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Wednesday, February 1, 2012

Are You Ready for the New ICD-10 and Electronic Version 5010? Changes Start Taking Effect in Early 2012...

The International Classification of Diseases (10th edition) (ICD-10) codes will take effect on October 1, 2013. While this may seem far off, according to the Centers for Medicare and Medicaid Services (CMS), physicians should begin preparing for the changes immediately. In addition, the CMS will require use of the new Version 5010 for the electronic submission of claims beginning in early 2012. Although the Version 5010 represents less of a structural transformation than ICD-10, its impact will come in just a few months. Failure to prepare for either change can (and most likely will) result in unpaid claims.


The ICD code change affects all healthcare providers subject to HIPAA. Even providers who do not handle Medicare or Medicaid claims must make the transition. In describing the magnitude of this change, the American Academy of Family Physicians observed that, while ICD-9 contains 14,000 diagnosis codes containing 3-5 digits each, ICD-10 contains 69,000 diagnosis codes with 3-7 digits. The purpose behind this change is to improve the structure and specificity of the coding system. In addition, since the ICD-9 was originally developed by the World Health Organization and is over thirty years old, an update is needed. Current Procedural Terminology (CPT) codes for outpatient procedures will remain unaffected; although with time, it can be expected that the CPT codes will reflect the greater specificity of the ICD-10.

The change was enacted through federal regulation, 45 CFR § 162.1002, and will require the use of two types of ICD-10 codes. The first code type is the ICD-10-CM (ICD-10) and it applies broadly to healthcare treatment settings. It must be used for diseases, injuries, impairments, other health problems and their manifestations, and causes of injury, disease, impairment, or other health problems. See 45 CFR § 162.1002. Furthermore, ICD-10 codes will sometimes indicate external causes. For example, T39.011 will indicate poisoning by aspirin, accidental. Non- specific codes will remain available. The second code is the ICD-10-PS which applies only to the inpatient hospital setting. It applies to inpatient procedures and other services relating to prevention, diagnosis, treatment, and management. Id.

In order to prepare for the conversion, a physician should consider the effect of the conversion on staff, budget, and future revenues. Staff will require instruction on the workings of ICD-10 and its many changes from ICD-9. Care will need to be taken to assure that sufficient resources are available to be allocated to training and compliance. Now is the time to lay a good foundation and make sure your staff has the tools to “get it right.” You do not want to suffer any loss in revenue because you were unable to timely implement the ICD-10 codes. This is particularly important because, from October 1, 2013 onwards, you may only use the ICD-10 codes. With this much lead time, governmental and other payors are not likely to be too sympathetic to coding errors.

In addition, physicians might want to consider the use of software aids and the provider may want to contact their practice management or billing software vendors for assistance. Physicians who contact their vendors should ask for details about compliance, especially costs and whether upgrades are covered under their existing contract. CMS provides General Equivalence Mappings (GEMs) to translate ICD-9 codes into ICD-10. However, GEMs cannot substitute for learning the new system, and practices will be held responsible for errors.

Furthermore, physicians should consider whether ICD-10 could affect their agreements with payors. Employment productivity bonuses relying on the ICD-9 codes could also be affected. In order to prepare, agreements using the old terms should be reexamined and updated. The bottom line with these changes is the sooner the preparations begin the better. For a suggested timeline on preparing for the new system, including the electronic claims submissions.

Electronic Claims & Version 5010

Less monumental, but more immediate, is the change to electronic claims submissions. CMS is requiring that, for electronic health care claims, Version 4010/4010A needs to be upgraded to Version 5010 by March 31, 2012. The March deadline comes after CMS granted a reprieve on November 17, 2011 from the previous deadline of January 1, 2012. CMS also states that January 1, 2012 remains the deadline for use of Version 5010, however, it will delay enforcement until March 31, 2012. This requirement applies to all healthcare providers who are regulated by HIPAA, and transmit health care claims electronically. According to CMS, 99% of Medicare Part A claims and 96% of Medicare Part B claims are electronically received.

If after March 31, 2012 a covered provider submits an electronic claim without using Version 5010, it cannot, and will not, be paid. CMS began accepting Version 5010 claims on January 1, 2011. Therefore it is not too early to begin using Version 5010 or at least making the transition to it. Version 5010 will allow for the usage of ICD-10 codes and is intended to standardize business information about a transaction. In addition, Version 5010 includes updates for all HIPAA transaction standards.

Given the rapidly approaching deadline, confusion can be expected. Much of this confusion will find its origin in the difficulties faced by busy physicians in trying to keep up with the numerous changes instituted by CMS. Nevertheless, physicians should begin their preparations soon.

In order to prepare for Version 5010, providers should determine what impact the new electronic claims version will have on their practice. An analysis should include a realistic determination of how much staff time and effort will be required to make the necessary changes by March 31, 2012. Physicians who use third parties or receive assistance in submitting claims from an outside entity should contact those third-parties or outside entities to make sure that they are prepared for these changes.

By December 31, 2011, physicians and their practices should have run external tests to verify the functionality of their Version 5010 electronic filing system. On March 31, 2012 Version 5010 takes over and no claims will be paid using the old versions.

ICD-11 (Not Until After 2015)

Updates to ICD-10 will begin on October 1, 2014 according to CMS. Yes, WHO has already begun work on ICD-11. Fortunately, ICD-11 is not due to be issued by the WHO until 2015.

Summing Up

Time is of the essence in preparing for changes brought by ICD-10 and Version 5010. Speakers at a recent CMS teleconference all emphasized that no extensions are planned. For better or for worse, it appears the adoption of ICD-10 and Version 5010 is imminent. Physicians need to develop strategies, meet with staff, and learn all they can about these new requirements and systems. The physician who begins preparations now will have a competitive advantage and be in the best position to adjust while continuing to care for their patients and getting paid to do so.


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