Ann Zeisset
Sue Bowman

Although the deadline for healthcare organizations to convert to ICD-10 recently was extended by one year, staying the course for ICD-10 preparations is critical for hospitals and health systems.

At a Glance

Hospitals and health systems should consider seven strategies for preparing for the conversion from ICD-9-CM to ICD-10-CM/PCS:

  • Form a project planning team.
  • Assess the range of impact on each department and on productivity, revenue, and resources.
  • Perform a gap analysis.
  • Analyze data.
  • Develop a training strategy specific to coding professionals and heavy data users.
  • Work to improve documentation.
  • Communicate with vendors regarding their plans for the transition to ICD-10.

The conversion to ICD-10 will be a defining moment for U.S. healthcare organizations. Because coded data are much more widely used now than when the United States transitioned to ICD-9 35 years ago, the scope and complexity of this transition will be far greater, requiring extensive changes that will affect numerous systems, processes, and people. Every business process associated with the capture, manipulation, transfer, usage, submission, and reporting of ICD-9 codes will be affected. Implementation will impact almost every area of the organization, from finance to clinical care to operations.

Even with the extension of the deadline for ICD-10 to Oct. 1, 2014, hospitals and health systems can expect to face a number of implementation issues and challenges in the move to the new coding system. Healthcare organizations should begin acting now to prepare for ICD-10 implementation and its impact on staff, resources, and revenue.

Implementation Issues and Challenges

ICD-10 will provide healthcare organizations with greater clinical detail and specificity, more up-to-date terminology, improved capture of advancements in medical technology, and a more flexible structure for coding. These improvements will result in better data for:

  • Measuring the quality, safety, and efficacy of healthcare services
  • Assessing patient outcomes
  • Comparing cost and efficacy of treatment alternatives
  • Monitoring resource and service utilization
  • Making health policy decisions
  • Substantiating medical necessity
  • Risk and severity adjustment
  • Conducting research
  • Public health surveillance
  • Refining reimbursement systems or adopting new payment methodologies
  • Meeting the demands of an increasingly global and electronic healthcare environment

Greater detail and specificity in code assignment will facilitate more accurate collection of outcomes data by enhancing the level of precision with which diagnoses can be linked to outcomes. The use of ICD-10 also has the potential to reduce fraud and abuse and improve fraud detection capabilities. And the expanded clinical detail and standardized terminology of ICD-10 will reduce the potential for coding ambiguity and misinterpretation, thereby improving coding accuracy as well as the organization's ability to effectively audit claims.

But the transition to ICD-10 will not be easy for hospitals and health systems, and its impact will be felt by nearly every department in a healthcare organization. Several action steps to ease the transition should be considered.

Form a project planning team. This team should identify the goals for ICD-10 conversion and develop a project plan that identifies each task and objective, with responsibilities clearly delineated and due dates for completion established. Members of this team should include senior leaders and representatives from the medical staff, finance, IT, health information management, and coding.

It is important to prioritize all parallel projects to ICD-10, both those that are related to the conversion and those that are not. Team members also should coordinate organizationwide education on ICD-10 for all key stakeholders.

Assess the impact. Healthcare organizations should conduct an impact assessment to identify the range of impact on every department. The assessment should examine the ways the move to ICD-10 will affect operations, documentation, work flow, and internal and external reporting processes. It should include a thorough inventory of databases, systems, and interfaces currently using ICD-9 codes. Ongoing communication with vendors regarding their transition plans also is needed.

Payment and budgetary considerations require careful planning. When developing the budget for this project, costs to consider include:

  • System modifications
  • Hardware
  • Maintenance fee upgrades
  • Training
  • Outsourcing or consultant fees
  • Temporary staffing
  • Data conversion
  • Report redesign and reprinting
  • Additional tools or resources
  • Systems testing

The largest costs to the organization will be training and systems modification costs.

Perform a gap analysis. After the initial planning strategy phase is complete, the information collected from the impact assessment should be used to perform a gap analysis to identify and rank strategy to initiate resolutions.

Analyze data. It is necessary to determine how the transition will impact longitudinal data. Will legacy data be converted, and if so, what mapping strategies will be utilized? If coded data will be mapped between ICD-9 and ICD-10 using the general equivalence mappings (GEMs), will application-specific mappings also need to be developed?

