On Oct. 1, 2013, ICD-10-CM (clinical modification) and ICD-10-PCS (procedural coding system) will be implemented into the HIPAA mandated code, increasing the number of codes from around 13,600 under ICD-9 to around 69,000 under ICD-10. While ICD-9 codes are mostly numeric, ICD-10 codes are all alphanumeric, beginning with a letter and including a mix of numbers and letters thereafter. The transition is largely driven by the lack of room in ICD-9 for the growing number of diagnoses due to medical advancements and increased specificity. ICD-10 will allow for greater specificity of documentation, better documentation of severity and better analysis of disease patterns and treatment outcomes.
According to CMS, starting on Oct. 1, 2013, ICD-10 codes must be used on all HIPAA transactions, including outpatient claims with dates of service and inpatient claims with dates of discharge on and after Oct. 1. Otherwise, claims and other transactions may be rejected and reimbursements could be impacted. The ICD-10 change does not affect CPT coding for outpatient procedures.
Here are 10 steps hospitals should take over the next three years to prepare for ICD-10 go-live.
1. Form a team to prepare for ICD-10 from a variety of perspectives. According to Richard Rosenhagen, assistant vice president of health information management and clinical document improvement for South Nassau Communities Hospital in Oceanside, N.Y., the first step his hospital took in preparing for ICD-10 was to create a steering committee, which included representatives from the HIM department, patient accounting, finance, auditing and compliance, hospitalists, physicians and hospital administration. "We found it was very important to include the physicians' offices, so we pulled in physician office liaisons and ancillary representatives," he says. "That sounds like a lot of people, but it's necessary."
He says the first thing a steering committee should do is lay out the expectation that the hospital must be ready for ICD-10. "You have to tell everyone that the government is not giving us any wiggle room on this," Mr. Rosenhagen says. "There is no 'give me an extension' kind of request, and they will not honor any bills they receive that are not in ICD-10."
2. Assess your current resources. Paula Lawlor, president of Conifer Health Solutions' HIM/Clinical Revenue Cycle Services, and Lisa Walter, vice president of Conifer HIM Services, recommend hospitals start looking immediately at their current software, training capabilities and coding staff.
Assessing the hospital IT department is critical, Mr. Rosenhagen says. "Hospitals have to go and do a current assessment of every system they have now on the books, including the systems that they do not supply support to, to identify whether or not that system requires ICD-10," he says. "We required the IT department to speak at every meeting and give us an IT update." He says the IT department should do an assessment and a gap analysis and design a matrix that shows every system, the system's sponsor and system administrator, the contact information for the company and any other information on the system's progress toward ICD-10.
Assessing a hospital's training capabilities would involve looking at the hospital's current in-house training staff, if applicable. If your hospital has traditionally outsourced its training, you should start looking at the different options for outside training — or consider training internal "super users" who will be able to assist your general staff.
Assessing a hospital's current coding staff might include looking at whether coding is all in-house or outsourced. "Coding resources are certainly hard to find today, and we expect that there will be coders who will age out and choose not to participate in this, maybe even retiring earlier than they would have otherwise," Ms. Lawlor says. She says hospitals might need to look at training younger, less experienced coders, as experienced coders will be in short supply come ICD-10.
3. Talk to software vendors about their plans for ICD-10. In order to transition to ICD-10, hospitals and software vendors will have to communicate to make sure hospital software is updated to accommodate ICD-10 coding changes. "All the field sizes have to be expanded to accommodate the codes," says Ms. Lawlor. She adds that upgrades for ICD-10 may well include upgrades to other aspects of the hospital's software. "Typically with software vendors, if they're going to be doing an upgrade, they'll probably include some additional advancements that they needed to implement all along. Often when you upgrade software, it also includes a hardware component."
Starting in Oct. 2013, she says hospital software will have to accept both ICD-10 and ICD-9. While ICD-9 may be phased out within a few years, the old coding system will likely be used by most hospitals several months into the new ICD billing fiscal year because old accounts are still being coded.
4. Budget for major changes. Experts agree that hospitals should budget now for major changes that may be necessary to prepare for ICD-10. For example, George Arges, senior director for policy of the American Hospital Association, points out many hospitals depend on several different modules from different vendors that support their system. "Some of them are thinking, 'You know what, we may want to rethink all the different vendors we currently have. Maybe we want to move toward an all-inclusive vendor who can support us at all levels,'" he says. "That's a huge task, but you have to begin having that discussion, and you have to look at the resources that are necessary to carry that forward."
