1. ICD-10 Planning and Assessment
Training Segment 1
What Is ICD-10

2. Segment 1 What Is ICD-10?
This segment provides an explanation of the ICD-10 Code Set and how it differs from ICD-9
This is the first segment of our training series. This segment provides an explanation of the ICD-10 code set and how it differs from the currently used ICD-9 code set, along with some examples. We will also go into detail about why this is such a major change for the health care industry

3. Where Are We Now?
ICD-9-CM required for use in administrative transactions
Diagnoses
Inpatient Hospital Procedures
ICD-9-CM has been in use for many years; required since Oct 2003 by HIPAA
In our current systems, we are required by HIPAA to use a standard code set to indicate diagnoses and procedures on transactions. For diagnoses, we use the ICD-9-CM code set. For inpatient hospital procedures, we use the ICD-9-CM procedure code set. For other types of procedures, we use CPT or HCPCS codes. We will be discussing the soon-to-be required ICD-10-CM codes for diagnoses and ICD-10-PCS codes for inpatient hospital procedures. There are no plans to radically change the CPT or HCPCS code sets at this time.

4. What Is ICD-10?
ICD-10 is the updated version of codes used for coding:
Diagnoses for all providers (ICD-10-CM)
Inpatient hospital procedures (ICD-10-PCS)
ICD-10-CM is the US “clinical modification” of the WHO ICD-10 code set
ICD-10-PCS is a U.S. creation
These are “classification” code sets
ICD-10 is an updated version of the ICD-9 code sets. The ICD-10 code set was originally developed by the World Health Organization (WHO). Several countries have taken this code set and modified it for use in their medical systems. The United States, through the National Center for Health Statistics, has developed the ICD-10-CM (or clinical modification) of the code set for use in this country. The Centers for Medicare and Medicaid Services has created a new code set, ICD-10-PCS, for use. These code sets are considered classification code sets. They are at a higher level of information than some other medical code sets like SNOMED.

5. So, What Is the Big Deal with ICD-10?
Codes change every year anyway
Systems and business processes are updated to handle these code set changes
Transaction version changes (X12 version 5010) will be in place to handle the codes
Why not business as usual?
In our systems, we generally update code sets once a year, sometimes more often. We have been making these changes on a regular basis. As new codes are added and others are retired, we have been updating our procedures and systems to take account of the code changes. Furthermore, we are presently working on the implementation of updated HIPAA transactions (X12 version 5010, NCPDP version D.0). So, why is there so much attention being focused on implementing these new code sets?

6. Major Changes from ICD-9 to ICD-10
Not just the usual annual update
ICD-10 markedly different from ICD-9
Requires changes to almost all clinical and administrative systems
Requires changes to business processes
Changes to reimbursement and coverage
Will enable significant improvements in care management, public health reporting, research, and quality measurement
Why
Unlike the usual annual updates, the ICD-10 codes are markedly different than the ICD-9 codes. And because these codes are used in almost every clinical and administrative process and system, these will have to adjust. The updated code sets will allow, and in fact will require, significant changes in the way we reimburse services, and in the way that we determine coverage for services. We will now spend some time looking at the new code sets, and explaining the differences.

7. Specific Changes Diagnosis Codes (ICD-9 to ICD-10-CM)
From 5 positions (first one alphanumeric, others numeric) to 7 positions, all alphanumeric
From 13,000 existing codes to 68,000 codes
Much greater specificity
Full description and consistency within the code set
Uses modern terminology for descriptions
Creation of combination diagnosis/symptom codes to reduce the number of codes needed to fully describe a condition
First, the ICD-10-CM diagnosis code set. How is it different?
The code set has been expanded from 5 to 7 positions.
The codes use alphanumeric characters in all positions, not just the first position as in ICD-9.
As of the latest version, there are 68,000 existing codes, as opposed to the 13,000 in ICD-9.
The new code set provides a significant increase in the specificity of the reporting, allowing more information to be conveyed in a code.
The terminology has been modernized and has been made consistent throughout the code set.
There are codes that are a combination of diagnoses and symptoms, so that fewer codes need to be reported to fully describe a condition.
We will be looking at several examples of the ICD-10-CM code set that will help illustrate these factors.

