Understanding the Transition From ICD-9 to ICD-10 – 9/10/10


In 2008, the Centers for Medicare & Medicaid Service (CMS) issued a notice that an industry wide migration from ICD-9 code sets to an expanded ICD-10 framework would go into effect on October 1, 2013.

ICD is the International Classification of Diseases – a set of codes for identification and tracking.  The shift in standards moves the industry from ~17,000 medical codes to over 155,000.  The rationale for this migration is that the current ICD-9 classification set has maxed out its capacity for new diagnoses.  More impactful is that the new ICD-10 code set will allow for increased data analytics, trending of outcomes, real-time transparency, and smarter delivery of care – all of which inherently take costs out of the system. This new set of codes will also give the government tools for establishing financial incentives (and penalties) for payers and providers with the underlying goal of maximizing every dollar of healthcare spend.

Along with the numerous benefits of the transition, a new set of challenges will arise for all constituents including a significant cost to migrate (estimated to be more than $1.6B spread across health plans and care providers).  Beyond these costs, the transition is predicted to cause an initial spike in the number of claim errors.  While this is a seemingly short term concern, it will cause headaches for an industry dealing with many other issues thanks to health reform.

With problems come solutions; and we’re already beginning to see a number of new business models hitting the marketplace to help organizations through this transition and take advantage of the benefits of ICD-10’s enhanced data set.  Some include:

  • Middleware:  Applications to perform much of the translation services required to enable payers, providers, and other healthcare constituents to manage this massive expansion in medical code sets and clinical documentation
  • Pay-for-Performance (P4P): A long time concept whose time may have finally come as payers have may finally be able to leverage richer data sets to establish a more optimized reimbursement model
  • Outcome Based Care Regimens:  The richer data sets from ICD-10 will allow health plans to better track patient outcomes and link them to specific care regimens – the result will be a better understanding of care and disease management program efficacy.

Our team is following the transition to ICD-10 with great interest as a new era of accountability in healthcare maximizes the value of every healthcare dollar via improved efficiencies and reduced fraud, waste and abuse.  Let us know what you’re seeing in the market as new business models emerge and innovative programs are launched to effectively link data, analytics and services throughout the transition to ICD-10.

Have a great week!

Judd Stevens
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