Your hospital should also budget for training your coding team, whether that means outsourcing training for every coder or sending several "super users" to a conference and then letting them train the other coders. According to Mr. Rosenhagen, a three-day training session for one coder can cost around $2,000, so hospitals should prepare now for that expense. The hospital may also have to budget for coder salaries once certified coders become extremely coveted by desperate hospitals. "You may wind up paying people more just to prevent them from going somewhere else," he says. "If a coder on average gets paid $40-$50,000, there's a very good chance they'll be sucked up by a consultancy firm and brought in on a consultancy fee."
5. Talk to commercial payors on their progress toward ICD-10. Mr. Rosenhagen says while commercial payors are expected to make the transition to ICD-10 along with the federal government, it's possible that some payors may fall behind the deadline. "There's a very good chance some of these third-party payors from certain HMOs or union organizations will have to use parallel coding," Mr. Rosenhagen says. He says payors who fail to switch over to ICD-10 in time may force hospitals to use general equivalency mapping, which is designed to aid in converting diagnosis codes from ICD-9 to ICD-10. Unfortunately, he predicts GEM won't be a long-term answer for incompatible coding systems. "It's not exactly possible to crosswalk ICD-9 to ICD-10 because ICD-10 expands so many of the characters, whereas ICD-9 was a limited number of characters," he says.
Ms. Lawlor says the bottom line is that hospitals shouldn't assume their payors are ready for the transition without speaking to them. "I've been talking to a lot of CEOs, and I hear them say, 'You know what, it'll be taken care of. The insurance companies are going to do what they need to do, the software companies are going to do what they need to do,'" she says. "Some C-suite leaders don't understand how this will stop the reimbursement system, and they won't know where to point the finger for accountability."
6. Train coders on anatomy and physiology. Most hospitals realize coders have to be trained on coding changes through ICD-10, but some miss the fact that coders will also have to undergo a significant amount of anatomy and physiology training, Ms. Walter says. According to Mr. Rosenhagen, ICD-10 "increases the amount of medical language you have to be exposed to," he says. "If you're not exposed to it, you have to look it up and take that extra time."
Ms. Walter and Ms. Lawlor agree that while training on coding changes should take place a few months before go-live, clinical training can be done more informally over a longer period of time. "Clinical training can happen over the next couple of years," Ms. Lawlor says. "You could perhaps have a 'lunch and learn' [on a regular basis], where coders focus on different clinical areas and different sites."
7. Train coders on ICD-10 coding changes. Mr. Rosenhagen says planning for training must start immediately, as seats at training sessions will fill up quickly when hospitals realize the necessity of preparing their coders. He says many hospitals are looking to "train the trainer," meaning train a small group of people in-depth and then task them with training everyone else. He says training for the average coder is estimated to take around 24 hours of actual training, while super users would require more time.
According to Mr. Arges, the AHA recommends waiting until around six months before ICD-10 implementation to train coders, as coders will likely forget the material if they don't use it for a year before implementation. Nevertheless, he says hospitals should prioritize training in the year before ICD-10 go-live. Mr. Rosenhagen says if hospitals don't concentrate on developing super users and training staff adequately, they may end up spending more money for consultants.
8. Inform physicians on changes to documentation processes. Ms. Walter says hospitals should start making providers aware of the upcoming transition to ICD-10. "It's not too soon to start breaking down the documentation training into specific clinical areas and clinical procedures so that providers can get this information a little at a time," she says. Because ICD-10 uses more codes and increases medical specificity, providers may have to document more specifically than they're used to. Physicians will also have to adapt to a change in the physician query process. While physicians are currently queried after discharge, following the change through ICD-10, physicians will be queried before the patient is discharged to ensure accurate information and documentation.
She says physician training should be spread out to make sure busy providers have enough time to learn the necessary information. "When we do education with a physician group, you mostly don't get more than 15 minutes at a time, so we need to spread training out over time," she says.
9. Plan for coding processes to slow significantly following implementation. According to Mr. Rosenhagen, hospitals should plan for coding time to double initially. He says the learning curve for ICD-10 could significantly increase discharged not final billed claims, meaning the hospital should place the reduction of DNFB as a high priority. He says hospitals will likely need to hire more coders or faster ones without impacting quality of coding.
Ms. Walter and Ms. Lawlor say U.S. hospitals can learn from the experience of Canadian hospitals, who implemented ICD-10 in 2000. "We learned from Canada that productivity goes down significantly, and we do not believe it will ever go back up to the level it is at ICD-9," Ms. Lawlor says. "If hospitals have staffing issues today they have not resolved, it will only get worse when they go live with ICD-10."
