Well, it is official: the ICD-10 CM andprocedural coding system will be implemented in the United Stateswith dates of service effective October 1, 2014. The introductionof ICD-10 has sparked a great deal of confusion and alarm.Therefore, it is imperative to acknowledge its value and providereassurance that this is indeed a benefit for patients, as well asthe property & casualty (P&C) industry.

ICD-10 introduces more than 68,000 codes for ICD-10-CM, which isused by hospitals and other healthcare facilities to describe anddocument the patient clinically. Also included are more than 75,000codes for ICD-10-PCS. The increase in codes can certainly seemoverwhelming; however, they were introduced to specifically improvethe evaluation of medical care, as well as enable specificity ofpatient diagnosis, rather than prescribing to a general area ofconcern. It is this specificity that can be leveraged to bettertreat patients, by clearly articulating the nature of the illness.For P&C insurers, this significant increase in detail allows usto ensure the patient is being treated in accordance with thenature of the claim. So let's discuss what all of this means, andwhy ICD-10 is actually a good thing for those of us working withinP&C insurance.

Application In Claims

In the P&C industry, we can no longer use the cloak that weare not subject to the Health Insurance Portability andAccountability Act (HIPPA), and therefore ICD-10 usage is optional.The problem is that legislation introduced since HIPAA was enactedfor electronic transaction security—the Health InformationTechnology for Economic and Clinical Health Act (HITECH)—requiresour industry to pay careful attention. In addition, the medicalbills are submitted by medical providers, which are coveredentities by HIPAA. These covered entities are currently required tosubmit ICD-10 codes as of October 1st of next year. Thus, if theP&C industry is unable to consume the bills submitted by thecovered entities, then the medical bills will be virtuallyimpossible to review and pay appropriately.

Think about it…ICD-10 is a communication tool to payers in allaspects of healthcare. ICD-10 coding describes what is wrong with apatient and, if used appropriately, can communicate how the injurymay have occurred.

Addressing the Naysayers

There has been much discussion by uninformed bureaucrats andindividuals unfamiliar with ICD-10 as to the usefulness of theclassification system to the healthcare industry. Outliers like“being hit by a turkey” are used to describe the classification andto generally elicit a laugh at ICD-10's expense ofimplementation.

The last time we checked, the only time P&C insurers caredwas when a turkey actually caused a motor vehicleaccident. In all seriousness, though, how many times does thathappen? Moreover, what does that example have to do with thevalidity of ICD-10? Those of us who are experienced in analytics,clinical review, bill review, data abstraction, and paying medicalbills understand the value of delineation of a concise diagnosisthat is consistent among providers. Obtaining a diagnosis from oneprovider that is not only understood by another but is alsocomplete in its description is efficient while providinginformation for appropriate patient care. The objective of HIPPA isthe portability of medical information, ostensibly eliminatingrepeat tests from provider to provider and inappropriate medicationtracking.

The Global Context

There is also a global play in the use of ICD-10. Howembarrassing is it that the U.S. is the only civilized countrynot using ICD-10 today? In fact, the planned deploymentfor ICD-11 internationally is 2015. The U.S. is unable to takeadvantage of global comparisons in disease management like othercountries because we just don't speak the same medical language inclassifying diseases and injuries. This is valuable information forcar manufacturers all over the world to have in consistency ofcreating safer vehicles.

ICD-10 will actually inform the side of the body injured in anauto accident or whether the burn received by the patient was froman airbag deployment. If we are discussing value, then look to thepertinent information applicable to P&C insurers instead oferroneous, off-the-cuff examples. Undeniably, ICD-10 will impactmore products and safety considerations for consumers. As anexample of conciseness for P&C claims, we deal with a highvolume of “whiplash” injuries or “cervical sprain/strains.” Thecurrent ICD-9 code for this injury is 847.0, whereas ICD-10 createstwo separate codes that distinguish between the soft tissueaffected by this type of injury:

• S13.4XXA – Sprain of ligaments of cervical spine, initialencounter
• S16.1XXA – Strain of muscle, fascia and tendon at neck level,initial encounter

The distinction in ICD-10 has separated the ligament from othersoft tissues in the neck. This distinction may provide more insightinto the severity of an injury and treatments that are mostappropriate due to the specificity. Other codes in the ICD-10injury section have more complete descriptions, thereby allowingthe provider to describe the injury and the site of injury ingreater detail. This additional information will result inefficiency gains between the insurer and the medical provider, asless clarification and back-and-forth communication will benecessary.

