The Complete ICD-10 Guide

What is ICD-10?

The ICD-10 is copyrighted by the WHO. The WHO authorized a US adaptation of the code set for government purposes. As agreed, all modifications to the ICD-10 must conform to WHO conventions for the ICD. Currently, the United States uses the ICD code set, Ninth Edition (ICD-9), originally published in 1977, and adopted by this country in 1979 as a system for classification of morbidity data and subsequently mandated as the Medicare claims standard in 1989 in the following forms:

• ICD-9-CM (Volume 1), the tabular index of diagnostic codes
• ICD-9-CM (Volume 2), the alphabetical index of diagnostic codes
• ICD-9-CM (Volume 3), institutional procedure codes used only in inpatient hospital settings

In 1990, the WHO updated its international version of the ICD-10 (Tenth Edition, Clinical Modification) code set for mortality reporting. Other countries began adopting ICD-10 in 1994, but the United States only partially adopted ICD-10 in 1999 for mortality reporting. The National Center for Health Statistics (NCHS), the federal agency responsible for the United States’ use of ICD-10, developed ICD-10-CM, a clinical modification of the classification for morbidity reporting purposes, to replace our ICD-9-CM Codes, Volumes 1 and 2. The NCHS developed ICD­-10-CM following a thorough evaluation by a technical advisory panel and extensive consultation with physician groups, clinical coders, and others to ensure clinical accuracy and usefulness.

We will transition from the decades-old Ninth Edition of the International Classification of Diseases (ICD-9) set of diagnosis and inpatient procedure codes to the Tenth Edition of those code sets—or ICD-10—the version currently used by most developed countries throughout the world. ICD-10 allows for greater specificity and detail in describing a patient’s diagnosis and in classifying inpatient procedures, so reimbursement can better reflect the intensity of the patient's condition and diagnostic needs.

This transition will have a major impact on anyone who uses health care information that contains a diagnosis and/or inpatient procedure code, including:

• Home Health Agencies
• Hospitals
• Health care practitioners and institutions
• Health insurers and other third-party payers
• Electronic-transactions clearinghouses
• Hardware and software manufacturers and vendors
• Billing and practice-management service providers
• Health care administrative and oversight agencies
• Public and private healthcare research institutions

Planning and preparation are important to help streamline your practice’s transition.

This transition will affect all covered entities as defined by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Covered entities are required to adopt ICD-10 codes for services provided on or after the October 1, 2015, compliance date. For inpatient claims, ICD-10 diagnosis and procedure codes are required for all stays with discharge dates on or after October 1, 2015.

Please note that the transition to ICD-10 does not directly affect Home Health Agencies, who do not use the Current Procedural Terminology (CPT) codes. Healthcare Common Procedure Coding System (HCPCS) codes which ARE used in Medicare Home Health billing, will not be affected by the change to ICD-10-CM.

New Final Rule Provided Additional Year for Preparation

On April 1, 2014, the U.S. Department of Health and Human Services issued a final rule establishing a new compliance date of October 1, 2015. Postponing the implementation date allowed for an additional year of preparation. However, the time is near and agencys are running out of time to prepare for the nearing transition!

About Version 5010

To process ICD-10 claims or other transactions electronically, home health agencies, payers, and vendors must first implement the “Version 5010” electronic health care transaction standards mandated by HIPAA. The previous HIPAA “Version 4010/4010A1” transaction standards do not support the use of the ICD-10 codes. Clearinghouses will not convert ICD-9 codes to ICD-10 if you are using a Version 4010/4010A1 format.

All parties covered by HIPAA were required to have installed and tested Version 5010 in their practice management, billing and processing systems by January 1, 2012. It is important to know that though 5010 transactions will be in use before October 1, 2015, covered entities are not to use the ICD-10 codes in production (outside of a testing environment) prior to that date.

Benefits of ICD-10

By contrast, ICD-10 provides more specific data than ICD-9 and better reflects current medical practice.

