1. ICD-10 and Health Care Quality
Denise M. Buenning , MsM
Acting Deputy Director
Office of E-Health Standards and Services (OESS)
Centers for Medicare & Medicaid Services (CMS)
October 3, 2012

2. Topics to Be Covered Brief history of ICD-10
New ICD-10 compliance date
Overview of ICD-10
Differences between ICD-9 and ICD-10
ICD-10 and health care quality
CMS resources
Key takeaways
Today, I will start out with a brief history of ICD-10 to provide context for the events leading up to where we are today. I will also give a brief overview of ICD-10 and how it differs from ICD-9, and then discuss how ICD-10 has the potential to improve health care quality. Lastly, I’ll offer a brief overview of how to prepare for ICD-10 and the resources available from CMS on ICD-10. I’ll close by recapping the key takeaways of this presentation.

3. Brief History of ICD-10
August 2008: HHS publishes proposed rule with October 1, 2011 compliance date; asks for industry feedback
January 2009: HHS publishes final rule with October 1, 2013 compliance date based on industry feedback; also pushes back Version 5010 compliance to January 1, 2012
January 1, 2012: Compliance deadline for Version 5010; enforcement discretion period issued until June 30, 2012
February 15, 2012: The Secretary announces HHS’ intention to delay ICD-10
April 17, 2012: HHS publishes proposed rule to delay implementation of ICD-10-CM and PCS until October 1, 2014
In August 2008, CMS published the proposed rule calling for an October 2011 compliance date, and then in January 2009, we published a final rule setting the date for 2013, based on industry feedback. In 2009, the October 1, 2013, date became a reality, and all of us—CMS and the entire health care industry—began marching down the path toward October 2013.
On January 1, 2012, Version 5010 became the standard for electronic transactions since Version 5010 can accommodate ICD-10 codes. However, we issued an enforcement discretion period until June 30, 2012, to give the health care industry more time to complete their upgrades. Now, the majority of the health care industry has upgraded to Version 5010.
Based on the results of the Version 5010 transition and other industry feedback, Secretary Sebelius announced HHS’ intention to delay ICD-10. And on April 17, HHS published a proposed rule in the Federal Register to delay ICD-10 for one year, until October 1, 2014.

4. New Compliance Date
August 24, 2012: HHS publishes final rule delaying the compliance deadline for ICD-10-CM and PCS from October 1, 2013 to October 1, 2014.
Why the delay?
On August 24, 2012, HHS issued a final rule making the one-year proposed delay for ICD-10 official.
For industry watchers, the signs were there, and it was not any one group or any single factor that led to this decision. Rather, it was a series of events and issues that, combined, clearly indicated the need for more time for ICD-10.The first sign was Version 5010 implementation. Because Version 5010 was considered an “upgrade” to the existing Version 4010 standard, there was a pervasive opinion throughout the industry that it would be an easier transition than ICD-10. However, we didn’t account for a number of things. The errata that corrected some typographical and other errors set back vendor readiness, which in turn set back product delivery and installation. The change in front-end edits from the testing to production mode caused additional issues, and we found that standards are still subject to interpretation, which added an additional layer of complexity.
CMS listened to the industry feedback regarding delayed or in some cases non-payment problems for providers, leading to the potential of providers not meeting rent or payrolls and shutting down operations. This negative impact on patient care access was a primary consideration in our ICD-10 decision. If this was the potential outcome for Version 5010, what would the exponential impact be for ICD-10? We estimated, based on CMS surveys and industry intel, that up to 25% of providers—or payments for about 5 million claims a week—could be jeopardized.
But providers weren’t the only ones. Other industry segments, while publicly expressing confidence of meeting the October 2013 deadline, admitted after the delay announcement that some of their members would benefit from additional time. And then we had to consider other initiatives, such as meaningful use and the incentive payment program, and their overlying requirements and demands. So then the question became, how long? The one-year delay proposal was reached after much examination of the industry’s ability to comply with the 2013 date, based on our own CMS readiness survey done late last year, the ongoing Version 5010 implementation issues, and feedback from the provider community that indicated as many as 25% of that population would not be ready for ICD-10. This would translate into millions of claims per week being rejected, potentially cutting off patient access to quality care if providers were forced to close their doors because of non-payments. And patient care is ALWAYS our first and foremost consideration.
We believe that the one-year delay timeframe balances the industry’s “need to know now,” gives small provider practices and other entities additional time, and does not penalize those entities that have already invested considerable time, effort, and resources predicated upon an October 2013 date.