The organization also should determine which data will be linked using mapping applications and which data will be maintained separately according to the source code set. Those involved with data conversion should be educated on the GEMs. It also is important to identify how various payers will map their data to determine appropriate interpretation during the transition in payment policies and provider contracts.

Evaluate the potential impact on payment. This step includes identifying potential DRG shifts and case mix index changes. The organization should review information available through the Medicare Severity-DRG mapping project administered by the Centers for Medicare & Medicaid Services and evaluate potential changes in payment that could result from implementation of ICD-10 by using the information to audit current DRGs and mapping them to ICD-10 DRGs. Dual coding during this timeframe is one way to determine the potential impact while providing opportunities for coding professionals to become familiar with and competent in coding in ICD-10.

The organization should actively correspond with payers concerning possible revisions in payment schedules and policies, paying careful attention to their conversion policies, and keeping in mind that the enhanced specificity of the ICD-10 codes can have a positive effect on payment. The organization also should measure the impact on payment against efforts to improve clinical documentation.

Work to improve documentation. The organization should understand the level of detail and quality of medical record documentation required for ICD-10 and develop strategies for improvement. To this end, it should perform an audit of medical records-selecting high-volume, high-risk, problem-prone medical and surgical cases containing a cross section of physician documentation-and identify any documentation that would be deficient for coding in ICD-10. The organization then should collaborate with physicians on ways to improve documentation. This is a critical component of preparing for ICD-10. Waiting until ICD-10 has been implemented to identify instances where documentation is deficient will have disastrous results for the organization.

The level of detail in ICD-10 is greater than in ICD-9, and guidelines for documentation will change. For example, in coding injuries in ICD-10, documentation must indicate whether the care being received is initial treatment, subsequent treatment, or sequela treatment of the injury. If subsequent care (such as aftercare or rehabilitative care) is being provided, identification of the type of healing is required to code fractures.

Moreover, when coding procedures in ICD-10, each character provides specificity. It is necessary to identify the intent of the procedure to assign the value for the root operation. For example, the excision of a complete body part is the root operation "resection," while excision of a portion of a body part codes to the root operation "excision." The body part values are very specific, hence requiring complete documentation. For example, to code procedures on the carotid artery, documentation needs to be provided if the common, internal, or external carotid is involved.

Develop a training strategy specific to coding professionals and heavy data users. This more intense training should consist of education on the ICD-10 code sets and guidelines, characteristics of both code sets, definitions in ICD-10-PCS, the biomedical sciences and pharmacology, data comparability issues, quality reporting, and the GEMs and their role in the transition process. After this introductory and preparatory training, intense, "hands-on" coder training should be provided. It is generally suggested that this level of training be provided close to the implementation date-perhaps six to nine months prior. If dual coding in advance of the ICD-10 implementation date is being considered, the training timeline should be adjusted.

Careful planning and implementation of an effective training strategy are critical to a successful transition, reducing the potential for decreased productivity and accuracy in coding. Many implementation variables can affect coding productivity, including:

  • The amount and level of preparation
  • Extent of education and credentials
  • Coding experience
  • Knowledge of anatomy and pathophysiology
  • Extent of ICD-10 training
  • Quality of medical record documentation
  • Organizational size and complexity

In anticipation of some decrease in coding accuracy and productivity, certain steps can be taken to minimize the impact. These might include:

  • Eliminating coding backlogs prior to ICD-10 implementation
  • Using outsourced coding personnel to assist with workload during the initial period after ICD-10 implementation
  • Prioritizing medical records to be coded
  • Providing coding staff with adequate ICD-10 education and providing refresher training immediately prior to the compliance date to improve confidence levels and minimize a decline in productivity
  • Assessing medical record documentation quality and implementing any necessary documentation improvement strategies prior to ICD-10 implementation
  • Employing electronic tools to support the coding process (e.g., tools to promote complete and accurate documentation, computer-assisted coding technology)

Consequences of Inadequate Preparation

A smooth, successful transition to ICD-10 by the compliance date-no matter what date is ultimately chosen-requires careful, thoughtful planning and preparation. Taking shortcuts or putting in only minimal effort not only lessens the potential for full realization of the benefits of ICD-10, but also could lead to higher costs down the road. Organizations planning their ICD-10 implementation strategy carefully and thoroughly can expect a smoother transition and earlier realization of benefits.

