2010 UBO/UBU Conference Health Budgets & Financial Policy Briefing: How ICD-10 Will Affect Billing Date: 25 March 2010 Time: 0900 – 0950 1

2010 UBO/UBU Conference

Health Budgets & Financial Policy Briefing: How ICD-10 Will Affect

Billing

Date: 25 March 2010

Time: 0900 – 0950

1

2010 UBO/UBU ConferenceTurning Knowledge Into Action

©2010 AHIMA Used by permission

Objectives

Provide a background for the ICD-9-CM conversion and associated HIPAA-related activities

Provide a reference for the technical changes in the classification system – impact on systems

Define the impact on the organization, claims processing, and reimbursement

Look at steps toward conversion/implementation Provide resources

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©2010 AHIMA Used by permission 3

ABCs of ICD-10-CM/PCS – Definitions

AHIMA – American Health Information Management Association

ARRA – American Recovery and Reinvestment Act HITEC/ Title XIII

ASC X12 or X12 – Accredited Standards Committee X12 CM – Clinical Modification CMS – Centers for Medicare and Medicaid Services

(preceded by HCFA) HCFA – Health Care Financing Administration ICD – International Classification of Diseases NCPDP – National Council for Prescription Drug Programs PCS – Procedural Coding System WHO – World Health Organization



ICD-8-CM ICD-9-CM – 1979 Prospective Payment – 1982-1983 ICD-9 ICD-10 – WHO 1990s U.S. Change – or lack thereof U.S. Readiness HIPAA and HIPAA transactions Hearings – studies – hearing 2008 Proposed Rules 2009 Final Rules Today

ABCs of ICD-10-CM/PCS – History

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Code Sets – ICD-9-CM

ICD-9-CM diagnosis coding system– U.S. clinical modification of WHO’s ICD-9– ICD-9-CM diagnosis codes are used by all providers– Maintained by National Center for Health Statistics

ICD-9-CM procedure coding system – Developed by HCFA (now CMS)– ICD-9-CM procedure codes are used by hospitals for

inpatient reporting– Maintained by CMS

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Code Sets – ICD-10-CM & ICD-10-PCS

ICD-10 – Diagnosis coding system developed by WHO as a

replacement for ICD-9 – Implemented for mortality coding in the U.S. in 1999

ICD-10-CM– U.S. clinical modification of the WHO’s ICD-10– Diagnosis coding system (no procedure codes)

ICD-10-PCS– Developed by CMS to replace the ICD-9-CM

procedure coding system

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New Federal Regulations

Final Federal Regulations – January 16, 2009– Health Insurance Reform; Modifications to the Health

Insurance Portability and Accountability Act (HIPAA) – Transactions

HIPAA Administrative Simplification; Modifications to Medical Data Code Set Standards to Adopt ICD-10-CM and ICD-10-PCS

Effective – March 17, 2009

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New Federal Regulations

Transactions Upgrades– All HIPAA Entities– All ASC X12 and NCPDP HIPAA transactions

Code Sets Adoption ICD-9-CM diagnosis codes to ICD-10-CM All healthcare settings ICD-9-CM procedure codes to ICD-10-PCS All hospital inpatient services All other sites continue to use CPT® and HCPCS codes

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Regulations – Compliance

Transactions Upgrades– Compliance by January 1, 2012

Except for Medicaid Rx Subrogation (1/1/13)Suggested testing by January 1, 2011

Code Sets Adoption Compliance by October 1, 2013

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HIPAA Modification – Transactions

Transactions include: – X12 837 – Claims (dental, professional, institutional

(DPI))– X12 837/D.0 – Retail Pharmacy (supplies and

professional services)– X12 837 – Coordination of Benefits (DPI)– X12 270/271 – Eligibility for a Health Plan (DPI)– X12 276/277 – Healthcare Claim Status (DPI)– X12 834 – Enrollment and Disenrollment (HP)– X12 835 – Healthcare Payment and Remit – X12 278 – Referral Certification & Authorization– NCPDP D.0 – Various Pharmacy

