New medical coding system taxes hospital IT resources

Federal requirement of ICD-10 changeover as much about integration and testing as it is new applications

A new federally mandated medical coding system designed to better track diagnoses and treatments is affecting dozens of core applications for healthcare providers and insurance payers, and is requiring a massive overhaul of IT systems that some say is nearly impossible to complete on time.

Medical providers and insurance payers are required to move from the current ICD-9 coding system to ICD-10 by Oct. 1, 2013. While two years away, the effort has already been underway since 2008, yet most hospitals have yet to begin the change out, says the American Hospital Association, an industry group with more than 5,000 member hospitals, health systems and other care organizations.

The move from ICD-9 to ICD-10, which changes out about 15,000 codes for approximately 68,000 new ones, comes at a time when care providers are already under the gun to implement and prove to the federal government the meaningful use of electronic health records (EHRs) .

ICD-10 was published by the World Health Organization (WHO) in 1992 as a way add the tracking of mortality rates to the coding standard. Since that time, additional coding has been added to provide a more comprehensive method for tracking diagnoses and medical treatments.

The Centers for Medicare & Medicaid Services is in charge of regulating both "meaningful use" and ICD-10 implementations. So-called meaningful use standards come in three phases, and currently hospitals are required to implement Phase I this year. A proposed rule governing Stage 2 is targeted for publication in late 2011 or early 2012, the agency says.

In the meantime, ICD-10's deadline looms, and many hospitals and Medicaid providers are well behind what is considered by most to be a multi-year implementation.

"Quite frankly, the hold up is it's a big undertaking and it took them a while to get under way. Everybody's started, but a large percentage of hospitals are in the heavy analysis stage or they're just starting," said Casey Corcoran, vice president commercial solutions for healthcare at General Dynamics Information Technology, a vendor offering ICD-10 consulting services.

Earlier this year, the Centers for Medicare & Medicaid Services did conduct a teleconference to help payers and providers understand their responsibilities in implementing ICD-10.

Christine Armstrong, a principal at Deloitte Consulting, said in a report that ICD-10's complex code and its impact on EHRs, various billing systems, reporting packages and other decision-making and analytical systems will prompt major upgrades or the replacement of current systems.

The changeover will probably cost larger hospitals between $2 million and $5 million, and large care groups as much as $20 million, said James Swanson, director of client services at Virtusa, an IT services and consulting company.

ICD-10 will also require staff at hospitals and private physician practices to map and load codes, redo system interfaces, redevelop reports, and retrain users. In addition to coders, system changes will impact nurses, physicians, patient financial services, case management, utilization review and other staff.

"It is the kind of thing that people have compared to Y2K. It's probably more complex than Y2K. There's a lot more human interaction than Y2K," said Robert Alger, vice president of health plan IT strategy at Kaiser Permanente.

Kaiser is one of the nation's largest healthcare providers, with 8.7 million health plan members, 167,300 employees and 14,600 physicians.

Alger, who is in co-chair of Kaiser Permanente's ICD-10 implementation team, said the changeover has impacted well over 100 systems internally, from clinical coding systems and financial systems to claims processing and customer reporting systems.

Kaiser, which was well-ahead of the curve in implementing EHRs, expects to meet the government's deadline for ICD-10 with time to spare. Alger said his company began its implementation two years go, and expects to finish it in next year.

Jim Whicker, Principal Technology Consultant for Health IT Strategy and Policy at Kaiser Permanente's Information Technology Division, said many smaller hospitals, as well as public and private health plans, are running up against a deadline they will not likely meet.

Whicker said he feels the Centers for Medicare & Medicaid Services must do a better job in providing guidance, education and outreach to the health care industry.

For one, Whicker hopes the agency will come out with a test bed for providers so that they can check and see if upgraded systems are functioning properly. The agency did not immediately respond to requests for comment on ICD-10.

George Arges, senior director of the American Hospital Association's Health Data Management Group, called ICD-10 an "unfunded mandate" whose implementation is taking money from operational budgets.

"It is pretty costly. A lot of other capital programs and initiatives are being deferred so these hospitals can work on the ICD-10 switchover," he said. "It crosses over so many different information systems. It's very broad in its scope."

At this point, Arges said the American Hospital Association is watching closely to see how healthcare application vendors, and public and private providers of healthcare plans are moving forward on ICD-10.

"I've heard from a few Medicaid plans that they're not going to be ready [for the deadline]," he said.

ICD-10 was published by the World Health Organization (WHO) in 1992 as a way add the tracking of mortality rates to the coding standard. Since that time, additional coding has been added to provide a more comprehensive method for tracking diagnoses and medical treatments.

The U.S. is one of the last countries to adopt ICD-10, but as such it is also adopting the most thorough revision of the coding system.

For example, ICD-9 has one code for a finger amputation procedure. In contrast, ICD-10 has a code for every finger and every section of every finger, which can then be used by an insurance company to determine what the cost of a procedure should be. For example, a thumb amputation would be more expensive than removing the first section of a pinky.

ICD-10 codes, which are alphanumeric and seven characters in length, must be used on all transactions covered under the Health Insurance Portability and Accountability Act (HIPPA), including outpatient claims with dates of service, and inpatient claims with dates of discharge on and after October 1, 2013.

Before the ICD-10 codes can be used, however, physicians and others in the health care community must start using the new version of HIPAA transaction standards known as 5010 by January 1, 2012, as the current version, 4010, does not accommodate use of the ICD-10 codes.

The Centers for Medicare & Medicaid Services has put its foot down and refused any grace period for ICD-10 implementations. Healthcare providers will not be able to continue to report ICD-9-CM codes for services provided on or after October 1, 2013.

One of the more necessary products being made available to healthcare providers and payers are ICD-10 code translators, which compare ICD-9 to ICD-10 codes and change out the old code with the new.

Kaiser Permanente's Alger said many healthcare providers will be relying on their vendors to provide packaged ICD-10 system upgrades, but even then implementing those systems, integrating them with existing infrastructure and workflows and training employees at the same time place a tremendous burden on staff.

"They're going to get new software from multiple vendors in a compact area of time," he said. "I think the test burden and the integration burden is where we'll really stress the smaller players."

For example, surgical scheduling software, healthcare information systems, revenue cycle systems, lab systems, and HL7 clinical interfacing switches will all need to be upgraded and tested at the same time.

"All those things are very likely from different vendors. They now have to get reintegrated and you have to test that and you have to have enough capacity to run your production world and doing a fair amount of testing in your rest world. And, you have to be ready to make the cut over," he said.

And, a lot of the work also includes training employees to write more detailed notes.

"How do you train your surgeon to write a surgical note so that it's at the right level of detail to allow the coder to correctly code that and do the revenue capture?" Alger said. "So there's the human element that's even more complicated in this."

"The key is for those system vendors ... and if they can deliver products to the provider for testing and process improvements, things that need to happen based on the changes to the software and the users using it," Whicker said.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed . His e-mail address is .

Read more about health care in Computerworld's Health Care Topic Center.

Copyright © 2011 IDG Communications, Inc.

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