5. Overview of ICD-10 ICD-10 CM/PCS consists of two parts:
ICD-10-CM for diagnosis coding in all health care settings
ICD-10-PCS for inpatient procedure coding in hospital settings
CPT coding for outpatient and office procedures is not affected by the ICD-10 transition
ICD-10 replaces the ICD-9 code sets and includes updated medical terminology and classification of diseases.
ICD-10 refers to the diagnosis and procedure code sets, and consists of two parts, the CM and the PCS.
ICD-10-CM is for use in all U.S. health care settings.
ICD-10-PCS is for use in U.S. inpatient hospital settings only.
These code sets allow for more specific coding than the general ICD-9 code sets. To understand the impact of the transition, we’ll let the numbers speak for themselves: The ICD-9 code set is made up of approximately 15,000 codes and the ICD-10 code set includes about 150,000 codes. You may have to use multiple ICD-9 codes to describe a diagnosis or procedure. However, with ICD-10, you will be able to choose from an array of more descriptive and accurate codes. It is similar to a phone book: you certainly are not going to use every phone number in the book, but when you are looking for a particular number, it is there for you. It is the same with ICD-10: you won’t use all the codes all the time, but they are there if you need them.
It is also important to note that CPT coding for outpatient and office procedures will not be affected by any of these transitions.

6. ICD-10-CM ICD-10-CM replaces ICD-9-CM for diagnosis coding:
ICD-9-CM diagnosis codes = 3 to 5 digits
ICD-10-CM codes = 3 to 7 digits
Overall format of ICD-10 diagnosis codes similar to ICD-9
Based on structure, there is an increase in the number of digits in ICD-10, from a maximum of 5 now to a maximum of 7. But overall, the format is similar to that of ICD-9.

7. ICD-10 PCS ICD-10-PCS replaces ICD-9-CM inpatient procedure coding:
ICD-9-CM procedure codes = 3 to 4 numeric digits
ICD-10-PCS codes = 7 alphanumeric digits
ICD-10-PCS code format substantially different from ICD-9
Unlike ICD-9, ICD-10 expands details for many conditions
ICD-10-PCS will be used only by hospitals for inpatient procedure coding. It is substantially different from ICD-9’s Volume 3 in that is has a very different format and is very expansive to account for more detail. It will account for advances in medical procedures, such as orthoscopic surgery and laser procedures and has room to accommodate yet newer advances later on.

8. ICD-10 and Health Care Quality
More important than just a format change, ICD-10 will provide better data for evaluating and helping providers improve the quality of care they give their patients. The data captured can be used in more “meaningful ways” to better understand disease complications and track care outcomes.
Let’s talk about some specifics.

9. ICD-10 Integration with EDI
The connections among CMS’ e-health initiatives are unmistakable—
Interoperability requires the use of uniform health information standards such as ICD-10, given the level of structured documentation required to achieve EHR meaningful use, which involves the use of electronic quality measures (eQMs).
Healthcare EDI and interoperability—including the monitoring and enforcing electronic health information exchange standards—is an essential component of a national health information infrastructure. Clinicians everywhere can have a longitudinal medical record with full information about each patient. Consumers will have better information about their health status in an interoperable world that is made possible through personal health records and similar access strategies, such as mobile health applications via ubiquitous smartphones and touch-screen tablets. Consumers can move more easily between and among care settings without concern that their information is lost. Payors can benefit from the economic efficiencies, fewer errors, and reduced duplication in the reimbursement process. Interoperability also underlies meaningful public health reporting, bioterrorism surveillance, quality monitoring, advances in clinical trials, and healthcare policy decisions.
The connections among CMS’ e-health initiatives are unmistakable—interoperability requires the use of uniform health information standards such as ICD-10, even SNOMED and LOINC given the level of structured documentation required to achieve EHR meaningful use, which involves the use of electronic quality measures (eQMs).

10. Impacts of ICD-10 on Quality
This is what we lovingly refer to as the “Spider” slide because it shows the many impacts of ICD-10 on the various quality data reporting systems of CMS and other entities as well. This demonstrates that ICD-10 isn’t an isolated, stovepiped initiative that affects only reimbursements. It impacts so many other areas and as data reporting becomes more common, such as with meaningful use, the use of the ICD-10 codes takes on even more significance.