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HIPAA Modification – Transactions

X12/NCPDP upgrades impact claims software: – Facilitate description of diagnosis and procedure

codes (number?)– Greatly improve eligibility transactions– Facilitate “Present on Admission”– Facilitate other Medicare/plan changes

Estimate over 800 changes (updates from over six years of use)

HIPAA testing will be a key to ICD-10-CM/PCS implementation

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Changes: ICD-10-CM Structure

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ICD-9-CM

3-5 characters First character is numeric

or alpha Characters 2-5 are

numeric Always at least 3

characters Use of decimal after 3

characters

ICD-10-CM

3-7 characters Character 1 is alpha All letters except U Characters 2-7 are alpha

or numeric Always at least 3

characters Use of decimal after 3

characters



ICD-9-CM Structured Format

XX .XX XX XX XX55EE 1 4 0 0.VV

Category Etiology, anatomic site, manifestation

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Numeric or Alpha (E or V) Numeric

3 – 5 Characters

Changes – Classifications

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XX XX XX XX

Category

.Etiology, anatomic

site, severity

Added code extensions (7th character) for obstetrics, injuries, and external causes of injury

XX XX XXAAMMS 3 2 0. 1 0 A

Additional Characters

Alpha (Except U)

2 - 7 Numeric or Alpha

3 – 7 Characters14

ICD-10-CM Structured Format




Alphanumeric (alpha characters are not case-sensitive)– Addition of a 6th character– Added 7th character for obstetrics, injuries, and external

causes of injury– Addition of dummy place holder (“x”)

Certain diseases have been reclassified to reflect current medical knowledge

Specificity and detail have been significantly expanded– Non-specific codes are still available when detailed

documentation is unavailable

How Does ICD-10 Differ From ICD-9-CM

3/4 15



Classification Changes

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ICD-9-CM 707.05 Pressure ulcer

buttock 707.22 Pressure ulcer stage

II 707.24 Pressure ulcer stage

IV

ICD-10-CM L89.111 Decubitus ulcer of

right buttock limited to breakdown of the skin

L89.124 Decubitus ulcer of left buttock with necrosis of bone

OR L89.121 Decubitus ulcer of

left buttock limited to breakdown of the skin

L89.114 Decubitus ulcer of right buttock with necrosis of bone

ICD-9-CM v ICD-10-CM Sample Codes



ICD-9-CM Mechanical Complication of Other Vascular Device, Implant and Graft: one code (996.1)

Type Device Episode of Care

Breakdown Graft, Aorta Initial encounter

Leakage Graft, Carotid artery Subsequent encounter

Displacement Graft, Femoral artery Sequela (late effect of injury)

Other (e.g., Obstruction) Dialysis catheter

Arteriovenous fistula

Arteriovenous shunt

Counterpulsation balloon

Infusion catheter

Umbrella device

ICD-10-CM Mechanical Complication of Other Vascular Grafts : 156 codes


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Changes: ICD-10-PCS – Structure

ICD-9-CM has 3-4 characters

All characters are numeric

All codes have at least 3 characters

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ICD-9-CM ICD-10-PCS

ICD-10-PCS has 7 characters

Each can be either alpha or numeric

Numbers 0-9; letters A-H, J-N, P-Z

Alpha characters are not case-sensitive

Each code must have 7 characters



ICD-9-CM

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ICD-10-PCS

.XX XX XX XX1 2 4 3

XX XX XX XXXX XX XX33 EE 00 44FF 88 0011 00 HH ZZ00 77 330 D B X5 8 Z

ICD-10-PCS – Structured Format



11 22 33 44 55 66 77

Body System

Section Root Operation

Body Part

Approach

Device

Qualifier

Characters (Medical/Surgery)

ICD-10-PCS – Structured Format

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ICD-9-CM Suture of Artery: One code 39.31

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Approach Body Part0-Open Abdominal Aorta

3-Percutaneous Common Carotid Artery

4-Percutaneous Endoscopic Radial Artery

…

…

…

…

…

61 Different Arteries

ICD-10-PCS Repair of Artery: 183 codes

Changes



ICD-9-CM Suture of Artery: one code (39.31), MS-DRGs 252-254 (MDC 5)