8. Specific Changes Enables laterality (right vs. left designations)
It makes a difference whether the right or left limb is the subject of the problem
Restructures reporting of obstetric diagnoses
In ICD-9-CM, the patient is classified by diagnosis in relation to the episode of care.
In ICD-10-CM, the patient is classified by diagnosis in relation to the patient’s stage of pregnancy
The code set has been enhanced to enable providers to report diagnoses and conditions, which can be differentiated as occurring on the left or right side of the body (e.g., left arm, left kidney, left eye). There has been a change in the obstetric diagnosis reporting, which requires the provider to indicate the trimester of the patient.

9. Difference in Organization
The ICD-10 codes are organized differently than the ICD-9 codes
Example:
Sense organs have been separated from nervous system disorders
Injuries are grouped by anatomical site rather than injury category
Postoperative complications have been moved to procedure- specific body system chapter
The ICD-10 code set has also been organized somewhat differently than ICD-9, primarily to bring it up to date with modern medicine and the requirements of the industry to clearly identify particular conditions. Some examples of this are that sense organs are now separate from nervous system disorders; injuries are grouped by anatomical site (e.g., injuries of the head, injuries of the leg) instead of an injury category (fracture, bruise); and postoperative complications are now part of the specific body system chapter.

10. Structure of ICD-10
So, this is what an ICD-10 code set looks like. The major category is identified in the first three characters, a further sub categorization and more information is included in the next three characters, and the last character is used for several extensions such as laterality (right or left).

11. Examples of ICD-10-CM Specificity
Diabetes mellitus (ICD-9-CM category 250) has been split into different category codes in ICD-10-CM
E08 Diabetes mellitus due to underlying condition
E09 Drug or chemical induced diabetes mellitus
E10 Type 1 diabetes mellitus
E11 Type 2 diabetes mellitus
E13 Other specified diabetes mellitus
Diabetes mellitus codes are expanded to include the classification of the diabetes and the manifestation
E08.22, Diabetes mellitus due to an underlying condition with diabetic chronic kidney disease
E09.52, Drug or chemical induced diabetes mellitus with diabetic peripheral angiopathy with gangrene
E10.11, Type 1 diabetes mellitus with ketoacidosis with coma
E11.41, Type 2 diabetes mellitus with diabetic mononeuropathy
Let’s now take a look at several specific examples of ICD-10 codes, hopefully those that are of interest to State Medicaid programs. Diabetes provides a good example of the increased specificity of the code set. As you can see, there is a much better description of the diabetes condition, including how the disease may have manifested itself in the patient.

12. Examples of ICD-10-CM Specificity
ICD-9-CM Hematuria (blood in urine)
ICD-10-CM
R31.0 Gross hematuria
R31.1 Benign essential microscopic hematuria
R31.2 Other microscopic hematuria
R31.9 Hematuria, unspecified
Here is a good example of how an abnormal urinalysis diagnosis is made more specific. Note the existence of the Hematuria unspecified code. Guidelines still exist that require providers to report to the highest level of specificity possible.

13. Examples of ICD-10-CM Specificity
Sports injuries now coded with sport and reason for injury
ICD-9 code - Striking against or struck accidentally in sports without subsequent fall (E917.0)
24 ICD-10-CM Detail Codes
The sports injury code provides a wonderful example of the increased amount of information contained in ICD-10 codes. In the ICD-9 diagnosis code set, look at this one code for sports injury. However, in ICD-10 there are 24 codes that can be used to represent this same condition!