11. ICD-10, Health Care Quality
ICD-10 better reflects current medical practice and provides more specific data than ICD-9
ICD-10-CM:
Describes left vs. right, initial vs. subsequent encounter, routine vs. delayed healing and nonunion vs. malunion
ICD-10-PCS:
Provides detailed information on procedures and distinct codes for all types of devices
Structure accommodates addition of new codes
The current coding system is running out of capacity and cannot accommodate future state of health care
The transition from ICD-9 to ICD-10 codes allows 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, the coordination of patient care, and more accurate billing.
Let me give you an example. A patient is diagnosed with a brain tumor. The ICD-9 code set would give you a general code for that particular diagnosis. With the ICD-10-CM code set however, it will give you a more specific diagnosis code by allowing you to choose between the left and right hemisphere and whether this is a first occurrence or a reoccurrence, etc. all within one medical code, instead of having to add additional explantory codes in ICD-9 which may or may not be as accurate as the provider might like.
Here’s another example: a patient comes into the hospital with an arrhythmia, and needs to have a pacemaker inserted. The ICD-9 code set does not have a specific code for a pacemaker. However, the ICD-10-PCS code set gives distinct codes for all types of devices and does not generalize like the ICD-9 code set.
Moreover, the structure of ICD-9 limits the number of new codes that can be created, and many ICD-9 categories are full. ICD-10 can accommodate new codes, and this increased capacity is greatly needed, considering the rapid advances in modern medicine.

12. ICD-10, Health Care Quality
ICD-10 codes will provide better data. This will allow:
Better analysis of disease patterns
Improved public health tracking
Better detection of fraud and abuse
Identification of specific reasons for patient non-compliance
Detailed data on injuries, accidents
Due to the increased specificity and exactness, ICD-10 codes will provide better data to improve the management of patient care and to better describe new diseases.
Now we’ve all head the silly stories about how ICD-10 includes what appears to be some very unusual – and useless – diagnosis codes, such as “V9027XA Drowning and submersion due to falling or jumping from burning water-skis, initial encounter“ Of course, we find it difficult to imagine a scenario in which water-skis ignite. Unless you happen to live in Florida and make your living as a water ski trick artists at a water theme park. Or "V97.33XS Sucked into jet engine, sequela." One would think that the only sequela of someone being sucked into a jet engine would be hamburger.  Yet there are lots of folks who work at airports, aircraft carriers and the like, and while we hope this never happens to them, if it does, there’s a code for that. But all kidding aside, increasing the detail and better depicting severity will also help clarify the connection between a provider’s performance and the patient’s condition. Having the additional detail will also help to improve the ability to measure outcomes and ultimately improve the quality of care. For example, changes include expanded obstetric codes that identify trimester, a diabetes category that incorporates codes for whether the condition requires insulin, and an expanded section of postoperative complications, among others. These changes will assist in important initiatives to improve the quality of obstetrics and perinatal care, and reduce the incidence of birth trauma. (Source: 3M)
ICD-10 will also help improve the ability of public health officials to track diseases and threats. 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.
Increased specificity will also allow for more precise methods of detecting fraud. With more specificity, it will be tougher to lump patients into a more severe or procedure category with a higher paying code. ICD-10, for example, features a way of identifying each side of the body. If a patient seems to be having numerous procedures on the same foot, either the treatment "isn't effective" or it may be a billing mishap. This will help with fraud because payers can check for multiple encounters/treatment for the same anatomical site. (Source: Health Leaders Media article)
ICD-10 also helps specify reasons for patient non-compliance. Providers are more and more being held accountable for patient outcomes, and a major concern is how to classify the patient who fails to follow a recommended regimen of care and gets sicker as a result. Under ICD-9, there is only one code for such a patient. But in ICD-10, there are at least eight codes. For example, one of the eight codes indicates these variations: "Intentional underdosing due to financial hardship,“ "Unintentional underdosing due to age-related debility,“ and "Non-compliance with renal dialysis.“ (Source: Health Leaders Media article)
Another area where ICD-10 can potentially improve quality is data on injuries and accidents. ICD-10 allows for detailed data on injuries, such as where they occur, what part of the body was injured, and what implements were used, alerting providers to common dangers. (Source: Health Leaders Media article)