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Approach Body Part0-Open Abdominal Aorta

3-Percutaneous Common Carotid Artery

4-Percutaneous Endoscopic Radial Artery

…

…

…

…

…

61 Different Arteries

ICD-10-PCS Repair of Artery: 183 codes, MS-DRGs 252-254, 237-238 (MDC 5)

Changes



Implications of the Transition

Presents both opportunities and challenges Scope and complexity are significant Coded data are more widely used than when the U.S.

last transitioned – to ICD-9-CM Restrictions in the HIPAA transactions have hampered

achievement of simplification Transition will permit more:

– Benefits to standard EHR transitions – Use of EDI transactions– Sophisticated computer-assisted coding technologies

that will revolutionize the coding process***

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Coding Freeze – One or two years before compliance date– Freeze addition of any new codes except for

emergency – Could be as early as FY 2012 – Could be lifted October 2014 (April?)– Announcement in FY 2011 Medicare IP PPS NPRM?

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Implications of the Transition – Who?

Providers– Hospitals– Physicians– Outpatient facilities– Post-acute providers (home health agencies, skilled

nursing facilities, etc.) Health Plans or Payers

– Third party administrators – Employers

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Implications of the Transition – Who?

Others – Laboratories– Free standing ancillaries – Researchers – Public health agencies et al.– Data collection agencies/organizations (registries) – Vendors – Clearinghouses– Business associates and partners

Patients

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Implications of the Transition – Hospitals

Required to use ICD-10-CM and ICD-10-PCS Impacted by the most system changes Advantage in added detail:

– to identify severity and other “quality” factors– meet new POA and “never event” requirements – reduced billing paperwork

Data trending challenges:– maintenance of crosswalks among coding systems for

longitudinal data uses– potential for faculty decisions due to distorted inaccurate,

or misinterpreted data Will NOT experience an immediate change to CMS

payment system

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Other Healthcare Providers

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Non-inpatient facilities including physician offices will only use ICD-10-CM, NOT ICD-10-PCS

CPT® will continue to be used by Part B providers to describe procedures



General equivalence maps (GEMs) between ICD-9-CM and ICD-10-CM/PCS have been developed

ICD-9-CM ICD-10-PCS via CMS Web site

ICD-9-CM ICD-10-CM via CMS /NCHS Web sites

GEMs Maps

GEMs Maps

= GEMs Crosswalks

Mapping Between Old and New Systems

Implications

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Mapping Between Old and New Systems

½

Implications

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Reimbursement map added to CMS Web site:– Intended for use by payers– Temporary mechanism– Allows claims processing by legacy systems

NOTE: Maps should not be used for coding medical records



Why Does the U.S. Need to Implement ICD-10-CM and ICD-10-PCS?

Implication

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ICD-9-CM badly needed to be replaced– The classification system is 30 years old– The terminology and classification of some conditions are outdated and obsolete– The system is running out of space (2010?)– Unable to keep pace with advances in medical technology– Outdate codes produce inaccurate and limited data– Unable to meet current or future health data needs– Lack of international comparability– Cannot support interoperable data exchange



Why Does the U.S. Need to Implement ICD-10-CM and ICD-10-PCS?

Implication

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HHS believes there are three key issues that necessitate the need to update:– ICD-10-CM is out of data and running out of space for new codes – ICD-10 is the international standard to report and monitor diseases and

mortality, making it important to the U.S. for reporting and surveillance– ICD codes are core elements of many HIT systems, making the

conversion to ICD-10-CM/PCS necessary for fully realize the benefits of HIT adoption



What advantages should we see from implementation of ICD-10-CM/PCS?

Implication

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Better detail for payment and operations facilitates payment for quality and outcomes

Better detail (diagnoses and procedures or technology) to eliminate redundant and costly claims processing (9+? / 6+?)

Better detail to utilize standard electronic health records and population health reporting including facility comparisons

More efficiencies in administrative activities including claims, coding, quality review, and so forth



Implementation – Two Systems or One?