10. Plan to use raw data from ICD-10 codes to improve your hospital's processes. Mr. Arges says ICD-10 presents a great opportunity for hospitals to assess their community needs down the road. "It's important for hospitals, as they begin to implement [ICD-10], to view it not just as a specific compliance exercise, but to look at how they intend to use that raw data down the road," he says. Because ICD-10 greatly increases the specificity of diagnosis and procedure documentation, hospitals can use the data to find out more about the kind of patients they're seeing and the severity of those patients' conditions. "They can better understand their community needs in a way that helps [the hospital] prepare the services they provide in the most appropriate way," Mr. Arges says.
According to CMS, starting on Oct. 1, 2013, ICD-10 codes must be used on all HIPAA transactions, including outpatient claims with dates of service and inpatient claims with dates of discharge on and after Oct. 1. Otherwise, claims and other transactions may be rejected and reimbursements could be impacted. The ICD-10 change does not affect CPT coding for outpatient procedures.
Here are 10 steps hospitals should take over the next three years to prepare for ICD-10 go-live.
1. Form a team to prepare for ICD-10 from a variety of perspectives. According to Richard Rosenhagen, assistant vice president of health information management and clinical document improvement for South Nassau Communities Hospital in Oceanside, N.Y., the first step his hospital took in preparing for ICD-10 was to create a steering committee, which included representatives from the HIM department, patient accounting, finance, auditing and compliance, hospitalists, physicians and hospital administration. "We found it was very important to include the physicians' offices, so we pulled in physician office liaisons and ancillary representatives," he says. "That sounds like a lot of people, but it's necessary."
He says the first thing a steering committee should do is lay out the expectation that the hospital must be ready for ICD-10. "You have to tell everyone that the government is not giving us any wiggle room on this," Mr. Rosenhagen says. "There is no 'give me an extension' kind of request, and they will not honor any bills they receive that are not in ICD-10."
2. Assess your current resources. Paula Lawlor, president of Conifer Health Solutions' HIM/Clinical Revenue Cycle Services, and Lisa Walter, vice president of Conifer HIM Services, recommend hospitals start looking immediately at their current software, training capabilities and coding staff.
Assessing the hospital IT department is critical, Mr. Rosenhagen says. "Hospitals have to go and do a current assessment of every system they have now on the books, including the systems that they do not supply support to, to identify whether or not that system requires ICD-10," he says. "We required the IT department to speak at every meeting and give us an IT update." He says the IT department should do an assessment and a gap analysis and design a matrix that shows every system, the system's sponsor and system administrator, the contact information for the company and any other information on the system's progress toward ICD-10.
Assessing a hospital's training capabilities would involve looking at the hospital's current in-house training staff, if applicable. If your hospital has traditionally outsourced its training, you should start looking at the different options for outside training — or consider training internal "super users" who will be able to assist your general staff.
Assessing a hospital's current coding staff might include looking at whether coding is all in-house or outsourced. "Coding resources are certainly hard to find today, and we expect that there will be coders who will age out and choose not to participate in this, maybe even retiring earlier than they would have otherwise," Ms. Lawlor says. She says hospitals might need to look at training younger, less experienced coders, as experienced coders will be in short supply come ICD-10.
3. Talk to software vendors about their plans for ICD-10. In order to transition to ICD-10, hospitals and software vendors will have to communicate to make sure hospital software is updated to accommodate ICD-10 coding changes. "All the field sizes have to be expanded to accommodate the codes," says Ms. Lawlor. She adds that upgrades for ICD-10 may well include upgrades to other aspects of the hospital's software. "Typically with software vendors, if they're going to be doing an upgrade, they'll probably include some additional advancements that they needed to implement all along. Often when you upgrade software, it also includes a hardware component."
Starting in Oct. 2013, she says hospital software will have to accept both ICD-10 and ICD-9. While ICD-9 may be phased out within a few years, the old coding system will likely be used by most hospitals several months into the new ICD billing fiscal year because old accounts are still being coded.
4. Budget for major changes. Experts agree that hospitals should budget now for major changes that may be necessary to prepare for ICD-10. For example, George Arges, senior director for policy of the American Hospital Association, points out many hospitals depend on several different modules from different vendors that support their system. "Some of them are thinking, 'You know what, we may want to rethink all the different vendors we currently have. Maybe we want to move toward an all-inclusive vendor who can support us at all levels,'" he says. "That's a huge task, but you have to begin having that discussion, and you have to look at the resources that are necessary to carry that forward."
Your hospital should also budget for training your coding team, whether that means outsourcing training for every coder or sending several "super users" to a conference and then letting them train the other coders. According to Mr. Rosenhagen, a three-day training session for one coder can cost around $2,000, so hospitals should prepare now for that expense. The hospital may also have to budget for coder salaries once certified coders become extremely coveted by desperate hospitals. "You may wind up paying people more just to prevent them from going somewhere else," he says. "If a coder on average gets paid $40-$50,000, there's a very good chance they'll be sucked up by a consultancy firm and brought in on a consultancy fee."
