ICD-9 Codes Make Way for ICD-10

The ICD-10 billing code system for Medicare and Medicaid programs, though delayed, is on its way. Designed to replace the 27-year-old ICD-9 system, ICD-10 will expand the number of codes available for billing. With every innovation, however, comes a price tag.

Many medical groups, including the American Medical Association, American College of Physicians, and the Medical Group Management Association, solicited Nachimson Advisors to study the impact of ICD-10 coding and asked for an extended deadline for implementation, which currently stands at Oct. 1, 2011.

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Nachimson Advisors estimates the cost of conversion to ICD-10 for a typical three-physician practice at more than $83,000. For a 100-physician practice, the cost of conversion is estimated at more than $2.7 million.

The high-ticket item is increased documentation costs. Using the new alphanumeric ICD-10 codes will require more extensive documentation, the Nachimson report noted.

According to the proposed rulemaking on ICD-10 codes (for outpatient practices) and ICD-10 PCS codes for inpatient procedures, the new codes are needed because codes in the old system are being exhausted. Many new codes have been added to describe new procedures and diagnoses that reflect changes in medical practice.

ICD-9 was not designed to handle the increased level of detail required to support emerging needs, such as biosurveillance and pay-for-performance programs. The old codes also have a lack of detail to describe advanced technology procedures. Since 2002, 138 countries worldwide have adopted ICD-10 reporting. The United States has only adopted ICD-10 codes for reporting mortality.

What are the benefits of the new codes? According to the American Health Information Management Association (AHIMA), once ICD-10 is implemented, “the trend of deteriorating health data will reverse to allow the healthcare industry to accommodate a robust 21st century classification system.” Among the data being collected that would improve significantly under ICD-10 are quality measurement, pay-for-performance, medical error reduction, public health reporting, biosurveillance, actuarial premium setting, cost analysis, and service reimbursement, according to AHIMA.