14. Examples of ICD-10-CM Specificity
W21.00 Struck by hit or thrown ball, unspecified type
W21.01 Struck by football
W21.02 Struck by soccer ball
W21.03 Struck by baseball
W21.04 Struck by golf ball
W21.05 Struck by basketball
W21.06 Struck by volleyball
W21.07 Struck by softball
W21.09 Struck by other hit or
thrown ball
W21.31 Struck by shoe cleats
Stepped on by shoe cleats
W21.32 Struck by skate blades
Skated over by skate blades
W21.39 Struck by other sports
foot wear
W21.4 Striking against diving board
Note that the sport and/or specific equipment is mentioned.

15. Examples of ICD-10-CM Specificity
W21.11 Struck by baseball bat
W21.12 Struck by tennis racquet
W21.13 Struck by golf club
W21.19 Struck by other bat, racquet or club
W Struck by ice hockey stick
W Struck by field hockey stick
W Struck by ice hockey puck
W Struck by field hockey puck
W21.81 Striking against or struck by football helmet
W21.89 Striking against or struck by other sports equipment
W21.9 Striking against or struck by unspecified sports equipment
Continued examples

16. Tonsillitis Example
Acute tonsillitis expanded at the fourth character (to indicate organism) and fifth character (to indicate acute and recurrent) levels in ICD-10-CM
J03 Acute tonsillitis
J03.0 Streptococcal tonsillitis
J03.00 Acute streptococcal tonsillitis unspecified J03.01 Acute recurrent streptococcal tonsillitis
Here, we show the increased information that can now be reported on tonsillitis. Think about how much better information you will have on your claim files and records regarding this common childhood malady.

17. Issue – No Clear Mapping
Not always one ICD-9 to many ICD-10s
Need more specific information to go from ICD-9 to 10
NCHS has published “GEMs,” general equivalence tables
Not a clear map
One of the major issues (and something we will discuss in detail in a later session) is that there is no “easy” mapping or translation from ICD-9 to ICD-10 codes. There are some one-to-one correspondences, but often there are one-to-many, many-to-one, many-to-many, or no correspondence at all. This will be a major implementation consideration. There are some tables that have been published, but much more study needs to be done to determine how coding will change.

18. Specific Changes to Procedure Code Reporting (ICD-9-CM to ICD-10-PCS
New Code Set
A US creation not used anywhere else
Change from 5 to 7 positions
Each position has a specific meaning
Let’s now turn our attention to the ICD-10-PCS procedure code set. Remember that this code set will only be used to report procedures on inpatient hospital claims. Other code sets (HCPCS, CPT-4) will continue to be used to report procedures for other types of claims.
This is a new code set developed in the United States by the Centers for Medicare and Medicaid Services. It is not yet used elsewhere. It is not related to the ICD-10-CM code set.

19. Structure of ICD-10 PCS
As you can see, the position designates a specific meaning. This is consistent throughout the entire code set. For any ICD-10-PCS code, the 4th position, for example, always refers to the body part involved in the procedure.

20. Characteristics of ICD-10 PCS
ICD-10-PCS has four basic characteristics
Allows for unique coding of procedures (easy to distinguish differences)
Room for expansion
Standardized terminology
Consistency in coding from chapter to chapter
The code set was designed to achieve four main goals:
Unique coding for procedures, so that they could be clearly distinguished
Plenty of room for expansion, as new procedures and devices are used
A standardized, well-understood terminology that reflects the current practice of medicine, and
A consistency in coding from chapter to chapter

21. Examples of PCS Code ICD-9-CM (sample code)
47.01 Laparoscopic appendectomy
ICD-10-PCS (sample code)
Laparoscopic appendectomy 0DTJ4ZZ
0 - Medical and Surgical Section
D - Gastrointestinal system
T - Resection (root operation)
J - Appendix (body part)
4 - Percutaneous endoscopic (approach)
Z - No device
Z - No qualifier
Here is an example of an ICD-10-PCS code and how it differs from ICD-9. As you can see, the new code for Laparoscopic appendectomy uses the 7 position structure, with each position having a specific meaning. A code for a similar removal of a different body part should change only in the 4th position.