The added detail embedded within ICD-10 codes informs home health agencies and health plans of patient incidence and history, which improves the effectiveness of case-management and care-coordination functions. Accurate coding also reduces the volume of claims rejected due to ambiguity. The new code sets will:

• Improve operational processes across the health care industry by classifying detail within codes to accurately process payments and reimbursements.
• Update disease classifications to be consistent with current clinical practice, medical and technological advances.
• Increase flexibility for future updates as necessary.
• Enhance coding accuracy and specificity to classify anatomic site, etiology, and severity.
• Support refined reimbursement models to provide equitable payment for more complex conditions.
• Streamline payment operations by allowing for greater automation.
• Provide more detailed data to better analyze disease patterns and track and respond to public health outbreaks; the United States will join the rest of the developed world in using ICD-10, and will be able to compare public health trends and pandemics across borders.
• Provide payers, program integrity contractors, and oversight agencies with opportunities for more effective detection and investigation of potential fraud or abuse and proof of intentional fraud.
• Provide more accurate information to support the development and implementation of important health care policies nationally and regionally.

ICD-10 codes refine and improve operational capabilities and processing, including:

• Detailed health reporting and analytics: cost, utilization, and outcomes
• Detailed information on condition, severity, co-morbidities, complications, and location
• Expanded coding flexibility by increasing code length to seven characters

ICD-9 vs ICD-10

By contrast, ICD-10 provides more specific data than ICD-9 and better reflects current medical practice.

When is the ICD-10 compliance deadline?

The ICD-10 deadline is October 1, 2015.

What does ICD-10 compliance mean?

ICD-10 compliance means that a HIPAA-covered entity uses ICD-10 codes for health care services provided on or after October 1, 2015. ICD-9 diagnosis and inpatient procedure codes cannot be used for services provided on or after this date. Everyone covered by HIPAA must be ICD-10 compliant starting on October 1, 2015.

Will ICD-10 replace Current Procedural Terminology (CPT) coding?

No. The transition to ICD-10 does not affect CPT coding for outpatient procedures and physician services. Like ICD-9 procedure codes, ICD-10-PCS codes are for hospital inpatient procedures only.

Who is affected by the transition to ICD-10? If I don’t deal with Medicare claims, will I have to transition?

Everyone covered by HIPAA must use ICD-10 starting October 1, 2015. This includes home health agencies and payers who do not deal with Medicare claims. Organizations that are not covered by HIPAA, but use ICD-9 codes should be aware that their coding may become obsolete if they do not transition to ICD-10.

Do state Medicaid programs need to transition to ICD-10?

Yes. Like everyone else covered by HIPAA, state Medicaid programs must use ICD-10 for services provided on or after October 1, 2015.

What happens if I don’t switch to ICD-10?

Claims for all health care procedures performed on or after October 1, 2015, must use ICD-10 diagnosis and inpatient procedure codes. (This does not apply to CPT coding for outpatient procedures.) Claims that do not use ICD-10 diagnosis and inpatient procedure codes cannot be processed. It is important to note, however, that claims for services provided before October 1, 2015, must use ICD-9 diagnosis and inpatient procedure codes.

Will I need to use both ICD-9 and ICD-10 codes during the transition?

Practice management systems must be able to accommodate both ICD-9 and ICD-10 codes until all claims and other transactions for services before October 1, 2015, have been processed and completed. Promptly processing ICD-9 transactions as the transition date nears will help limit disruptions and will limit the timeframe when dual code sets need to be used.

If I transition early to ICD-10, will CMS be able to process my claims?

No. CMS and other payers will not be able to process claims using ICD-10 until the October 1, 2015, compliance date. However, organizations will need to work with their internal team and with business trading partners to test their software systems from beginning to end. This involves testing claims, eligibility verification, quality reporting and other transactions and processes using ICD-10 to make sure the new code set can be processed correctly.

Codes change every year, so why is the transition to ICD-10 any different from the annual code changes?

ICD-10 codes are completely different from ICD-9 codes. Currently, ICD-9 codes are mostly numeric and have 3 to 5 digits. ICD-10 codes are alphanumeric and contain 3 to 7 characters. ICD-10 is more robust and descriptive with “one-to-many” matches to ICD-9 in some instances. Like ICD-9 codes are now, ICD-10 codes will be updated every year. ICD-9 codes will not continue to be updated after October 1, 2015.

Why is the switch to ICD-10 happening?

