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

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

Application In Claims

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

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

Addressing the Naysayers

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

The last time we checked, the only time P&C insurers cared was when a turkey actually caused a motor vehicle accident. In all seriousness, though, how many times does that happen? Moreover, what does that example have to do with the validity of ICD-10? Those of us who are experienced in analytics, clinical review, bill review, data abstraction, and paying medical bills understand the value of delineation of a concise diagnosis that is consistent among providers. Obtaining a diagnosis from one provider that is not only understood by another but is also complete in its description is efficient while providing information for appropriate patient care. The objective of HIPPA is the portability of medical information, ostensibly eliminating repeat tests from provider to provider and inappropriate medication tracking.

The Global Context

There is also a global play in the use of ICD-10. How embarrassing is it that the U.S. is the only civilized country not using ICD-10 today? In fact, the planned deployment for ICD-11 internationally is 2015. The U.S. is unable to take advantage of global comparisons in disease management like other countries because we just don't speak the same medical language in classifying diseases and injuries. This is valuable information for car manufacturers all over the world to have in consistency of creating safer vehicles.

ICD-10 will actually inform the side of the body injured in an auto accident or whether the burn received by the patient was from an airbag deployment. If we are discussing value, then look to the pertinent information applicable to P&C insurers instead of erroneous, off-the-cuff examples. Undeniably, ICD-10 will impact more products and safety considerations for consumers. As an example of conciseness for P&C claims, we deal with a high volume of “whiplash” injuries or “cervical sprain/strains.” The current ICD-9 code for this injury is 847.0, whereas ICD-10 creates two separate codes that distinguish between the soft tissue affected by this type of injury:

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

The distinction in ICD-10 has separated the ligament from other soft tissues in the neck. This distinction may provide more insight into the severity of an injury and treatments that are most appropriate due to the specificity. Other codes in the ICD-10 injury section have more complete descriptions, thereby allowing the provider to describe the injury and the site of injury in greater detail. This additional information will result in efficiency gains between the insurer and the medical provider, as less clarification and back-and-forth communication will be necessary.

Some Benefits and Challenges

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

• Decreased administrative burden. Provider staff will spend less time making copies and responding to requests for additional documentation.
• The new codes are distinct with a focus on outcomes they provide a key concept in coordination of care.

Perhaps the greatest challenge with implementation is the coordination of all aspects of readiness. ICD-10 touches many areas of provider and carrier business, and the impact cannot be minimized. To date, creating a program around the multiple areas that use the code sets and then building an effective program to ensure compliance have been the most valuable aspects of successful execution. Providers may nevertheless experience issues in several areas during the implementation process. Fortunately such issues can be mitigated with proper management, including:

• Payers may delay payments because of readiness issues. Carriers need to be able to handle the costs associated with changes in accounts receivable timelines.
• Providers will most certainly take a productivity hit. This has been proven in many studies, as well as while observing countries such as Canada in its implementation experience. The effect can, however, be lowered with proper training, practice, implementation of electronic health records, and the use of computer-assisted coding software.
• ICD-10 code sets require knowledge to operate and apply successfully. Providers may encounter a mixed bag of frustration and enthusiasm from office staff.
• Office and hospital staff will also likely be addressing issues stemming from the payer failing to pay bills properly. These issues can definitely be morale- changers.

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

• The operational impact to medical bill review because the ICD-10 code sets are so detailed. As a result, there is opportunity for either more straight-through claims processing or to investigate a greater number of claims based on specific criteria.
• Carriers will receive code sets even after the implementation date of October 1, 2014. This may happen because the provider is not a covered entity under HIPAA, or if it has an exemption. Either way, carriers must be versatile enough to handle both situations and pay bills accordingly.
• Did you miss an internal area that uses ICD-10 during your assessment phase? If so, then just make the fix. It is also important to establish the expectation that there may be unknowns in order to minimize frustration within your teams.
• Carriers will need to understand any gaps in bill review systems after ICD-10 code set implementation. This is because some edits in bill review systems were done because ICD-9 was so non-specific that  it created more work to review the care.

Who Is Ready Then?

A recent snapshot survey by Aloft Group,¹ a Newburyport, Mass. healthcare branding and marketing firm, found that 74.6 percent of respondents are 25-percent or less completed in the ICD-10 code set conversion. The biggest complaint or reason for not being farther along was time and limited financial resources (71 percent). Overall, the majority felt they would meet the 2014 deadline (55.4 percent), while some were concerned (37.3 percent). Sixty-one percent of respondents felt one of the most important aspects of a system that uses ICD-10 was the ability to run dual reporting (ICD-9 and ICD-10) followed by assistance with formalized user training plan and education to improve physician acclimation (57.7 percent).

Best Practices

Certain areas outlined above are crucial for readiness with ICD-10 implementation. Best practices can only be achieved by utilizing the industry information where multiple guides for providers and carriers are available to manuever the multiple changes that are heading our way. Ask any vendor that integrates with your system and currently provides ICD-9 codes what it is doing to ensure readiness, and how it plans to connect all the various streams together to ensure a successful transition to this mandatory change.