5010

ICD-10CM/PCS

01/012010

01/012011

01/012012

01/012013

10/012013

01/012014

ImplementationTesting

Implementation Testing

ARRA/HITECH

Implication

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X12/NCPDP HIPAA Transactions

– Implementation

– Testing

– Compliance ICD-10-CM/ICD-10-PCS

– Implementation

– Testing

– Compliance New Systems (RFIs & RFPs) ARRA EHR Challenges/Implementation

Implementation

Education &Training

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Implementation

Remember Resources

– Key supporters and worker bees

– Systems and other resources

– Vendors and Consultants HIPAA transactions are important

– What can be done in parallel? Other systems needs Internal v external schedules New systems Business goes on as usual (?)



Impact of Coding System Change

Develop strategy

Communicate

Assess readiness

Inventory process and systems impact

Plan Training and Testing

Develop metrics to document improvement

Develop budget

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Impact Assessment: Develop Strategy

Implementation

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Develop organizational strategy for HIPAA and ICD-10-CM/PCS implementation:– Establish sponsors! (Who for what?)– Establish a multi-disciplinary planning team

and designate leader(s)– Develop internal timeline, including resources

required (and contacts) – Develop organization-wide implementation

plan– ARRA integration



Impact Assessment: Communication

Implementation

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Communication management strategies – Minimize “fear of change” and fear from

rumors– Establish on-going communications with all

affected groups – Ensure external communication liaisons are

appointed and recognized



Impact Assessment: Communication

Implementation

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Build Awareness– Orient key personnel– Basic familiarity with structure, organization,

and unique features of new systems (on-going)– Provide understanding of how the new

classifications fits into internal and external transitions including electronic health records, health information exchange, and health reform

– Provide an understanding of how your strategy fits with the environment at your institution



Impact Assessment: Assess Readiness

Implementation

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Assess organizational readiness for electronic data interchange standards upgrades (5010 and ICD-10-CM/PCS)– Affected staff – including clinical– Information systems using 4010/4010a and

ICD-9-CM (Where in the world is ICD-9-CM?)– Documentation process and work flow– Data availability and use (How is it used now

and in the future?)– Organizational capacity



*Encoders and ARRA

Impact Assessment: Inventory

Implementation

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Assess what processes or systems will be impacted:– HIM/Coding Systems

DRG grouperEncoding software*Abstracting systemsCompliance software

– Claims or billing systems– Other systems – Future systems (on order/considered)



Reporting• Provider profiling• Quality

measurement• Utilization

management• Disease

management registries

• Other registries• State reporting

systems

• Fraud management• Aggregate data

reporting• Clinical systems• Patient assessment

data sets (e.g., MDS, PAI, OASIS)

• Managed care reporting system (HEDIS)

Support Systems•Case mix systems•Utilization management•Quality management•Case Management

Clinical Systems•Clinical protocols•Test ordering systems•Clinical reminder systems•Medical necessity software•Disease management systems•Decision support systems•Clinical systems•Pharmacy systems

Billing/ Financial•DRG grouper•Conversion of other payment methodologies•National and local coverage determinations•System logic and edits•Billing systems•Financial systems•Claim submission systems•Compliance checking systems

Registration•Registration and scheduling systems•Advance Beneficiary software•Performance measurement systems•Medical necessity edits


Implementation

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Implementation

Determine length of time for legacy and new coding systems

Determine which reports require modification Forms redesign Budgetary implications hardware/software Vendor readiness and timelines Build flexibility for future upgrades RFIs and RFPs



Implementation

Orient IS/IT personnel on specifications of code sets, and EDI if needed.