The health care industry is making the transition from ICD-9 to ICD-10 because:

• ICD-9 codes provide limited data about patients’ medical conditions and hospital inpatient procedures. ICD-9 is 30 years old, it has outdated and obsolete terms, and is inconsistent with current medical practices. Also, the structure of ICD-9 limits the number of new codes that can be created, and many ICD-9 categories are full.
• ICD-10 codes allow for greater specificity and exactness in describing a patient’s diagnosis and in classifying inpatient procedures. ICD-10 will also accommodate newly developed diagnoses and procedures, innovations in technology and treatment, performance-based payment systems, and more accurate billing. ICD-10 coding will make the billing process more streamlined and efficient, and this will also allow for more precise methods of detecting fraud.

What should home health agencies do to prepare for the transition to ICD-10?

For home health agencies who have not yet started to transition to ICD-10, below are action steps to take now. Some of these activities, such as establishing a transition team and communicating to internal staff, might not be necessary for small home health agencies where one or two people would be handling the transition activities.

• Establish a transition team or ICD-10 project coordinator, depending on the size of your agency, to lead the transition to ICD-10 for your agency.
• Develop a plan for making the transition to ICD-10; include a timeline that identifies tasks to be completed and crucial milestones/relationships, task owners, resources needed, and estimated start and end dates.
• Determine how ICD-10 will affect your agency. Start by reviewing how and where you currently use ICD-9 codes. Make sure you have accounted for the use of ICD-9 in authorizations/pre-certifications, physician orders, medical records, superbills/encounter forms, practice management and billing systems, and coding manuals.
• Review how ICD-10 will affect clinical documentation requirements and electronic health record(EHR) templates.
• Communicate the plan, timeline, and new system changes and processes to your agency, and ensure that leadership and staff understand the extent of the effort the ICD-10 transition requires.
• Secure a budget that accounts for software upgrades/software license costs, hardware procurement, staff training costs, revision of forms, work flow changes during and after implementation, and risk mitigation.
• Talk with your payers, billing and IT staff, and practice management system and/or EHR vendors about their preparations and readiness.
• Coordinate your ICD-10 transition plans among your trading partners and evaluate contracts with payers and vendors for policy revisions, testing timelines, and costs related to the ICD-10 transition.
• Talk to your trading partners about testing, and create a testing plan.

What do home health agencies need to do to make sure their ICD-10 systems are working properly?

Agencies should plan to test their ICD-10 systems early to help ensure they will be ready by the compliance date. Plan to test claims, eligibility verification, quality reporting, and other transactions and processes that involve ICD-10 codes from beginning to end. It is important to test both within your agency and with your payers and other business partners.

Beginning steps in the testing phase include:

• Working with practice management system and/or EHR vendors/IT staff and coders/billers to develop and test processes and systems using ICD-10 codes
• Determining when you will be ready to test, and working with payers and any clearinghouses or billing services that you use to schedule testing
• Developing a testing plan that outlines key dates and milestones for when tests should be completed

What steps can I take to ensure my practice has a smooth transition to ICD-10?

The following are steps you can take to ensure a smooth transition to ICD-10:

• Have a transition plan in place and make sure it documents the steps being followed and the dates that milestones will be achieved to comply with ICD-10 requirements
• Include vendor tasks in your plan and timeline, and make sure to communicate with your practice management system and/or EHR vendors regularly about ICD-10
• Establish an emergency fund to cover unexpected costs and possible reimbursement delays

What should payers do to prepare for the transition to ICD-10?

The transition to ICD-10 involves new coding rules, so it will be important for payers to review payment and benefit policies. Payers should ask software vendors about their readiness plans and timelines for product development, testing, availability, and training. Also ask billing services and clearinghouses, as well as the providers you work with, what they are doing to prepare and what their timelines are for testing and implementation. In order to upgrade to ICD-10 successfully, it is important to coordinate with business trading partners and test processes and transactions that use ICD-10 codes from beginning to end. It also is important to review and evaluate trading partner agreements and contracts.

What should software vendors, clearinghouses, and third-party billing services be doing to prepare their customers for the transition to ICD-10?

