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The changeover from using 14,000 ICD-9 codes to 68,000 ICD-10 codes will affect every healthcare billing system, from inpatient and outpatient to radiology and pharmacy.

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Starting Oct. 1, number of descriptive medical codes jumps from 14,000 to 68,000

While much of the media's focus of late has been on electronic medical records (EMRs), what is proving to be a more daunting task is a new medical coding system affecting healthcare provider and insurance backend systems.

ICD-10, which represents the 10th edition of the International Classification of Diseases (ICD), will be used for classifying diagnoses and medical procedures.

The codes will dictate how the more than $2.8 trillion that Americans spend each year on medical care is paid out.

The new coding system is so complex that the mandate requiring it has been delayed twice. Its current deadline is Oct. 1, and there are industry rumblings that it may be delayed again.

The IT challenge for hospitals, physician groups and insurance companies lies with a new medical classification system that increases the number of descriptive codes from 14,000 in ICD-9 to 68,000 in ICD-10. It also changes a purely numeric system to an alphanumeric one.

Simply put, ICD-9 ran out of codes to describe all the new injury and disease descriptions and treatments that have ballooned over the past 37 years since it was put into use.

"Anything that's going to be generating documentation in the billing cycle will need to be updated because it will need to be coded for ICD-10," said Charles Christian, CIO of St. Francis Hospital in Columbus, Georgia.

Not only will the number of database fields need to be quintupled to handle the number of codes, but the field lengths will need to be expanded to accommodate the longer ones. The greatest challenge, however, is ensuring medical billing systems and insurance claims systems speak the same language.

ICD-10 graphic American Health Information Management Association

A survey of 545 healthcare managers commissioned last year by the American Health Information Management Association and two other entities revealed some processes and workflows would be more difficult after ICD-10 is rolled out.

"We need to ensure this will work from soup to nuts," said Christian, whose IT staff began preparing for the ICD-10 changeover about four years ago.

Hospitals have many systems that must be upgraded. There are separate inpatient and outpatient billing systems and ancillary billing systems used by individual departments, from radiology and labs to pharmacies. EMRs must be ICD-10 compliant as well.

"On our physician practice side, we're running five different EMRs in offices... and they all have their nuances in how the codes are handled," Christian said. "So there's a significant load put on those organizations to insure everything is going to work the day we flip the switch."

Hit by a turtle? Yeah, there's a code for that

The new ICD-10 code set describes in remarkable detail practically anything that could cause someone to seek treatment and the medical procedure used to treat it.

For example, when ICD-9 was rolled out in 1978, there was no such procedure as arthroscopy, where an endoscope is used to perform minimally invasive surgery on a joint. ICD-10 codes also add whether a procedure is an initial one or a subsequent treatment.

If a physician is treating a broken ankle, the code needs to be selected for which leg the ankles is on, whether it's on the lateral or medial side of the ankle and if the injury is an open or closed fracture.

The detail with which ICD-10's codes describe medical conditions can at times wander into the bizarre. For example, if you were stabbed while crocheting, your doctor would use the code Y93D1. Sucked into a jet engine? That's a V97.33XD.

Burned when your water skis caught fire? Then your physician would use V9107XA. And, if you were unlucky enough to have been struck by a turtle, that's a W59.22XD. There's even a code for having been attacked by a squirrel.

"It is the largest and most challenging mandate we'd ever seen," said Ryan McDermitt, vice president of software products at Edifecs, a tier-one vendor of B2B data trading networks. "There'll be a real crush in the healthcare industry in the second half of the year."

Along with hospitals and physician practices, large insurers, such as WellPoint and United, each have spent more than $100 million in systems upgrades since ICD-10 began, McDermitt said.

Along with insurers, the ICD-10 codes are used on claims submitted to Medicare and Medicaid. Claims are also submitted by healthcare providers to enormous clearing houses, such as McKesson's Relay Health, which checks them to ensure there are no mistakes before they head off to the payer. So, they too must be prepared.

ICD-10's medical classification list was created by the World Health Organization (WHO) and it's used by developed countries around the world.

So why haven't U.S. hospitals and physician practices already flipped the switch on ICD-10? Because unlike other developed counties, ICD-10 in the U.S. will not only be used to classify health problems and treatments, it will also be used for payments.

That means medical facilities need to test their systems with payers - insurance companies such as United Health, WellPoint, Aetna and Blue Cross, as well as smaller, regional payers.

There are about 186,000 medical coders in the U.S. who work in hospital administrative offices and transcribe doctors' notes into ICD codes. Those codes are used by insurance companies to determine how much to pay hospitals and doctors in physicians' practices for the treatment they've provided. Miss a code or type an incorrect code, and the hospital or private physician could lose money.

Many aren't ready

Testing to ensure ICD-10 rollouts happen without disrupting patient treatment and payments to healthcare providers, therefore, has been rigorous. Healthcare providers have been testing and retesting because they understand what's at stake.

"Not only do IT organizations have to be organized internally with a project team and manager, but they also have to get folks from other parts of the business -- from finance and operations involved," said Denny Brennan, executive director of the Massachusetts Health Data Consortium (MHDC). "It's not just a technical exercise."

The MHDC is the nation's oldest health data sharing organization. The consortium coordinates medical data sharing for 80% or 86 of Massachusetts' acute care providers, the state's Medicaid plan, known as MassHealth, and all in-state insurers. It has also spearheaded ICD-10 testing for hospitals in the commonwealth.

Brennan said testing of 95 Massachusetts payers or providers revealed that the claims systems at physician practices were not robust enough compared with hospitals.

"Different systems were used and that created problems. Other organizations had billing systems that weren't HIPAA compliant or providing accurate codes," Brennan said. "I'd say one big area, which I'd call data source systems, really got pressure-tested and in some cases they broke and had to be modified or enhanced."

Even though MHDC began ICD-10 testing using common methodologies early in 2013, Brennan said only about 10% of providers and payers have completed their testing to date.

Robert Wah, president of the American Medical Association, said initial testing on ICD-10 systems has shown the potential for "a serious back-log in millions of health care transactions and significant financial disruptions for physicians that could threaten patients' access to care."

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