Sunday, November 25, 2012

ICD-10 The HealthCare Transformation Engine

Before the avid reader or not, reads this blog it is important that I set the right context of what my opinion is about. 

This blog is not about ICD-10 or what it entails. 

This blog is not about current state and future state or fate of HealthCare in US. Nor do I explicitly or implicitly mention my opinions thereof. 

This is my opinion based on factual evidence about why I consider ICD-10 the engine that will transform HealthCare in US (definitely atleast US and maybe more). 

Neither new nor untried, the World Health Organization’s (WHO)1 International Classification of Diseases, 10th Revision (ICD-10) code set is the international standard for disease reporting, surveillance, and mortality. It has been in use by WHO member states since 1994 for classification of clinical, epidemiological,and statistical analysis and quality reporting, and is the basis for national mortality and morbidity statistics. When the United States transitions from ICD-9 to ICD-10, it will be one of the last major countries in the world to adopt ICD-10

There has never been a dispute about the obsolescence of ICD-9. The challenge has been in how to upgrade: the migration path to ICD-10 is no small project. ICD-9 codes have been in use in the U.S. for more than 30 years and are deeply embedded in claims processing, reimbursement, and numerous other business operations. Migration to ICD-10 is an expensive undertaking and will be a major project with widespread impact on all stakeholders in even the smallest healthcare institutions. 

It took a government mandate to force all stakeholders, including hospitals, ambulatory care providers, and health plans, to comply with ICD-10 reporting standards. The Final Rule CMS–0013,2 which was published January 16, 2009, by the Department of Health and Human Services (HHS), set October 1, 2013, as the deadline for replacement of the ICD-9-CM code sets with ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification for diagnosis coding) and ICD-10-PCS (ICD-10-Procedure Coding System for inpatient hospital procedure coding) code sets. In February 2012, HHS announced its intention to delay the deadline, but the complexity of ICD-10 remains a top priority for the HIT industry.

As I stated above, I will refrain from giving my opinions about why US HealthCare is facing such a daunting task with the adoption and driving the transformation using ICD-10. 

Significantly more complex than ICD-9, the ICD-10 classification system dramatically expands the number of codes to be used. Whereas ICD-9 has about 17,000 codes, ICD-10 has more than 150,000 codes. ICD-10 includes support for more precise medical concepts and specificity. It also includes codes for newer information types, such as genomics and biomedical informatics. Because ICD codes are essential to care delivery and business processes, migration projects will affect nearly all operational systems and procedures ranging from bedside (clinical documentation and decision support), to finance (billing, claims processing, and revenue cycle management), to administration (analysis and reporting). The transition will require investments in training, changes to legacy systems, and testing with partners, vendors, and payers. In addition, the migration to ICD-10 will necessitate either a crosswalk between ICD-9 and the new ICD-10 codes in order to ensure system compatibility during the transition timeframe, or a reimplementation of all the business rules using the new ICD-10 coding system. Regardless, it will be a laborious process, because often organizations will have to go back to the original intent of the rule and rethink how it should be configured in the new coding system.

In a very recent Healthcare Informatics Research survey, 367 hospital-based healthcare professionals shared their organizations’ migration strategies. These include key drivers for the project, budgetary allocations, leadership, and challenges, as well as anticipated benefits and opportunities. All hospitals represented in this online survey plan to migrate to ICD-10, but migration plans differ in rationale and expectations.

Key ICD-10 Migration Strategies

Among the organizations that have not begun work on their 
ICD-10 migration projects or that are in the planning stages, most 
(58%) plan to embark upon the actual migration work in 2012. At 
the time of the survey, about one in five (19%) planned to start in 
late 2011, with a near equal number planning to delay their start 
until 2013. Some organizations are waiting for their vendors to 
get started, and some are hoping the deadline will be extended.

The ICD-10 Migration Team

More than half (57%) of hospitals surveyed are relying on the 
collaboration of both internal resources and a vendor to handle 
the migration to ICD-10. Teaching and academic institutions are 
most likely to take this approach. A significant group (41%) of 
those surveyed is relying on internal staff and resources to fulfill 
the migration. Very few organizations (2%) are relying solely on 
a vendor.

Health information management (HIM) professionals in medical 
records departments were most frequently cited as the lead for 
ICD-10 projects. They lead projects in nearly half of hospitals 
represented in the survey (43%) and most often reported leading 
projects in specialty care facilities, hospitals with fewer than 
200 beds, and hospitals in rural locations.

Importance of ICD-10 Migration Milestones

When asked to evaluate the importance of key ICD-10 migration milestones, most survey respondents ranked all key project milestones as “very important” to “extremely important” on a scale from 1, “not at all important,” to 10, “extremely important.” Recognizing the breadth and pervasiveness of the changes, more than half (55%) of those surveyed rated education and training on ICD-10 as “extremely important.”

