1. Runninghead:ICD-10: CHANGINGPHYSICIAN PRACTICE
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ICD-10: Changing Physician Practice
Elizabeth M. Cartwright
University of West Florida

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Executive Summary
On January 15, 2009, the Secretary of the Department of Health and Human Services
released a final rule calling for the adoption of a new edition of the International
Classification of Diseases (ICD) standards known as the 10th edition using Clinical
Modification (CM) and the Procedure Coding System (PCS). The final rule adopts ICD-
10-CM for reporting patient diagnoses and ICD-10-PCS for reporting hospital inpatient
procedures – both will replace ICD-9-CM. The final rule, available at
http://www.gpo.gov/fdsys/pkg/FR-2009-01-16/pdf/E9-743.pdf, was published in the
January, 16 2009 Federal Register. (AHA, 2009, p.4)
October 1, 2014 will be the dawn of a new age for the healthcare service industry. A new coding
set that aids communication of patient diagnoses between healthcare organizations defined as
covered entities will be required. This policy brief will cover what changes are to be expected
and what decisions and plans need to be made for a group physician practice. The transition will
affect both the public and private sector of the healthcare service industry. The change will also
impact the public as the new coding set will affect patient care. All healthcare organizations will
be affected to some capacity and have a vested interest in the success of ICD-10. The board of
directors of this group practice will be responsible for the successful transition of the company to
ICD-10. All proposals are recommended. The following links provide an overview of what areas
of the group physician practice will be affected and free ICD-10 resources at the company’s
disposal.
 AAPC - ICD-10 Affecting Practice
 AAPC - ICD-10 Free Resources

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The Compliance Date for ICD-10 is October 1, 2014
The International Classification of Diseases (ICD) code sets are to be used in all
transactions involving the electronic data interchange (EDI) of healthcare data between covered
entities, defined by HIPAA as including health plans, health care clearinghouses, and health care
providers “who transmit any health information electronically in connection with certain
transactions” (HHS, 2003, slide 4). Transactions are specified as claims and encounter
information, payment and remittance advice, claims status, eligibility, enrollment and
disenrollment, referrals and authorizations, coordination of benefits and premium payment
(CMS, 2013). For example, if a health care provider sends a claim electronically to a health
insurance company to request payment for medical services, ICD-10-CM codes must be used on
the claim to report the patient’s diagnoses. “Transactions conducted on paper, through a
dedicated fax machine, or via the phone are not subject to the HIPAA provisions” (AMA, 2011).
As a physician group practice, the company will only have to prepare for the ICD-10-CM
code set, as ICD-10-PCS is used by hospitals to identify inpatient facility services for the
allocation of hospital services. Therefore the abbreviated term ICD-10 will be used to mean
ICD-10-CM only. In this brief, the following queries will be answered in order to address what
decisions should be made by the company:
 What decisions, plans, and actions need to be undertaken by the company to achieve an
easy transition into the use of ICD-10?
 Which roles and operations within the company will be affected by the change, and how
should staff members prepare for those changes?

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 What expectations should the company have during the initial months of the transition?
HIPAA Changed the Game
In an effort to decrease the administrative costs of health care, Title II of the Health
Insurance Portability and Accountability Act of 1996 included the Administrative Simplification
statutes, which requires the establishment of national standards for electronic health care
transactions, that the Department of Health and Human Services (HHS) was called to draft. The
use of the ICD-10-CM for the reporting of patient diagnoses is one the rules enacted by the HHS
as a part of aforementioned national standards. To be clear, the use of ICD-10 to transmit/report
patient diagnoses is only required for electronic transactions between covered entities that were
both specified earlier in this brief. In all other instances, the use of ICD-10 for reporting
diagnoses is not required, although the vast majority of transactions today are electronic and
done between covered entities.
International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-
CM) is provided by the Centers for Medicare and Medicaid Services (CMS) and the National
Center for Health Statistics (NCHS), for medical coding and reporting in the United States. “The
ICD-10-CM is a morbidity classification for classifying diagnoses and reason for visits in all
American health care settings” (CMS, 2010). The ICD-10-CM is based on the ICD-10, the
statistical classification of disease published by the World Health Organization (WHO) (CMS,
2010 & ICD-10 Clinical Modification, n.d.).
Medical codes, both diagnostic and procedural, are a communication tool utilized by
medical, healthcare and health research entities. The call for the transition to ICD-10 is due to the
limitations of ICD-9-CM, the coding set currently in use. Those advocating the switch to ICD-10

