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ICD-10 Code Set to Replace ICD-9

ICD-10 Compliance Deadline Set as October 1, 2015
The latest compliance date for ICD-10 has been set as October 1, 2015, according to new regulation published by the Department of Health and Human Services (HHS) on August 4, 2014. This one-year delay in the implementation of ICD-10 came from language inserted into the Protecting Access to Medicare Act of 2014, which was signed into law on April 1, 2014. The new regulation also clarifies that ICD-9 will continue to be required until September 30, 2015.

In response to the new compliance date, AMA President-elect Steven J. Stack stated, "While the AMA appreciates that physicians have additional time to comply with ICD-10, we continue to have fundamental concerns about ICD-10 and its implementation, which will not be resolved by the extra time. The AMA has long considered ICD-10 to be a massive unfunded mandate that comes at a time when physicians are trying to meet several other federal technology requirements and risk penalties if they fail to do so."

With the publication of the new compliance date, the Centers for Medicare & Medicaid Services (CMS) announced Medicare's plans for testing ICD-10 with physicians and other health care providers. It plans to conduct acknowledgement testing, which is limited and only checks to see if the claim with ICD-10 codes will make it through Medicare's claims processing front door. This testing is scheduled to occur in November 2014 and March and June 2015.

The second type of testing that Medicare will do is end-to-end testing, which tests the claims from submission through to the receipt of the remittance advice. This testing is more thorough and will provide more detailed information for physicians and other health care providers on how their claims will process and be paid by Medicare with the ICD-10 codes. This testing is scheduled to be done in January, April, and July 2015. Physicians are encouraged to contact their Medicare Administrative Contractors for additional details about the testing.

AMA Releases Updated ICD-10 Physician Cost Impact Report
On Wednesday, February 12, the AMA published a report by Nachimson Associates updating cost data for physicians to comply with ICD-10. The study updates costs from an earlier 2008 study the highlights of which are discussed in a press release. The report found that small practices can expect to spend anywhere between $56,639 to $226,105. The new estimates factor in the costs associated with purchasing new software to accommodate the new codes. Issued in conjunction with the report and press release was a letter to Secretary Sebelius reiterating the AMA’s request that ICD-10 be repealed because it is a costly, unfunded mandate for practicing physicians. While the AMA continues to seek a repeal of ICD-10, it nonetheless remains a federal mandate and physicians are urged to prepare for the compliance date of October 1, 2015.

Background

The differences between ICD-9 and ICD-10 are significant and physicians and practice management staff need to start educating themselves now about this major change so that they will be able to meet the compliance deadline of October 1, 2015.

ICD-10-CM codes are the ones designated for use in documenting diagnoses. They are 3-7 characters in length and total 68,000, while ICD-9-CM diagnosis codes are 3-5 digits in length and number over 14,000. The ICD-10-PCS are the procedure codes and they are alphanumeric, 7 characters in length, and total approximately 87,000, while ICD-9-CM procedure codes are only 3-4 numbers in length and total approximately 4,000 codes. ICD-10-PCS is only used for coding hospital inpatient procedures. CPT remains the code set for reporting procedures and services in offices and outpatient settings.

Moving to ICD-10 is expected to impact all physicians. Due to the increased number of codes, the change in the number of characters per code, and increased code specificity, this transition will require significant planning, training, software/system upgrades/replacements, as well as other necessary investments.

The Final Rule requiring the replacement of ICD-9 with ICD-10 was published in January 2009. At that time, the compliance date was set for October 1, 2013.

In 2012, the Department of Health and Human Services announced a one year delay of ICD-10 implementation, which pushed the date back to October 1, 2014. At the time, then AMA Board Chair Steven J. Stack, MD commented, "The AMA appreciates the administration's decision to provide a one year delay in response to AMA advocacy, but we have urged CMS to do more to reduce the regulatory burdens on physician practices so physicians can spend more time with patients."

Since then, the AMA has taken many steps with the Administration to address physician concerns with ICD-10 and the multiple reporting programs and burdens associated with them, in greater depth.

Medicare Testing and Payment

Testing
The AMA continues to advocate to CMS that robust end-to-end testing needs to occur well in advance of the compliance deadline and with as many physician practices as possible. Testing is the best action the industry can take to ensure that claims will process without problems after the switch to ICD-10.

End-to-end Testing
Medicare has announced that it will do end-to-end testing in January, April, and July 2015 with approximately 2,550 volunteers. The goals of this testing are to demonstrate that:

  • Physicians, other health care providers, and other submitters are able to successfully submit claims containing ICD-10 codes to the Medicare FFS claims systems,
  • CMS software changes made to support ICD-10 result in appropriately adjudicated claims, and
  • Accurate Remittance Advices are produced.

Acknowledgement Testing
Medicare recently announced the results of "acknowledgement" testing it completed in March 2014. Acknowledgement testing tests the ability of the claim to make it through the "front door," but does not test how the claim will process and what the reimbursement will be.