Risks of inadequate preparation include an insufficient and/or a poorly trained coder workforce, decreased coding productivity, increased coding errors, inadequate medical record documentation to support ICD-10 codes, excessive use of nonspecific codes, coding backlogs, a negative impact on revenue and/or quality ratings, an increase in claims rejections and denials, an increase in accounts receivable (A/R), improper claims payment, compliance issues, and decisions based on inaccurate data.

Although some degree of risk is unavoidable in a project this large, many risks can be mitigated through proper planning and preparation. For example, as coding professionals become familiar with using a new coding system, there will undoubtedly be a temporary decline in accuracy and productivity. Decreased coding accuracy can have far-reaching consequences, such as a negative impact on the organization's quality rating, revenue, and claims rejection and denial rates. It can also lead to improper claims payment and fraud and abuse allegations. But the length and severity of the adverse impact that ICD-10 implementation will have on both accuracy and productivity can be reduced by ensuring that coding staff receive the right type and amount of training, at the right time, and by providing targeted, focused training that addresses identified areas of weakness.

The introduction of computer-assisted coding technologies also can improve coding accuracy and productivity. Coding backlogs can be prevented or reduced by planning now for any additional staffing needs that will be required for the conversion. Monitoring of coding accuracy and productivity after implementation can identify the need for additional training before problems become out of control.

Assessing the quality of medical record documentation and implementing appropriate clinical documentation improvement strategies in advance can reduce the number of physician queries generated by coding professionals. Physician queries prompted by missing or ambiguous clinical documentation slow coders' efforts, decreasing productivity and increasing days in A/R. Use of documentation prompts in the electronic health record system can improve the quality of documentation, reduce physician queries, and improve coding accuracy.

The Time to Prepare Is Now

Regardless of when the final date for ICD-10 compliance will be, it is critical for healthcare organizations to remain vigilant in their transition activities so as not to lose momentum or focus. Experience since publication of the January 2009 final rule adopting ICD-10 has shown that some hospitals and health systems underestimated the complexity and level of effort involved in this transition. Any delay in the compliance date should be viewed as an opportunity to ensure that activities surrounding preparation for implementation, including internal and external testing, are completed properly and on time. All entities covered under the Health Insurance Portability and Accountability Act should be ready to meet the final ICD-10 compliance date to avoid additional costs and claims rejections or denials, as well as to begin reaping the benefits of the new code sets.

Ann Zeisset, RHIT, CCS, CCS-P, is a special consultant on ICD-10, G2N, St. Louis (

Sue Bowman, MJ, RHIA, CCS, is a senior director of coding policy and compliance, American Health Information Management Association, Chicago (


Benefits of the Move to ICD-10  

The improved structure, logic, and specificity associated with ICD-10 will produce a number of benefits for hospitals and health systems:

  • More accurate and precise health information, which will help meet external reporting requirements
  • Fewer coding errors, which will mean fewer erroneous or rejected claims, a reduction in resubmitted claims, and fewer payment errors
  • Less need for submission of medical record documentation to support claims
  • Greater reliance on automation to support the code reporting and claims processing functions, which will lead to increased productivity and fewer staff required for manual processing (by both providers and payers)

The increased specificity of ICD-10 codes will make it easier to compare reported codes with medical record documentation, validate the consistency between diagnosis and procedure codes, check for illogical code combinations, and compare patterns across providers. Fewer coding "gray" areas mean that dishonest healthcare providers will find it more difficult to hide behind ambiguities in code descriptions or rules. The improved logic and increased specificity in ICD-10 will facilitate the development of sophisticated tools for detection of questionable patterns and suspected fraud.

Once coding professionals are comfortable using ICD-10, a code error rate below that of ICD-9 may result because of the more specific code descriptions in both code sets, the more accurate clinical terms in ICD-10, and the improved logic and standardized definitions in ICD-10. The increased specificity of ICD-10 also will facilitate the development of more sophisticated, automated coding tools to assist with proper code selection, thereby improving coding accuracy and compliance with payment policies while reducing the level of manual labor involved in the coding process. Reduction in manual labor will boost coder productivity, decrease labor costs, and alleviate the coder shortage.

Publication Date: Monday, September 03, 2012

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