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criticize that “ICD-9 is 30 years old, has outdated terms, and is inconsistent with current medical
practice. Also, the structure of ICD-9 limits the number of new codes that can be created, as
many ICD-9 categories are full” (CMS, 2013). ICD-10 has been acclaimed as more logically
organized and with some 69,000 codes, it is more comprehensive than ICD-9-CM that consists
of 14,000 codes in Volume 1 and 2. Advocates also argue that ICD-10 will provide the ability to
study more specific data about each patient’s conditions and treatments which allows for more
effective case management and better coordination of care.
(Hailes, n.d., slide 22)
Those against the transition argue that training employees on the new coding set and
implementing changes in the daily operations of company work flow will be costly, time
consuming and slow administrative processes, not streamline them. “Those that promote ICD-10
predict the ability to have more specified coding will improve patient care and improve insurance
payment rates. The argument against this is that not enough is known about ICD-10 to make

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such predictions” (Hicks, n.d.). The majority of this company and invested parties believe that
the use of ICD-10 will be most difficult for the first two years, but become increasingly less so as
the healthcare industry and the company become more adapted to the changes. The first year is
predicted to be the most discordant. While the implementation of the new coding set may
initially seem tedious and involve startup and maintenance costs, this organization is hopeful that
ICD-10 will lead to better communication between industry entities and better patient care.
The change to ICD-10 and will affect both the public and private sector of the healthcare
industry. Both private sector insurance companies, such as Cigna, and publicly-funded insurance
programs, such as Medicare and Medicaid, will process claims that have assigned ICD-10 codes.
Consequently, health service companies that rely on insurance reimbursement as a main source
of revenue will be affected as well and all other companies involved with healthcare billing,
coding, administration, finance, and some health research organizations. Both the public and
private sectors of healthcare are heavily integrated and reliant on each other, and therefore the
implementation and use of ICD-10 will be a major shift in how the healthcare industry as a
whole operates.
In the Interest of Patient Care
The Centers for Medicare and Medicaid does suggest that medical practices take several
years to prepare for the implementation of ICD-10. However, many practices have lagged and
procrastinated in their preparation for ICD-10, including this office, so it’s best to make haste
from this point on.
The successful transition to ICD-10 will be a team effort as all staff members on both the
clinical and administrative side of company operations will be affected by the new coding set to

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some capacity and need training. The organization’s chief officers will be responsible for making
the key decisions on what should be done in order for the organization to be properly prepared
for the transition, and team leaders will responsible for making sure their respective staff carry
out the decisions made and complete training. As most physicians receive payment for health
services by way of insurance reimbursement, most of their revenue is directly related to
successful coding and claims processing. Therefore, correct coding is a vital function of any
physician’s office, and correct coding relies on proper documentation. All systems and work
process that use ICD codes or document health information for ICD coding first need to be
identified by staff members in order for the organization to understand what work processes need
to adjust and what the training needs of each staff member will be.
The implementation and use of an electronic health record (EHR) and practice
management (PM) system that has the capability of assigning ICD-10 codes has already been as
executed as part of meaningful use. “Meaningful use is the set of standards defined by the
Centers for Medicare & Medicaid Services Incentive Programs that governs the use of electronic
health records and allows eligible providers and hospitals to earn incentive payments by meeting
specific criteria” (HealthIT.gov, n.d.). An EHR program that has computer-assisted-coding
(CAC) software will be the first step in getting the office staff accustomed to seeing the new
codes. “CAC is a software application that analyzes medical records and calculates which codes
should be assigned” (Stack, 2013). CAC software can be compared to spell-check for Word. It
will not replace the need for human coders, but will make the transition easier and assist medical
coders in their work. A good time to begin having the company EHR and PM system assign
ICD-10 codes will be as soon as possible before the October 1st compliance date, preferably next
to ICD-9 codes, so staff can compare the differences between the codes and learn the differences