Testers submitted more than 127,000 claims with ICD-10 codes to the Medicare Fee-for-service (FFS) claims systems and received electronic acknowledgements confirming that their claims were accepted. Approximately 2,600 participating providers, suppliers, billing companies and clearinghouses participated in the testing week, representing about five percent of all submitters.

Nationally, 89 percent of the test claims were accepted without any issues, with some regions reporting acceptance rates as high as 99 percent. The normal FFS Medicare claims acceptance rates average 95-98 percent. Testing did not identify any issues with the Medicare FFS claims systems.

Medicare has announced it will do additional acknowledgement testing weeks in November 2014 and March and June 2015.

Physicians should contact their Medicare Administrative Contractor (MAC) for more information on the end-to-end and acknowledgement testing.

Payment
Medicare continues to update the National Coverage Determinations (NCD) and Local Coverage Determinations (LCD). MLN Matters #8691 provides information on recent changes to 29 NCDs.

For LCDs, a list of LCDs converted to ICD-10 is available on the LCDs by Contractor Index. Use the scroll box on the index to select your MAC and use the "Submit" button to view a list of states that the specified MAC services. You can then select your MAC name from the table to view the future translated LCDs.

ICD-9 and ICD-10 Code Freeze

Both the ICD-9 and ICD-10 code sets are currently under a partial freeze during the implementation of ICD-10. The recent delay in the implementation date of ICD-10 to October 1, 2015 has also extended the partial freeze. With the new compliance date of October 1, 2015, the partial code freeze will continue through October 1, 2015. Regular updates to ICD-10 will begin on October 1, 2016, one year after the implementation deadline. No updates will be made to ICD-9 after October 1, 2015, as the code set will no longer be valid.

The ICD-9-CM Coordination & Maintenance Committee Meeting initiated the partial freeze in 2010. The ICD-9 Coordination & Maintenance Committee continues to meet twice a year during the freeze. At these meetings the public will be allowed to comment on whether or not requests for new diagnosis and procedure codes should be created based on the need to capture new technology or disease. Any code requests that do not meet the criteria will be evaluated for implementation within ICD-10 on or after Oct. 1, 2016, once the partial freeze is ended.

ICD-10 FAQs

What is “ICD-10”?
“ICD-10” is the abbreviated way to refer to the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS).

Explain the difference between ICD-10-CM and ICD-10-PCS.
ICD-10-CM is the diagnosis code set that will be replacing ICD-9-CM Volumes 1 and 2. ICD-10-CM will be used to report diagnoses in all clinical settings. ICD-10-PCS is the procedure code set that will be replacing ICD-9-CM Volume 3. ICD-10-PCS will be used to report hospital inpatient procedures only.

Will ICD-10-PCS replace CPT®?
No. ICD-10-PCS will be used to report hospital inpatient procedures only. The Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) will continue to be used to report services and procedures in outpatient and office settings.

Do I have to upgrade to ICD-10?
Yes. The conversion to ICD-10 is a HIPAA code set requirement. Providers, including physicians, are HIPAA “covered entities”, which means that you must comply with the HIPAA requirements.

Who else has to upgrade to ICD-10?
Health care clearinghouses and payers are also HIPAA covered entities, so they are required to convert to ICD-10 as well.

I thought HIPAA code set standards only applied to the HIPAA electronic transactions. What if I don’t use the HIPAA electronic transactions?
It is correct that HIPAA code set requirements apply only to the HIPAA electronic transactions. But, it would be much too burdensome on the industry to use ICD-10 in electronic transactions and ICD-9 in manual transactions. Payers are expected to require ICD-10 codes be used in other transactions, such as on paper, through a dedicated fax machine, or via the phone.

Why is ICD-9 being replaced?
The ICD-9 code set is over 30 years old and has become outdated. It is no longer considered usable for today’s treatment, reporting, and payment processes. It does not reflect advances in medical technology and knowledge. In addition, the format limits the ability to expand the code set and add new codes.

The ICD-10 code set reflects advances in medicine and uses current medical terminology. The code format is expanded, which means that it has the ability to include greater detail within the code. The greater detail means that the code can provide more specific information about the diagnosis. The ICD-10 code set is also more flexible for expansion and including new technologies and diagnoses. The change, however, is expected to be disruptive for physicians during the transition and you are urged to begin preparing now.

When do I have to convert to ICD-10?
All services and discharges on or after the compliance date must be coded using the ICD-10 code set. The compliance date is October 1, 2015. The necessary system and workflow changes need to be in place by the compliance date in order for you to send and receive the ICD-10 codes.

What if I’m not ready by the compliance deadline?
Any ICD-9 codes used in transactions for services or discharges on or after the compliance date will be rejected as non-compliant and the transactions will not be processed. You will have disruptions in your transactions being processed and receipt of your payments. Physicians are urged to set up a line of credit to mitigate any cash flow interruptions that may occur.

What do I need to do now to prepare for the conversion to ICD-10?
There are several steps you need to take to prepare for the conversion to ICD-10.