22. Why Make the Changes? Modernize terminology
Increased information for public health, bio-surveillance, quality measurement
ICD-9-CM running out of codes
Why are we making all of these changes, and what will it accomplish?
First, the practice of medicine has changed dramatically in the last 25 years or so. There have been many new conditions discovered, many new treatments developed, and many new types of medical devices have been placed into service. The ICD-9 code set was not designed to capture all of this progress, and as such, has become bogged down with many types of modifications to attempt to capture information. The ICD-10 code set is much better at describing the current practice of medicine, and has the flexibility to adapt as medicine changes.
Today, there is an increased emphasis on the use of reported information for a multitude of tasks. We look to manage individual care, put them in special targeted programs, track population health, and identify biological threats. We are changing the way we look at providers, attempting to measure not only cost of care, but quality of care in an attempt to manage our health care expenditures. We are asked to justify increasing health care costs by showing improved outcomes and improved health of our population.
And frankly, the ICD-9-CM code set is running out of codes in several of its chapters. While other chapters have some room for expansion, the placing of codes in chapters where they don’t belong is creating confusion for coders and other users of the data.

23. Why Does this Matter?
Diagnoses and procedure codes impact virtually every system and business process in plan and provider organizations, with significant impacts on reimbursements
So, why should all of this matter so much to State Medicaid agencies? Again, isn’t it just a simple matter of replacing one code set for another?
It is not a simple matter. Diagnosis codes and procedure codes permeate almost every business process and system in both plan and provider organizations. Diagnosis codes are key for determining coverage and are used in treatment decisions. From plan design to statistical tracking of disease, these codes are a crucial part of the way we run our programs.

24. Provider Impacts Documentation of diagnoses and procedures
Codes must be supported by medical documentation
ICD-10-CM codes are more specific
Requires more documentation to support codes
Expect a 15% increase in documentation time (per AAPC)
Revenue Impacts of specificity
Denials
Additional Documentation
Let’s look at this first from the provider perspective. We rely on providers to accurately code claims so that processing decisions can be made.
First, providers must learn the new code set. The first step to accurate coding is for the documentation to reflect what the provider has observed. Coding must be supported by medical documentation. Studies of the required documentation have indicated that more documentation is required to support the increased specificity of the code set. We should expect providers to have to spend about 15% more time on asking questions, observing, and documenting their findings to support the ICD-10-CM code set. Even with increased documentation, we can expect, with better coding, an increase in denials or pending claims, and the need for providers to submit additional documentation to support the codes.

25. Provider Impacts Coverage and Payment
New coding system will mean new coverage policies, new medical review edits, new reimbursement schedules
Changes will be made to accommodate increased specificity
May need to discuss changes with patients
As we replace ICD-9 codes with ICD-10 codes, health plans (Medicaid State agencies included) will be revising coverage policies, medical review procedures, and plan design and reimbursement schedules to take advantage of the better information being collected. It is expected that providers will need to change their processes to adapt to the changes, and that there may even be a need to discuss treatment changes with patients. For example, certain conditions may not be covered to the same extent if they can be better identified in terms of specificity. Payments may also change. This will need to be explained to patients.

26. Provider Impacts Relationship with Plans
Coding more specific and includes severity
Changes will be based on new coding, coverage, and reimbursement
Difficult to measure what the changes will mean to overall reimbursement
Plan contracts (or Medicaid coverage policies) will be changed. Providers will adjust, but it will be difficult for them to measure exactly what the changes will mean to their overall reimbursement. This will make for a very challenging first year or two for providers as they move to ICD-10.

27. Provider Impacts Billing and Eligibility Transactions
Updated transactions include support for ICD-10
New codes mean more specificity
How smooth is the transition?
Expect increased reject, denials, and pends as both plans and providers get used to new codes
Recall that we are also making changes to the electronic transactions so that ICD-10 codes can be used in them. However, as we conduct the transactions, we can expect that providers will be faced with many challenges. Most of our HIPAA transitions have been anything but smooth . Providers must expect increased rejects, denials, and pend transactions as they begin using the new codes, and as health plans begin their processing with the new codes.