Software vendors should be working with customers to install and test ICD-10-ready products. Take a proactive role in assisting with the transition and partner with your customers so that they can get their claim spaid and avoid any interruption to their business processes. Products and services will be obsolete if steps are not taken to prepare.Clearinghouses and third-party billing services should be coordinating with vendors to ensure software products are up-to-date, and should be ready to test claims and other transactions using ICD-10 with home health agencies and payers. Please note, clearinghouse services do not convert ICD-9 to ICD-10 for home health agencies and payers.

Why should I prepare now for the ICD-10 transition?

The transition from ICD-9 to ICD-10 will change how you do business. Home health agencies, from large, medium to small will need to devote staff time and financial resources for transition activities.

What type of training will providers and staff need for the ICD-10 transition?

The American Health Information Management Association (AHIMA) recommends training begin no more than six to nine months before the October 1, 2015, compliance deadline. It is projected to take 1 hours for outpatient coders and 50 hours for inpatient coders. Home health coders are projected to require 24 - 40 hours of focused training. Coders in physician practices will need to learn ICD-10 diagnosis coding only, while hospital coders will need to learn both ICD-10 diagnosis and ICD-10 inpatient procedure coding. Take into account that ICD-10 coding training may be integrated into the CEs that certified coders must take to maintain their credentials. In addition, some high-level ICD-10 training will be required earlier so that staff can conduct testing in 2013. This includes training to learn the new ICD-10 systems and understand how the structure and granularity of the ICD-10 codes will affect clinical documentation.

Where can I find training opportunities?

Axxess provides comprehensive educational seminars that will aid in your transition process. Continuing medical education credits are available to attendees. Learn More.

ICD-9 has several limitations that prevent complete and precise coding and billing of health conditions and treatments

ICD-9-CM limits operations, reporting, and analytics processes because it:

1. Follows a 1970s outdated medical coding system.
2. Lacks clinical specificity to process claims and reimbursement accurately.
3. Fails to capture key details of patient conditions for recording and exchanging pertinent clinical information.
4. Limits the characters available (3-5) to account for complexity and severity.

The ICD-10 is copyrighted by the WHO. The WHO authorized a US adaptation of the code set for government purposes. As agreed, all modifications to the ICD-10 must conform to WHO conventions for the ICD. Currently, the United States uses the ICD code set, Ninth Edition (ICD-9), originally published in 1977, and adopted by this country in 1979 as a system for classification of morbidity data and subsequently mandated as the Medicare claims standard in 1989 in the following forms:

• The 35-year old code set contains outdated terminology and is inconsistent with current medical practice.
• The code length and alphanumeric structure limit the number of new codes that can be created, and many ICD-9 categories are already full.
• The codes themselves lack specificity and detail to support the following:
• Accurate anatomical descriptions
• Differentiation of risk and severity
• Key parameters to differentiate disease manifestations
• Optimal claim reimbursement
• Value-based purchasing methodologies
• The lack of detail limits the ability of payers and others to analyze information such as health care utilization, effectiveness, changes in population disease patterns, costs and outcomes, resource use and allocation, and performance measurement.
• The codes do not provide the level of detail necessary to further improve the accuracy and to streamline automated claim processing.

ICD-10 Transition Checklist for Large Home Health Agencies

The following is a checklist of ICD-10 tasks, including estimated timeframes for each task. Depending on your home health agency, many of these tasks can be performed on a compressed timeline or performed at the same time as other tasks. This checklist is designed to provide a viable path forward for home health agencies just beginning to prepare for ICD-10. Axxess encourages those who are ahead of this schedule to continue their progress forward.

Planning, Communication, and Assessment

Actions to Take Immediately

To prepare for testing, make sure you have completed the following activities. If you have already completed these tasks, review the information to make sure you did not overlook an important step.