5. Talk to commercial payors on their progress toward ICD-10. Mr. Rosenhagen says while commercial payors are expected to make the transition to ICD-10 along with the federal government, it's possible that some payors may fall behind the deadline. "There's a very good chance some of these third-party payors from certain HMOs or union organizations will have to use parallel coding," Mr. Rosenhagen says. He says payors who fail to switch over to ICD-10 in time may force hospitals to use general equivalency mapping, which is designed to aid in converting diagnosis codes from ICD-9 to ICD-10. Unfortunately, he predicts GEM won't be a long-term answer for incompatible coding systems. "It's not exactly possible to crosswalk ICD-9 to ICD-10 because ICD-10 expands so many of the characters, whereas ICD-9 was a limited number of characters," he says.
Ms. Lawlor says the bottom line is that hospitals shouldn't assume their payors are ready for the transition without speaking to them. "I've been talking to a lot of CEOs, and I hear them say, 'You know what, it'll be taken care of. The insurance companies are going to do what they need to do, the software companies are going to do what they need to do,'" she says. "Some C-suite leaders don't understand how this will stop the reimbursement system, and they won't know where to point the finger for accountability."
6. Train coders on anatomy and physiology. Most hospitals realize coders have to be trained on coding changes through ICD-10, but some miss the fact that coders will also have to undergo a significant amount of anatomy and physiology training, Ms. Walter says. According to Mr. Rosenhagen, ICD-10 "increases the amount of medical language you have to be exposed to," he says. "If you're not exposed to it, you have to look it up and take that extra time."
Ms. Walter and Ms. Lawlor agree that while training on coding changes should take place a few months before go-live, clinical training can be done more informally over a longer period of time. "Clinical training can happen over the next couple of years," Ms. Lawlor says. "You could perhaps have a 'lunch and learn' [on a regular basis], where coders focus on different clinical areas and different sites."
7. Train coders on ICD-10 coding changes. Mr. Rosenhagen says planning for training must start immediately, as seats at training sessions will fill up quickly when hospitals realize the necessity of preparing their coders. He says many hospitals are looking to "train the trainer," meaning train a small group of people in-depth and then task them with training everyone else. He says training for the average coder is estimated to take around 24 hours of actual training, while super users would require more time.
According to Mr. Arges, the AHA recommends waiting until around six months before ICD-10 implementation to train coders, as coders will likely forget the material if they don't use it for a year before implementation. Nevertheless, he says hospitals should prioritize training in the year before ICD-10 go-live. Mr. Rosenhagen says if hospitals don't concentrate on developing super users and training staff adequately, they may end up spending more money for consultants.
8. Inform physicians on changes to documentation processes. Ms. Walter says hospitals should start making providers aware of the upcoming transition to ICD-10. "It's not too soon to start breaking down the documentation training into specific clinical areas and clinical procedures so that providers can get this information a little at a time," she says. Because ICD-10 uses more codes and increases medical specificity, providers may have to document more specifically than they're used to. Physicians will also have to adapt to a change in the physician query process. While physicians are currently queried after discharge, following the change through ICD-10, physicians will be queried before the patient is discharged to ensure accurate information and documentation.
She says physician training should be spread out to make sure busy providers have enough time to learn the necessary information. "When we do education with a physician group, you mostly don't get more than 15 minutes at a time, so we need to spread training out over time," she says.
9. Plan for coding processes to slow significantly following implementation. According to Mr. Rosenhagen, hospitals should plan for coding time to double initially. He says the learning curve for ICD-10 could significantly increase discharged not final billed claims, meaning the hospital should place the reduction of DNFB as a high priority. He says hospitals will likely need to hire more coders or faster ones without impacting quality of coding.
Ms. Walter and Ms. Lawlor say U.S. hospitals can learn from the experience of Canadian hospitals, who implemented ICD-10 in 2000. "We learned from Canada that productivity goes down significantly, and we do not believe it will ever go back up to the level it is at ICD-9," Ms. Lawlor says. "If hospitals have staffing issues today they have not resolved, it will only get worse when they go live with ICD-10."
10. Plan to use raw data from ICD-10 codes to improve your hospital's processes. Mr. Arges says ICD-10 presents a great opportunity for hospitals to assess their community needs down the road. "It's important for hospitals, as they begin to implement [ICD-10], to view it not just as a specific compliance exercise, but to look at how they intend to use that raw data down the road," he says. Because ICD-10 greatly increases the specificity of diagnosis and procedure documentation, hospitals can use the data to find out more about the kind of patients they're seeing and the severity of those patients' conditions. "They can better understand their community needs in a way that helps [the hospital] prepare the services they provide in the most appropriate way," Mr. Arges says.