Switch to ICD-10 codes could be costly

WASHINGTON—In August, the federal government announced a proposal to update the nation’s healthcare coding system that identifies medical diagnoses and procedures, but a new study found the plan would significantly increase costs for physician practices.

A number of healthcare groups—including the American Academy of Professional Coders—have called on the U.S. Department of Health and Human Services to “reassess its plan to rapidly adopt ICD-10 and extend the implementation time frame.” The plan is currently set to be implemented by 2011.

These groups argue that the costs of implementing ICD-10 in a short timeframe will cost more than estimates by the Centers for Medicare & Medicaid Services and could strain the resources of healthcare providers.

Read the proposed rule HERE. HHS is accepting comments until Oct. 21.

Updating the Old Codes

On Aug. 22, HHS proposed a regulation that would replace current ICD-9-CM codes used to report healthcare diagnoses and procedures with an expanded set of codes, called ICD-10, by Oct. 1, 2011. ICD stands for International Classification of Diseases and is written by the World Health Organization. Many other industrialized nations have already adopted the updated set of codes.

ICD-9, developed nearly 30 years ago, contains approximately 17,000 codes. Health plans, healthcare clearinghouses and healthcare providers that transmit information electronically are required to use ICD-9 codes by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

HHS estimates ICD-9 will start running out of available codes next year as new diagnoses and procedures are developed. The ICD-10 codes contain more than 155,000 codes.

“The greatly expanded ICD-10 code sets will enable HHS to fully support quality reporting, pay-for-performance, bio-surveillance and other critical activities,” HHS Secretary Mike Leavitt said in an August new release. In addition, HHS has argued that the codes will help implement electronic health records “because they will provide more detail in the electronic transactions.”

“We recognize that the transition to ICD-10 will require some upfront costs, but each year of delay would create additional costs, both because of the limitations of ICD-9 and because of the need to employ the greater precision that ICD-10 codes provide to support value-based purchasing of healthcare initiatives,” said Kerry Weems, acting administrator for the Centers for Medicare & Medicaid Services.