• Review ICD-10 resources from trade associations, payers, and vendors
• Inform your staff/colleagues of upcoming changes (1 month)
• Create an ICD-10 project team (1 month)
• Identify how ICD-10 will affect your practice (3 months)
• How will ICD-10 affect your people and processes? To find out, ask all staff members how/where they use/see ICD-9
• Include ICD-10 as you plan for projects like meaningful use of electronic health records
• Develop and complete an ICD-10 project plan for your home health agency (1 month)
• Identify each task, including deadline and who is responsible
• Develop plan for communicating with staff and business partners about ICD-10
• Estimate and secure budget (potential costs include updates to practice management systems, new coding guides and superbills, staff training) (2 months)
• Ask your payers and vendors — software/systems, clearinghouses, billing services — about ICD-10 readiness (2 months)
• Ask about systems changes, a timeline, costs, and testing plans
• Ask when they will start testing, how long they will need, and how you and other clients will be involved
• Review trading partner agreements
• Select/retain vendor(s)
• Review changes in documentation requirements and educate staff by looking at frequently used ICD-9 codes and new ICD-10 codes (ongoing)

Transition and Testing

March 2013 to September 2015

• March 1, 2013 – December 31, 2013: Conduct high-level training on ICD-10 for clinicians and coders to prepare for testing (e.g., clinical documentation, software updates) (ongoing)
• April 1, 2013: Start testing ICD-10 codes and systems with your practice’s coding, billing, and clinical staff (9 months)
• Use ICD-10 codes for diagnoses your practice sees most often
• Test data and reports for accuracy
• Monitor vendor and payer preparedness, identify and address gaps (ongoing)
• October 1, 2013: Begin testing claims and other transactions using ICD-10 codes with business trading partners such as payers, clearinghouses, and billing services (10 months minimum)
• January 1, 2015 – April 1, 2015: Review coder and clinician preparation; begin detailed ICD-10 coding training (6-9 months)
• Work with vendors to complete transition to production-ready ICD-10 systems

Complete Transition/Full Compliance

October 1, 2015

• Complete ICD-10 transition for full compliance
• ICD-9 codes continue to be used for services provided before October 1, 2015
• ICD-10 codes required for services provided on or after October 1, 2015
• Monitor systems and correct errors if needed

Small and Medium Home Health Agencies

ICD-10 Transition Checklist

The following is a checklist of ICD-10 tasks, including estimated timeframes for each task. Depending on your agency, many of these tasks can be performed on a compressed timeline or performed at the same time as other tasks. This checklist is designed to provide a viable path forward for organizations just beginning to prepare for ICD-10. Axxess encourages those who are ahead of this schedule to continue their progress forward.

Planning, Communication, and Assessment

Actions to Take Immediately

To prepare for testing, make sure you have completed the following activities. If you have already completed these tasks, review the information to make sure you did not overlook an important step.

• Review ICD-10 resources trade associations, payers, and vendors
• Inform your staff/colleagues of upcoming changes (1 month)
• Create an ICD-10 project team (1-2 days)
• Identify how ICD-10 will affect your practice (1-2 months)
• How will ICD-10 affect your people and processes? To find out, ask all staff members how/where they use/see ICD-9
• Include ICD-10 as you plan for projects like meaningful use of electronic health records
• Develop and complete an ICD-10 project plan for your practice (1-2 weeks)
• Identify each task, including deadline and who is responsible
• Develop plan for communicating with staff and business partners about ICD-10
• Estimate and secure budget (potential costs include updates to practice management systems, new coding guides and superbills, staff training) (2 months)
• Ask your payers and vendors — software/systems, clearinghouses, billing services — about ICD-10 readiness (2 months)
• Review trading partner agreements
• Ask about systems changes, a timeline, costs, and testing plans
• Ask when they will start testing, how long they will need, and how you and other clients will be involved
• Select/retain vendor(s)
• Review changes in documentation requirements and educate staff by looking at frequently used ICD-9 codes and new ICD-10 codes (ongoing)

Transition and Testing

March 2013 to September 2015

Transitioning to ICD-10

he ICD-9 code sets used to report medical diagnoses and inpatient procedures will be replaced by ICD-10 code sets.

Below is an outline of the background on ICD-10 transition, general guidance on how to prepare for it, and resources for more information.