Some Benefits and Challenges

The benefits of the new classification system to both theinsurance carrier and the medical provider have been proven anddocumented. The benefits to the provider, for example, include:

• Decreased administrative burden. Provider staff will spend lesstime making copies and responding to requests for additionaldocumentation.
• The new codes are distinct with a focus on outcomes theyprovide a key concept in coordination of care.

Perhaps the greatest challenge with implementation is thecoordination of all aspects of readiness. ICD-10 touches many areasof provider and carrier business, and the impact cannot beminimized. To date, creating a program around the multiple areasthat use the code sets and then building an effective program toensure compliance have been the most valuable aspects of successfulexecution. Providers may nevertheless experience issues in severalareas during the implementation process. Fortunately such issuescan be mitigated with proper management, including:

• Payers may delay payments because of readiness issues. Carriersneed to be able to handle the costs associated with changes inaccounts receivable timelines.
• Providers will most certainly take a productivity hit. This hasbeen proven in many studies, as well as while observing countriessuch as Canada in its implementation experience. The effect can,however, be lowered with proper training, practice, implementationof electronic health records, and the use of computer-assistedcoding software.
• ICD-10 code sets require knowledge to operate and applysuccessfully. Providers may encounter a mixed bag of frustrationand enthusiasm from office staff.
• Office and hospital staff will also likely be addressing issuesstemming from the payer failing to pay bills properly. These issuescan definitely be morale- changers.

Of course, carriers will not need all individuals who encounterthe new sets to be experts in coding, although it doesn't hurt toretain a few key individuals with that skill set. Managers willneed to ensure staff understands how the code set is used. Someissues that P&C insurers specifically will need to resolveare:

• The operational impact to medical bill review because theICD-10 code sets are so detailed. As a result, there is opportunityfor either more straight-through claims processing or toinvestigate a greater number of claims based on specificcriteria.
• Carriers will receive code sets even after the implementationdate of October 1, 2014. This may happen because the provider isnot a covered entity under HIPAA, or if it has an exemption. Eitherway, carriers must be versatile enough to handle both situationsand pay bills accordingly.
• Did you miss an internal area that uses ICD-10 during yourassessment phase? If so, then just make the fix. It is alsoimportant to establish the expectation that there may be unknownsin order to minimize frustration within your teams.
• Carriers will need to understand any gaps in bill reviewsystems after ICD-10 code set implementation. This is because someedits in bill review systems were done because ICD-9 was sonon-specific that  it created more work to review thecare.

Who Is Ready Then?

A recent snapshot survey by Aloft Group,¹ aNewburyport, Mass. healthcare branding and marketing firm, foundthat 74.6 percent of respondents are 25-percent or less completedin the ICD-10 code set conversion. The biggest complaint or reasonfor not being farther along was time and limited financialresources (71 percent). Overall, the majority felt they would meetthe 2014 deadline (55.4 percent), while some were concerned (37.3percent). Sixty-one percent of respondents felt one of the mostimportant aspects of a system that uses ICD-10 was the ability torun dual reporting (ICD-9 and ICD-10) followed by assistance withformalized user training plan and education to improve physicianacclimation (57.7 percent).

Best Practices

Certain areas outlined above are crucial for readiness withICD-10 implementation. Best practices can only be achieved byutilizing the industry information where multiple guides forproviders and carriers are available to manuever the multiplechanges that are heading our way. Ask any vendor that integrateswith your system and currently provides ICD-9 codes what it isdoing to ensure readiness, and how it plans to connect all thevarious streams together to ensure a successful transition to thismandatory change.

Footnote

1.  John DeGaspari, A Look at ICD-10 Readiness, Healthcare Informatics, March1, 2013.