13. ICD-10, Health Care Quality
Data captured through ICD-10 codes will also allow:
Tracking health care-associated conditions
Specification of procedures by degree of difficulty
More precision in reporting complications from medical devices
The ICD-10 codes allow much greater explanation and accountability for adverse events that can occur within health care organizations. For example, there are at least 50 categories for a foreign object, whether the patient came in with it or not. And if a fall or other mishap occurred within a hospital, the location is specified as the bathroom, cafeteria, corridor, the operating room, or the patient's room. (Source: Health Leaders Media article)
The new codes allow certain procedures to be subdivided by difficulty. Under ICD-9, there is only one code for artery suture, but in ICD-10, there are 195: four different approaches and 67 possible arteries. Though some are far more difficult than others, under the current code set, they are all lumped together. (Source: Health Leaders Media article)
The new codes also allow for more precision in reporting complications from medical devices. In the current system, a patient death or serious disability due to a device malfunction or breakdown is classified as 996.1: Mechanical complication of other vascular device, implant, and graft. ICD-10 allows providers to be much more precise in describing the nature of the malfunction. The new code differentiates whether there is a mechanical breakdown of a vascular dialysis catheter, an arteriovenous shunt, a balloon counterpulsation device, or an umbrella device. (Source: Health Leaders Media article)
Sources
Health Leaders Media article:
3M:

14. Using ICD-10 Data to Drive Quality Improvement
ICD-10 data can be used to drive organizational change for quality improvement
Providers and payers can more easily identify patients in need of disease management
Organizations can develop more effective and tailored disease management programs
Existing technologies, systems, and processes can be evaluated and redesigned to enhance patient care
The rich data captured from the ICD-10 codes can be used to drive organizational change for quality improvement. For example, the expanded detail will help providers and payers more easily identify patients in need of disease management, as well as help organizations to develop more effective and tailored disease management programs. The data can also help organizations to evaluate and redesign existing technologies, systems, and processes to enhance patient care. (Based on 3M article)

15. Preparing for ICD-10 CMS ICD-10 Resources
So the bottom line is that we have two years until ICD-10 goes into effect. What should we be doing to prepare? CMS has been working on this since 2007, to get our own systems and business processes transitioned to ICD-10. For us, it is a massive effort, involving 68 different IT systems, just as many business processes, and the smaller stuff – like changing over all of our manuals, forms, etc. For providers, there are varying levels of complexity. Of course, hospitals bear the brunt of ICD-10, in that they must transition to both code sets, both diagnosis and procedure. Their systems, processes, operations, all will be affected and there will be losses of productivity among all providers for a minimum of 6 months, likely longer, until everyone gets more familiar with ICD-10. For small providers, there is confusion as to what this means and how to approach it. So here are some suggestions.

16. Preparing for ICD-10
Identify your current systems and work processes that use ICD-9 codes
Communicate implementation plans between providers, payers, and vendors
Identify potential changes to workflow and business processes
Budget for time and money related to the implementation
Allow enough time to test transactions
Assess staff training needs
Due to the impact of these codes on such a wide variety of processes and systems, it is important to get organized early. If you are responsible for large to medium sized physician practice where the organizational structure is multi-level, obtain management support and put a structure in place, such as an ICD-10 committee, to coordinate your efforts across your organization. Identify where ICD-9 codes appear in your systems, business processes, forms, manuals, etc. Bring together your office or organization, and assign responsibility for affected areas. Check with your vendors and see what they have to offer for systems changeovers, education, and other resources. Also check with your professional associations to see what information, training and resources they have available. The larger the organization, the more “moving parts” there will be to the ICD-10 transition.
CMS, as a covered entity, has had to do the same for its Medicare and Medicaid programs, and our resources, including links to professional association websites, are posted to our CMS website at
But what if we’re talking about a small family practice in Lawrence, Kansas? They have no IT group, no divisions. It’s just a medical office with perhaps less than 10 physicians, an office manager and some nurses or clinical registered nurse practitioners or PAs. Their IT support is their vendor who comes in to install their billing system, or the office manager who installs the new computers over the weekend and hopes that the software works. Well, the same steps apply but using a common denominator. Step one: have a staff meeting. Step two: have everyone look at the forms, computer screens and other things that they do every day and identify where they see ICD-9 codes now. It is on a superbill, page capture, or a lab order? If you have to change your codes, what are the codes you use most frequently? Who on your staff needs to code and therefore, get training? Is the training available online through your association, professional association, or if travel is involved, can you pool your resources with another practice, send one person to training and share the expense, and then have that person come back and train others? It is recommended that training take place about six months before the October 1, 2014 deadline so that staff won’t lose their knowledge from not being able to use the codes until that time – use or lose, so to speak.