  • Begin by talking to your practice management or software vendor. Ask if the necessary software updates will be installed with your upgrades for the Version 005010 (5010) HIPAA transactions. If you do not use the HIPAA transactions, determine when they will have your software updates available and when they will be installed in your system. Your conversion to ICD-10 will be heavily dependent on when your vendor has the upgrades completed and when they can be installed in your system.
  • Talk to your clearinghouses, billing service, and payers. Determine when they will have their ICD-10 upgrades completed and when you can begin testing with them.
  • Identify the changes that you need to make in your practice to convert to the ICD-10 code set. For example, your diagnosis coding tools, “super bills”, public health reporting tools, etc.
  • Identify staff training needs and complete the necessary training.
  • Conduct internal testing to make sure you can generate transactions you send with the ICD-10 codes.
  • Conduct external testing with your clearinghouses and payers to make sure you can send and receive transactions with the ICD-10 codes.

ICD-10 Implementation Planning

AMA offers planning tools to increase ICD-10 understanding and readiness.

  • ICD-10 Action Plan: Your 12-Step Transition Plan for ICD-10
    Practice Tool written by the AMA CPT Medical Informatics Department
    With the recent delay, implementation of ICD-10-CM is expected to be October 1, 2015. But transitioning to ICD-10 needs to begin now. This ICD-10 practice tool offers 12 critical steps along with tables and forms to help you make a smooth transition. A short glossary and list of AMA ICD-10 resources are also included. Release date: September 4, 2012.
  • What You Need to Know for the Upcoming Transition to ICD-10-CM
    White Paper written by the AMA CPT Medical Informatics Department
    ICD-10 represents a significant improvement over ICD-9, but structural differences make converting complex. Learn more about this as well as code set differences, reasons for the conversion, crosswalking concerns, and transition tips.
    Release date: June 1, 2012.

AMA Advocacy on ICD-10

AMA testimony to National Committee on Vital and Health Statistics Subcommittee on Standards on ICD-10 delay, June 10, 2014.

AMA testimony to National Committee on Vital and Health Statistics Subcommittee on Standards on achieving a successful transition, February 19, 2014

Letter to HHS on Updated Cost Impact Data and Request for Medicare to Test and Fund Advance Payments, February 12, 2014

Letter to HHS on Penalty Programs and ICD-10, June 14, 2013

Letter to Sen. Tom Coburn supporting S. 972, May 21, 2013

Letter to Rep. Poe supporting H.R. 1701, April 26, 2013

CMS response to December 2012 letter from Medicine

Sign-on letter to CMS re: ICD-10 delay (RES 209-I-12), December 20, 2012

Letter from AMA to CMS on May 10, 2012 in response to proposed rule to extend compliance deadline.

Letter and attachment from AMA to HHS on February 2, 2012

Letter and attachment from AMA to Senator Harkin, January 17, 2012

AMA testimony to the National Committee on Vital and Health Statistics Subcommittee on standards regarding the industry implementation of updated and new HIPAA standards and code sets, June 17, 2011

Letter from AMA and medical specialty societies to HHS, October 28, 2010

AMA testimony to the National Committee on Vital and Health Statistics’ Subcommittee on standards regarding the planning and implementation of the updated HIPAA transactions and code sets, December 10, 2009

Letter from Representative Velazquez to HHS, November 19, 2008

Letter to CMS on ICD-10 proposed rule, October 21, 2008

Letter to the Office of Management and Budget, July 24, 2008

Letter to HHS, April 1, 2007

Letter to Senate Majority Leader, September 19, 2006

Letter to HHS National Committee on Vital and Health Statistics, September 23, 2003

AMA Educational Resources

Articles

  • New Article on Preparing for ICD-10
    "The Current State of ICD-10 & Preparing for It" was published in the November/December 2013 Missouri Medicine Journal. The article provides an overview of ICD-10, the AMA’s advocacy against it, and information on how to prepare for it. The article is posted on here with the permission of the Missouri State Medical Association.
  • AMA White Paper on ICD-10, EHRs, and Administrative Simplification
    The AMA has published a white paper that discusses the promised benefits of ICD-10, EHRs, and administrative simplification. The paper describes the initial regulations and anticipated gains from them. Recommendations on what practices can do to achieve these benefits are also provided.

Tip Sheet Series

5010 and ICD-10: What They Are and How to Prepare for Them Watch this archived webinar that provides an overview on implementing the HIPAA 5010 transactions and ICD-10.

ICD-10 Checklist

ICD-10 Project Plan Template - Steps to Take to Implement ICD-10

Preparing for the Conversion from ICD-9 to ICD-10: What You Need to Be Doing Today

ICD-10 Fact Sheet Series

American Medical News & Wire articles
The following resources are available from the AMA Store for a cost:
  • AMA Training & Events – Choose from a variety of live event training, online modular training or pre-recorded webinar options to aid in your understanding of ICD-10
  • AMA Print Resources – AMA publishes ICD-10 codebook as well as supplementary ICD-10 titles that cover topics like documentation, anatomy and physiology, mapping, and correct coding
  • AMA Data Files – Begin testing your electronic systems now with an ICD-10 Data File created by the AMA

Additional Resources