ICD-10: Apocalypse or Advantage?

mayan-calendarWith humanity coming up fast on 2012, the media is counting down to this mysterious — some even call it apocalyptic — date that ancient Mayan societies were anticipating thousands of years ago.  However, the really interesting date in healthcare will happen one year earlier. In 2011, per the mandate of Senate Bill 628, the United States will move from the ICD-9 coding system to ICD-10, a much more complex scheme of classifying diseases that reflects recent advances in disease detection and treatment via biomedical informatics, genetic research and international data-sharing. For healthcare payers and providers that have used the ICD-9 coding system for submitting and paying healthcare claims for the last 30 years, it could be apocalyptic without proper planning and execution.  Conservative estimates of the cost of switching to ICD-10 are 1.5 to 3 billion dollars to the healthcare industry as a whole and nearly $70,000 for each doctor’s practice.

Since 1900, regulators of the U.S. health care system have endeavored to give care providers a systematic way to classify diseases so that care processes could be standardized and appropriate payments made. Like many of the world’s developed health care systems, the United States follows the World Health Organization’s (WHO) International Statistical Classification of Diseases and Related Health Problems (ICD) code standard that is typically used internationally to classify morbidity and mortality data for vital health statistics tracking and in the U.S. for health insurance claim reimbursement. In 2011, technically, healthcare providers and payers will be moving from ICD-9-CM to ICD-10-CM and ICD-10-PCS.  To meet this federal mandate, it will be essential that information systems used by U.S. health plans, physicians and hospitals, ambulatory providers and allied health professionals also become ICD-10 compliant. The scale of this effort for healthcare IT professionals could rival the Y2K problem and needs immediate planning.

The challenge is that the U.S. adoption of ICD-10 will undoubtedly require a major overhaul of the nation’s medical coding system because the current ICD-9 codes are deeply imbedded as part of the coding, reporting and reimbursement analysis performed today. In everyday terms, the ICD-9 codes were placed in the middle of a room and healthcare IT systems were built around them. It will require a massive wave of system reviews, new medical coding or extensive updates to existing software, and changes to many system interfaces. Because of the complex structure of ICD-10 codes, implementing and testing the changes in Electronic Medical Records (EMRs), billing systems, reporting packages, decision and analytical systems will require more effort than simply testing data fields – it will involve installing new code sets, training coders, re-mapping interfaces and recreating reports/extracts used by all constituents who access diagnosis codes. In short, ICD-10 implementation has the potential to be so invasive that it could touch nearly all operational systems and procedures of the core payer administration process and the provider revenue cycle.

A small percentage of healthcare organizations, maybe 10 to 15 percent, will use ICD-10 compliance as a way to gain competitive advantage – to further their market agendas, business models and clinical capabilities. By making use of the new code set, these innovators will seek to derive strategic value from the remediation effort instead of procrastinating or trying to avoid the costs. An example will be healthcare plans that seek to manage costs at a more granular level and implement pay for performance programs for their healthcare providers. In addition, ICD-10 offers an opportunity to develop new business partnerships, create new care procedures, and change their business models to grow overall revenue streams. Healthcare organizations looking for these new business opportunities will employ ICD-10 as a marketing differentiator to create a more competitive market position.

There are three key areas for healthcare organizations wanting to convert regulatory compliance into strategic advantage with ICD-10 remediation:

  1. Information and Data Opportunities – Healthcare entities that are early adopters of ICD-10 will be in a position to partner with their peers and constituents to improve data capture, cleansing and analytics. This could lead to the development of advanced analytical capabilities such as physician score cards, insightful drug and pharmaceutical research, and improved disease and medical management support programs, all of which create competitive advantage.
  2. Personal Health Records Opportunities – Using ICD-10 codes, innovative healthcare entities will have access to information at a level of detail never before available, making regional and personal health records (PHRs) more achievable for the provider and member communities. Organizations that align themselves appropriately can provide a service that will differentiate them in the marketplace.
  3. Clinical Documentation Excellence Program – Developing and implementing a Clinical Documentation Excellence (CDE) program is a critical component of organizational preparedness to respond to future regulatory changes because there could be an ICD-11 on the horizon.

Healthcare organizations need to understand the financial impact that ICD-10 will have on their bottom line and begin the operational readiness assessments, gap analyses and process improvement plans to facilitate accurate and appropriate reimbursement. Without action, a healthcare organization can expect to endure “data fog” as the industry moves through the transition from one code set to another. Now is the time to choose to gain the advantage or procrastinate on the coming code apocalypse.

One thought on “ICD-10: Apocalypse or Advantage?

  1. Pingback: Picis Exchange Global Customer Conference – “It’s All About the Data” « Edgewater Technology Weblog

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