February 25, 2008
The President’s budget request for fiscal 2009, released earlier this month, has revived the initiative to switch the Medicare program from the ICD-9 coding system to ICD-10 and proposes new spending of $40.3 million for the transition to be completed by 2011.
The switch will be a major undertaking for the Centers for Medicare & Medicaid Services, the budget notes, including revision of instruction manuals, claims processing systems, medical software, and analyses. To implement ICD-10, current HIPAA transactions must first be upgraded from version 2010 to 5010, which accommodates increased space for the ICD-10 code sets.
To finance the transition, the President seeks:
- $17.9 million for ICD-10 implementation, planning, and pilot testing.
- $15.6 million for ICD-10 systems changes.
- $6.8 million for upgrading to Version 5010.
In defense of the turnover to ICD-10, CMS says the ICD-9 code set does not provide detailed information about a patient’s diagnosis or the procedure or test that a provider orders, making it necessary to conduct a detailed medical review to see if a claim was paid improperly. The ICD-10 code set is much more specific, CMS says, making it easier to determine if a claim was appropriately billed.
Nor does ICD-9 provide the specificity needed for value-based purchasing, according to CMS. Such a purchasing program considers both quality and cost of care over an appropriate period of time. ICD-10 provides very specific data about a patient’s diagnosis and the procedures performed. "As a result, payers can ascertain if additional services were performed due to provider error and if cost savings can be achieved by refusing to pay for provider errors," CMS says.
Moreover, CMS says it will run out of ICD-9 procedure codes sometime in FY 2009. Thus, providers will not be able to submit electronic claims as required by HIPAA for new procedures and payers. As the ICD-9 code set expires, it will be impossible to continue to be HIPAA-compliant, CMS notes.
Clinical labs and other providers "dodged the ICD-10 bullet" in 2006 when legislative proposals to mandate the switch from ICD-9 by 2009 failed to clear Congress. CMS did indicate at the time, however, that it could require the switch administratively. And at press time, the agency reportedly is seeking regulatory clearance to soon publish a Notice of Proposed Rulemaking that would carry out the President’s plan.
The International Classification of Diseases (ICD), version 10, was endorsed by the 43rd World Health Assembly in May 1990 and came into use in WHO member states beginning in 1994. All G-7 countries use it, except the U.S. The ICD system is the international standard diagnostic classification for all general epidemiological and many health management purposes. It is used to classify diseases and other health problems recorded on many types of health and vital records, including death certificates and hospital records. In addition to enabling the storage and retrieval of diagnostic information for clinical and epidemiological purposes, these records provide the basis for compilation of national mortality and morbidity statistics by WHO member states.
| Major Differences Between ICD-9 & ICD-10 |
|
ICD-9 |
ICD-10 |
| Diagnosis Codes |
|
|
| # of Characters |
3-5 Alphanumeric |
5-7 Alphanumeric |
| # of Codes |
15,000 |
120,000 |
|
|
|
| Procedure Codes |
|
|
| # of Characters |
3-4 Numeric |
7 Alphanumeric |
| # of Codes |
4,000 |
200,000 – 450,000 |
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February 25, 2008 - Table of Contents