28. Provider Impacts Laboratory and Pharmacy
Will need specific ICD-10-CM codes for laboratory orders
Expect coverage changes
Need to support the tests/drugs ordered
Transition issues for prior authorizations
Note that laboratories and pharmacies depend on other providers to submit the specific diagnosis codes to them so that they can bill appropriately. Given the expected learning curve for providers on ICD-10 and the expected changes in coverage, labs and pharmacies will have an even bigger challenge than they do today. Diagnosis codes must be able to support the drugs or lab tests ordered, or else the pharmacy or lab will not be paid.
There is an additional transition issue for prior authorization or prescription refills. If the original order or prescription was done with an ICD-9 code (prior to Oct 1, 2013), it must be updated for any service delivered on or after Oct 1, The lab or pharmacy must be able to submit an ICD-10 code once a service is provided on or after Oct 1, 2013.

29. Provider Impacts Laboratory and Pharmacy
Will need specific ICD-10-CM codes for laboratory orders
Expect coverage changes
Need to support the tests/drugs ordered
Transition issues for prior authorizations
There is an additional transition issue for prior authorization or prescription refills. If the original order or prescription was done with an ICD-9 code (prior to Oct 1, 2013), it must be updated for any service delivered on or after Oct 1, The lab or pharmacy must be able to submit an ICD-10 code once a service is provided on or after Oct 1, 2013.

30. Provider Impacts Quality Measures / Pay for Performance (P4P)
New measures need to be determined based on ICD-10-CM codes
Must renegotiate with provider groups
Difficult to measure impact of change – Is it because of code set or because of changes in the underlying practice?
Let’s talk now about the recent efforts to measure quality and adjust payments based on the performance of providers. Many of the performance measures are based on diagnosis codes, or at least are collected based on the diagnosis of the patient. With our changing code set, these measures must be revised. They are often contentious, and are usually discussed with provider groups. Efforts should be underway soon to revise these quality measures.

31. Medicaid Plan Impacts Coverage determinations Payment determinations
Medical review policies
Plan structures
Statistical reporting
Actuarial projections
Fraud and abuse monitoring
Quality measurements
We will briefly review some of the impact on Medicaid programs. Many of these will be covered in detail in later sections of this training package.
Suffice it to say, almost all of your business operations and systems will be impacted. The implementation of the code set will be a daunting task to perform, needing long-term and careful management.

32. Expected Implementation and Operational Steps
Training – not just coders
Program staff
Administrative staff
Systems staff
Business Process Analysis
Where do you use diagnoses/inpatient hospital procedures?
What are the interfaces that may need to be changed?
What databases need to be changed?
This is a long-term project, which will consume considerable resources. Planning is critical. Initial estimates say that it will take all of the time between now and Oct 1, 2013 to effectively implement ICD A structured Work Plan is critical.

33. Expected Timing When can this start?
What other priorities are in line?
What needs to be put aside?
Remember that HIPAA transaction upgrade will also be occurring
What 5010 changes can be done jointly with ICD-10 changes?
How long will this take?

34. Basic Education Sites NCHS – Basic ICD-10-CM Information
CMS – ICD-10-PCS Information
AHIMA - ICD-10 Education
WEDI – ICD-10 Implementation
We have included some web sites that contain basic information on what ICD-10 is, how coding should be done, and some of the key implementation steps and issues. We urge you to monitor these web sites for continued information. Both local and national organizations are looking at this topic, and may have resources for you to take advantage of.

35. Summary The ICD-10 code set differs considerably from ICD-9
The ICD-10 code set conveys significantly more information than ICD-9
The change in code sets has significant impacts on health care providers and Medicaid plans
We have shown that there is considerable difference between the ICD-9 and ICD-10 code sets. These differences provide a challenge and an opportunity for plans and providers in the transition from ICD-9 to 10 and in the use of the new code set.