and precision to an organization's quality and financial benchmarks, as well as to data used to project areas of risk, identify trends, and establish growth goals. ICD-10 will enable better strategic thinking and portfolio management by providing the detailed data facilities need to justify resources, evaluate market share, negotiate managed care contracts, streamline supply management, and evaluate profitability of services.

The coding changes driven by the shift to ICD-10 will touch every aspect of hospital operations and patient care, so the transition should not be taken lightly. Initially, the challenges may be more apparent than the opportunities. Healthcare organizations whose leaders plan carefully and strategically will be able to avert implementation problems and capitalize on the opportunity inherent in ICD-10. With careful planning, hospitals can come through this transition well-positioned to manage the reimbursement and regulatory challenges of the next decade.

Caroline Piselli, RN, FACHE, is 3M ICD-10/P4P global program manager, 3M Health Information Systems, Wallingford, Conn. (

Kathleen Wall, RHIA, is clinical documentation system specialist, 3M Health Information Systems, Atlanta (

Anne Boucher is clinical research systems content manager, 3M Health Information Systems, Wallingford, Conn. (


Example of Physician Documentation

ICD-10-PCS reduces the many general, unspecified codes found in
ICD-9-CM, and therefore requires physicians to document with more specificity. When documenting in ICD-9-CM, physicians often use words such as excision, resection, or extraction interchangeably. With ICD-10, each of these words has a precise meaning that correlates with a specific code. Change the word and you change the code-and ultimately the reimbursement.

ICD-10 also requires more documentation detail. Recording "excisional debridement of skin and subcutaneous tissue" is an acceptable way to document debridement in ICD-9-CM, but it is imprecise for ICD-10-PCS. Instead, the physician must describe:

  • The general system of the body that was involved
  • The precise action or approach taken
  • The specific body site where the action was performed
  • Whether any device was used or implanted during the procedure

Publication Date: Friday, January 01, 2010

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