Perform comprehensive systems audit – Inventory databases and systems – Screens and input– Map electronic data flow to inventory all reports

containing ICD-9-CM – Detailed analysis of system changes needed

Determine testing (How?) that will be needed– Vendors– Trading partners – state coordination for HIPAA– Coding

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Implementation

Field size expansion Alphanumeric

composition Use of decimals Redefinition of code

values Longer code descriptions

Edit and logic changes Modification of table

structures Expansion of flat files

containing diagnosis codes

Systems interfaces

Determine required software changes




Impact Assessment: Plan Training

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Implementation

Assess educational needs and develop budget– Who will need early education for implementation

and training tasks?– Who will need education?– What type and level of education will they need?– How will the education be delivered? Timing of

education for what groups?– Education for HIM and Coding– Vendor product education



Impact Assessment: Plan Training Specifics

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Implementation

Multiple categories of users of coded data will require varying levels of training

Different categories of coders will require varying levels of training

– Coders working in settings that will not be using ICD-10-PCS will only require ICD-10-CM training

– Training for physician practice coders working in a medical specialty area can be focused on particular code categories



Other HIM Clinicians Senior management Information systems Quality management Utilization management Accounting Business Office Auditors and consultants Patient access and registration Clinical department managers

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Ancillary departments Data analysts Researchers Epidemiologists Software vendors Performance improvement Compliance Data quality management Data security Data analysts

Impact Assessment: Plan Training – Who Else?

Implementation



Impact Assessment: Plan Testing – With Whom?

What types of testing will be needed? When?

– What coordination with vendors – schedules– What can be coordinated state-wide with

Health plans and payers Existing trading partners New trading partners

What internal testing of systems and education

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Implementation



Impact Assessment: Documentation Improvement

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Implementation

Conduct gap analysis of coding and documentation practices – Assess adequacy of staff knowledge

Measure coding professional’s baseline knowledge of anatomy, physiology, pharmacology, and medical terminology

Identify areas of weakness and provide education if necessary

– Assess adequacy of medical record documentation to support level of detail in new coding systems – improve as needed



Impact Assessment: Develop Budget

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Implementation

Departmental budgets responsible for costs– Systems, hardware, software, education

Increased staffing?– Impact on productivity and accuracy

Short-term (learning curve) and long term CAC technology and advances in mapping from clinical terminologies that will improve productivity and accuracy

Consulting Services – Backlogs– Monitoring coding accuracy– Other



Expectations: “Lessons Learned” from Other Countries

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Implementation

Begin now – Don’t wait! Importance of planning and preparation Six-month learning curve for coding Vendor readiness is extremely important – HITECH?

(the standards are not new) Communication is critical Targeted significant ICD-9/ICD-10 comparability issues



Expectations: Bottom Line on Preparation (Goals)

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Implementation

Maintain coding productivity Maintain coding accuracy Reduce claims rejections and denials Maintain account receivables Proper claims payment Reduce risk of compliance issues Decisions based on improved data



Expectations: ICD-10-CM and ICD-10-PCS in 2013

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Implementation

Compliance deadlines were set per public comments

CMS and Congress are moving with the expectation that compliance deadlines must be met – no extensions even with HITECH

Testing will go only as good as the partners prepare for it – alliances are needed

Initial payments may not reflect new codes Codes will be “frozen” for some period of time Success will depend on starting now!



Resources

National Center for Health Statistics – CDC ICD-10-CMwww.cdc.gov/nchs/about/otheract/icd9/icd10cm.htm

Centers for Medicare and Medicaid Services ICD-10-PCSwww.cms.hhs.gov/ICD10

ICD-10 and HIPAA Federal Register Noticeswww.access.gpo.gov/su_docs/fedreg/a080822c.html

CMS HIPAA Web sitewww.cms.hhs.gov/HIPAA GenInfo



Resources

AHIMA ICD-Ten Web pagewww.ahima.org/icd10

Analysis of Final Rule for the Adoption of the ICD-10-CM and ICD-10 PCS Code Sets www.ahima.org/dc (under analysis)

Analysis of the Final Rule Modifications to the HIPAA Electronic Transaction Standards

www.ahima.org/dc (under analysis)



ICD-10ICD-10

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©2010 AHIMA


Documents

2010 UBO/UBU Conference Health Budgets & Financial Policy Briefing: How ICD-10 Will Affect Billing Date: 25 March 2010 Time: 0900 – 0950 1