About ICD-10

ICD-10-CM/PCS (International Classication of Diseases, 10th Edition, Clinical Modication /Procedure Coding System) consists of two parts:

1. ICD-10-CM for diagnosis coding
2. ICD-10-PCS for inpatient procedure coding

ICD-10-CM is for use in all U.S. health care settings. Diagnosis coding under ICD-10-CM uses 3 to 7 digits instead of the 3 to 5 digits used with ICD-9-CM, but the format of the code sets is similar. ICD-10-PCS is for use in U.S. inpatient hospital settings only. ICD-10­ PCS uses 7 alphanumeric digits instead of the 3 or 4 numeric digits used under ICD-9-CM procedure coding. Coding under ICD-10-PCS is much more specic and substantially different from ICD-9-CM procedure coding. The transition to ICD-10 is occurring because ICD-9 produces limited data about patients’ medical conditions and hospital inpatient procedures. ICD-9 is 30 years old, has outdated terms, and is inconsistent with current medical practice. Also, the structure of ICD-9 limits the number of new codes that can be created, and many ICD-9 categories are full.

Who Needs to Transition

ICD-10 will affect diagnosis and inpatient procedure coding for everyone covered by Health Insurance Portability Accountability Act (HIPAA), not just those who submit Medicare or Medicaid claims. The change to ICD-10 does not affect CPT coding for outpatient procedures. Health care providers, payers, clearinghouses, and billing services must be prepared to comply with the transition to ICD-10, which means:

• All electronic transactions must use Version 5010 standards, which have been required since January 1, 2012. Unlike the older Version 4010/4010A standards, Version 5010 accommodates ICD-10 codes.
• ICD-10 diagnosis codes must be used for all health care services provided in the U.S., and ICD-10 procedure codes must be used for all hospital inpatient procedures. Claims with ICD-9 codes for services provided on or after the compliance deadline cannot be paid.

Transitioning to ICD-10

It is important to prepare now for the ICD-10 transition. The following are steps you can take to get started:

Providers

Develop an implementation strategy that includes an assessment of the impact on your agency, a detailed timeline, and budget. Check with your billing service, clearinghouse, or practice management software vendor about their compliance plans. Providers who handle billing and software development internally should plan for medical records/coding, clinical, IT, and finance staff to coordinate on ICD-10 transition efforts.

Payers

Review payment policies since the transition to ICD-10 will involve new coding rules. Ask your software vendors about their readiness plans and timelines for product development, testing, availability, and training for ICD-10. You should have an implementation plan and transition budget in place.

Software Vendors

Work with customers to install and test ICD-10 ready products. Take a proactive role in assisting with the transition so your customers can get their claims paid. Products and services will be obsolete if steps are not taken to prepare.

Home Health Resources

On October 1, 2015, the home health care industry will transition from ICD-9 to ICD-10 codes for diagnoses and inpatient procedures.

This transition is going to change how you do business—from registration and referrals to superbills and software upgrades. But that change doesn’t have to be overwhelming. Below are some resources to help your practice prepare for the transition.

Understanding the Basics

These fact sheets will introduce you to ICD-10, explain why it’s necessary, and give you the information you’ll need to get started on your transition.

• What is ICD-10?
• ICD-10 FAQs
• Key parameters to differentiate disease manifestations
• Optimal claim reimbursement
• Value-based purchasing methodologies

Implementation Timelines, and Checklists

Checklists and timelines provide an at-a-glance view of what you need to do to get ICD-10 ready. The ICD-10 implementation guides provide detailed information about the ICD-10 transition. Axxess also developed an online ICD-10 implementation guide, which is a web-based tool that provides step-by-step guidance on how to transition to ICD-10 for small/medium to large home health agencies. Please note that the dates and milestones in these materials are recommendations only; you can adapt them to your needs for meeting the October 1, 2015, deadline.

Statute and Regulations

HHS has announced the final rule that delays the ICD-10 compliance date to October 1, 2015.

ICD-10 Final Rule

On December 7, 2011, CMS released a final rule updating payers' medical loss ratio to account for ICD-10 conversion costs. Effective January 3, 2012, the rule allows payers to switch some ICD-10 transition costs from the category of administrative costs to clinical costs, which will help payers cover transition costs.

On January 16, 2009, the U.S. Department of Health and Human Services (HHS) released the final rule mandating that everyone covered by the Health Insurance Portability and Accountability Act (HIPAA) implement ICD-10 for medical coding.

In a related final rule released the same day, HHS mandated that transaction standards for all electronic health care claims must be upgraded to Version 5010 from Version 4010/4010A by January 1, 2012. As of January 1, 2012 all HIPAA covered entities must be compliant with Version 5010. If you have not upgraded, there are resources available to assist you.