17. CMS ICD-10 Website www.cms.gov/icd10
CMS has a page on its website dedicated to ICD-10. The address is This is the central location of all CMS materials concerning ICD-10. The links on the left side of the screen are broken into different categories of information such as Provider, Payers, and Vendors to name a few. You can also sign up to receive ICD-10 Updates, as well as alerts when new information is posted on the Latest News page.
We encourage you to please use the resources available!

18. ICD-10 Email Updates To sign up: Go to http://cms.gov/icd10
Select CMS ICD-10 Industry Updates from the left navigation bar
The CMS ICD-10 Industry Updates provide subscribers timely information about the ICD-10 transition. Each message is delivered directly to the subscriber’s inbox, supplying helpful reminders and tips, information on new resources, and ICD-10 news.
You can sign up to receive these updates by visiting the CMS ICD-10 website ( and selecting “CMS ICD-10 Industry Updates” located on the left side of the web page. Previous updates are available in the “Downloads” section of the “CMS ICD-10 Updates” web page.

19. CMS ICD-10 Teleconferences
CMS hosts national provider education teleconferences to help the provider community prepare for the U.S. health care industry's change from the ICD-9 to ICD-10 medical coding system. All teleconferences are free of charge, and you must register to participate. To obtain registration information for an upcoming event, or to obtain the presentation materials, written transcripts, and audio recordings from a previous event, visit the CMS ICD-10 website and select “CMS Sponsored ICD-10 Teleconferences” from the navigation bar on the left.

20. CMS ICD-10 Fact Sheets
CMS developed fact sheets for providers, vendors and payers. They can be found in their respective section of the ICD-10 web page in PDF format. These are brief, one-two page pamphlets that can be distributed throughout your organization or at events.

21. Implementation Handbooks
CMS developed four Implementation Handbooks to assist with the transition to ICD-10. These handbooks are step-by-step guides specifically for small to medium provider practices, large provider practices, small hospitals, and payers. In the coming months, we’re going to be coming out with even more practical information, such as decision trees and checklists.
The appendix of each handbook references relevant templates, which are available for download in both Excel and PDF files. The templates are customizable and have been created to help entities clarify staff roles, set internal deadlines/responsibilities, and assess vendor readiness.
Note: The ICD-10 implementation handbooks are based on the October 1, 2013, implementation date. CMS will be updating all the materials to reflect the new deadline. Sign up for updates and check back to the CMS website regularly for new resources.

22. Widget/Timelines
The widget can be viewed in an interactive format or downloaded and viewed as a PDF
CMS developed a widget and printer-friendly timelines to help guide vendors, payers, and large and small practices through the implementation steps.
The interactive widget is a user-friendly tool that can help those transitioning to ICD-10 stay on top of approaching transition deadlines and know the appropriate steps to take and when. Users can select the group that best suits them from the main menu and identify the steps that they should take to prepare.
The compliance timelines display the same information as the widget, but allow you to print up a sheet with each of the benchmarks organized by their recommended dates. These timelines can be distributed as informational materials, and can supplement the online widget.
Note: These resources are based on the October 1, 2013, deadline and will be updated to reflect the new October 1, 2014, compliance deadline. Check back to the CMS website and sign up for updates.

23. Key Takeaways ICD-10 is foundational to EDI
ICD-10 will provide better data for evaluating and improving the quality of patient care
Organizations should be taking steps now to prepare for ICD-10
Visit the CMS ICD-10 website for information and resources on ICD-10
ICD-10 will provide greater specificity and exactness in describing a patient’s diagnosis and in classifying inpatient procedures. The new codes will also accommodate newly developed diagnoses and procedures, innovations in technology and treatment, performance-based payment systems, the coordination of patient care, and more accurate billing. The additional detail provided by ICD-10 codes will improve the ability to measure outcomes and ultimately improve quality of care.
Making the switch to ICD-10 requires business, clinical, and system changes throughout your practice or organization, which is why it is important to prepare for the transition now.
CMS has resources and tools to help your organization make the switch to ICD-10. Be sure to check back to our website regularly for new information and resources, and don’t forget to participate in our national provider education teleconferences on ICD-10. Also sign up for the CMS ICD-10 Updates for weekly updates on ICD-10.

24. Questions?