AAOS Now

Published 2/1/2013
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Marty Krawczyk

Meeting the Challenge of ICD-10

Take steps now to keep your practice solvent next year

On Oct. 1, 2014, the International Classification of Diseases (ICD)-10 coding system will replace the current ICD-9 coding system—and if your practice isn’t ready to make the transition, practice revenues and your income will be jeopardized.

With more than 141,000 diagnosis codes in ICD-10, you need to begin today to learn about and prepare your practice for the conversion. Otherwise, you could experience a potentially devastating loss of productivity and revenue—enough to jeopardize the financial stability of the practice—in the first year following the conversion.

Throughout the year AAOS Now and the Practice Management Center website (www.aaos.org/pracman) will feature information and tips on preparing for the conversion. This month’s article focuses on the loss in productivity factor.

The cost of lost productivity
The primary changes in ICD-10 are related to organization and structure, code composition, and level of detail. Orthopaedic injury codes are grouped by anatomic site. For example, a search for a code relating to a fracture of the radius would begin with a search for “radial,” selection of the appropriate level (forearm, hand, upper arm, wrist), and finally the appropriate fracture code.

ICD-10 codes have three to seven alpha and numeric digits (Table 1). Clinical documentation is needed to select the appropriate ICD-10 code, and new terminology must be used to document patient care information and support both the diagnosis reporting and the medical necessity for the service provided. Use of unspecified codes is liable to result in a substantial number of rejections. As a result, accurately documenting and coding each patient encounter will take longer.

In 2008, Nachimson Advisors, LLC, was retained by the AAOS and 11 other healthcare organizations to assess the cost impact of ICD-10 on the provider community. The resulting report estimated ICD-10 implementation costs would range from $83,290 for a small, three-physician practice to $2.7 million for a large 100-physician practice.

Increased documentation costs—the time needed to provide the additional documentation to support the patient’s diagnoses—accounted for more than half of these costs in a small practice, an estimated $44,000. Another quarter of the total costs was related to cash flow disruption.

Once the documentation is complete, coders and billers will need additional time to verify that the codes are supported by the clinical documentation and vice-versa. Because none of the ICD-9 codes can be used, coding staff will have many questions to ensure coding accuracy. Reviewing rejected and denied claims, particularly during the first 6 months after the conversion, will be time consuming for everyone.

Training is another issue. The hours of training required to understand how ICD-10 is structured and applied will depend on the size of the practice and the experience of the staff in coding. A small practice can expect to spend between $1,500 and $2,000 for training and education.

Data from Canada, which converted to ICD-10 between 2001 and 2003, indicate that productivity declined by 10 percent in the year before and the year after implementation. It took an average of 6 months for most healthcare environments to return to an acceptable productivity level. Training, slower processing time, increased inquiries from coders, and billing inquiries from payers all contributed to hours of lost productivity.

Even if a practice has a gross revenue of $10 million per year, a potential 10 percent decrease in productivity levels would cause great concern.

AAOS can help
Everyone covered by the Health Insurance Portability and Accountability Act (HIPAA) must transition to ICD-10. This includes providers and payers who do not deal with Medicare claims.

The first step in preparing for the transition is to organize a project team within the practice to talk about ICD-10 and to determine its impact on the practice. After that initial discussion, a team can be assigned to develop a timetable and implementation plan. A listing of the key steps in ICD-10 implementation can be found at the AAOS online practice management center at www.aaos.org/ICD10

Take advantage of the following resources in the months ahead:

  • Sign up for AAOS webinars focused on ICD-10. Check the CME course calendar on the AAOS website (www.aaos.org/calendar) for complete course information.
  • Subscribers to the AAOS Orthopaedic Code-X Software product should check recent editions of the Code X-tra newsletter, which provides medical record coding tips and conventions. See the product description for new Code-X 13, which has a search function to help link ICD-10 to ICD-9 codes.
  • The Centers for Medicare & Medicaid Services (CMS) offers several training and planning resources (www.cms.gov/icd10). CMS is also hosting several national provider education teleconferences to help providers prepare for the transition. All teleconferences are free of charge and require registration.

Marty Krawczyk is a practice management program coordinator in the practice management group. She can be reached at krawczyk@aaos.org

References:

  1. Nachimson Advisors, LLC: The impact of implementing ICD‐10 on physician practices and clinical laboratories: A report to the ICD10 Coalition. http://www.nachimsonadvisors.com/documents/ICD-10%20Impacts%20on%20Providers.pdf
  2. Girder D: Preparing for ICD-10-CM: Make the transition manageable. American Medical Association, 2010.
  3. Centers for Medicare & Medicaid Services: http://www.cms.gov/Medicare/Coding/ICD10/Downloads/ICD10FAQs.pdf