Meeting ICD-10 Migration Challenges

Consistent with the overwhelming majority of survey respondents who rate education, awareness, and training as “very important” to “extremely important” to ICD-10 migration projects, survey respondents rate staff training as the migration’s biggest challenge,
with costs, specifically those related to remediation, a close second. Survey respondents rate support from executive management as one of their least important ICD-10 migration challenges, which may speak to hospital executives’ understanding of ICD-10 and the general support they have given ICD-10 project teams.

For the most part, the need to migrate to ICD-10 is understood throughout healthcare organizations. More than half (55%) of staff members understand the value and benefits. But among those surveyed, more than a quarter (27%) report that their staffs perceive
ICD-10 as a major issue and resent the mandate to change. This is understandable, as ICD-10 will result in extensive changes for clinical documentation, billing, and workflow in most hospitals, and staff may first perceive the migration as simply “more work.” But staff perceptions of ICD-10 and resistance to change are tied to level of awareness about the value that can be derived from moving to ICD-10 coding. For organizations that have not
begun migration work, or that are in the early stage of ICD-10 awareness and education, respondents are more likely to say that most of the staff perceives the migration as a major issue and resents the mandate to change. Organizations that are further along in the process, having progressed at least to the planning stage, find that levels of staff resistance decline. At later stages, once most staff members have received education, awareness, and/or training, they are better able to understand the need for change and the benefits of ICD-10.

Financial Concerns Related to ICD-10 Migration

The financial concerns related to ICD-10 implementation are widespread. Nearly all hospitals, no matter where they are in the migration cycle, say that the ICD-10 migration will strain their budgets due to the need for more personnel, application upgrades, education and training, and remediation costs.

Additional budget problems are expected to result from temporary reductions in cash flow due to more claims requiring additional documentation, increases in denied claims, and
slower turnaround times on reimbursements. Costs to educate and train staff are a major concern—an area of challenge that survey respondents expect will result in productivity losses as staff members come up to speed using the new coding system.

In addition, the vast majority of respondents expect to encounter coding backlogs due to migration. Sixty-three percent plan to combat this backlog by providing staff with computer-assisted coding tools, while 52% plan to hire interim staff. Fewer anticipate
outsourcing any or all of their coding operations.

ICD-10 Benefits and Opportunities

At an organizational level, an overwhelming majority (96%) of those surveyed think ICD-10 will improve quality care and patient safety initiatives, but they don’t always agree on the specifics.
Two out of three respondents see benefits directly related to the more detailed clinical data codes that will support meaningful use requirements and quality care initiatives, and more than half point to guidelines for clinical decision support.

The greatest organizational opportunities identified by three in four survey respondents are in health information management, where coding and medical transcription and abstraction will garner the greatest benefits. When migration, including ICD-9 to ICD-10 crosswalks and remediation, is complete, the IT department and its systems are also expected to benefit from a more streamlined workflow.

At a departmental level, 41% of survey respondents expect the finance department to derive the greatest benefits from ICD-10. Because of the wealth of improvements offered by ICD-10, those surveyed expect the finance department to benefit from more
accurate reimbursements and payments; support for performance improvements; the ability to create efficiencies and contain costs; support for business intelligence; and improved revenue cycle financials. Luckily, these benefits provide a strategic business advantage for all.

In Summary

Although nearly all hospitals (93%) have begun work on migrating to ICD-10, most remain in the planning stage or have just started assessments. Very few have reached the remediation or testing stages. Although one in three say they are only transitioning to
comply with the regulatory requirement, it is possible that as they move along the migration path and become more aware of the benefits and opportunities that ICD-10 can provide, they will incorporate plans that leverage the coding system into their organizations’ strategy and business processes.

The migration process for all hospitals will require an investment — both financial and on the part of hospital staffs. Organizations report the need for education and training, additional personnel, application upgrades, and remediation costs. Until all the systems,
including those of business partners, are fully implemented, the budgetary strain will be compounded by reductions in cash flow due to more claims requiring additional documentation, an increase in declined claims, and slower turnaround on reimbursements.
But once implemented, hospitals are expected to benefit from improvements in quality of care, patient safety, business processes, workflow, and financial positions.


1 World Health Organization, Geneva, Switzerland,

About Healthcare Informatics Research
Like Healthcare Informatics magazine, Healthcare Informatics Research provides expert insight and analysis on topics of major importance to the healthcare information technology (HIT) community. By conducting research with information technology professionals at care provider organizations of all types and sizes, and the companies that serve them, Healthcare Informatics Research provides objective, primary source information that serves as the basis for research reports, white papers, webinars, and presentations. Members of the Healthcare Informatics Research Panel are recruited from the reader base of Healthcare Informatics magazine to share their observations, opinions, and experiences.

To better understand progress and plans, along with challenges and opportunities faced by hospitals as they migrate from ICD-9 to ICD-10, Healthcare Informatics Research, in cooperation with other F500 company(ies), conducted an online survey. Drawn from 3,441 eligible members of the Healthcare Informatics Research Panel, a total of 504 healthcare providers completed the online survey. Of this group, 367 were hospital-based care providers. The survey respondents represent a diverse group of healthcare executives and managers employed at a broad range of hospital types, sizes, and care delivery locations. All are in the process of planning for or migrating to ICD-10.

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