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between the coding sets. Many EHR software programs have been updated to allow this feature,
including the one currently in use at our office.
ICD-10 will require greater specificity in documentation. Physicians and other clinical
staff, such as nurses, physician assistants, and medical transcriptionists and scribes will need to
be educated on the differences between ICD-9 and ICD-10 and what clinical information will
need to acquired for proper coding. Documentation is crucial for patient care, serves as a legal
document, as it validates the patient care provided and is needed for correct coding, billing, and
reimbursement.
 Medical coders need as much information as possible to assign the proper medical code.
That should lead to fewer physician queries. That improves the medical billing and
clinical workflows.
 Medical claims are rejected and down-coded because there is not enough documentation
to support diagnoses. Properly coded claims are less likely to be denied and can help
medical coders appeal denials.
 Improving clinical documentation will make it easier to protect against healthcare fraud
and dispute any fraud charges.
 Clinical documentation improvement (CDI) is a necessary part of making computer
assisted coding (CAC) systems work for healthcare providers. CAC systems depend on
thorough clinical documentation. Without it, the systems won't be able to be much
assistance.
(Natale, 2013)

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The following two graphs demonstrate what clinical information will be needed to select
the correct ICD-10 codes:
(Hailes, n.d., slides 17 & 23)

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The first graph explains what each of the seven placeholders represents in an ICD-10 code. The
category, for example could be a fracture of the humerus, but specific additional information will
need to be known and properly documented in the patient’s chart. As the second graph shows,
the site, healing progress and visit occasion, initial or subsequent, will also have to be
documented in the patient’s chart in order for fracture to be properly coded.
Medical coders will have to be educated in the different guidelines of the ICD-10-CM
code book, how the code set is organized and become familiar with codes that will be used most
frequently by the practice. “Coding professionals recommend that training take place
approximately six months prior to the ICD-10 compliance deadline” (CMS, 2013). Medical
coders and billers will both need to become familiar with National Coverage Determinations
(NCDs) and Local Coverage Determinations (LCDs) that govern Medicare reimbursement that
will be updated to reflect ICD-10 diagnoses codes. “Both NCDs and LCDs establish policies that
are specific to an item or service. They also define the specific diagnosis (illness or injury) for
which the item or service is covered. LCDs may vary from region to region” (Smiley, 2013).
Coverage determinations for other insurance companies will also be updated, and the practice
administrator will need to work with the company’s contracted insurance agencies to stay abreast
of the changes. Medical billers will need to be aware that EOBs (explanation of benefits) that
accompany payment or denials of medical services from insurance companies will also reflect
the updated NCDs and LCDs. “An explanation of benefits, commonly referred to as an EOB
form, is a statement sent by a health insurance company to covered individuals explaining what
medical treatments and/or services were paid for on their behalf. The EOB is commonly attached
to a check or statement of electronic payment” (Explanation of benefits, n.d.).

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It should also be expected that payment for medical services will be delayed due to the
change to ICD-10, which will be a major shift for insurance companies as well and may slow
their reimbursement time. Payors, i.e. insurance companies such as Blue Cross Blue Shield, may
modify the terms of the company’s contracts, payment schedules or reimbursement rates. This
will affect the company’s relationship with insurance companies and influence the flow and
turnaround time of our revenue cycle. The practice administrator will need to communicate with
insurance companies regularly to learn what changes should be expected and instruct the practice
in how staff should prepare. Furthermore, someone needs to investigate how clearinghouses,
such as Availity, that scrub claims for data entry errors and coding mistakes are preparing for the
transition. More denials should be expected in the beginning of the transition, and medical billers
should be aware that this might occur and be prepared to spend more time appealing denials and
resubmitting claims. The practice administrator will also need to make sure that the electronic
claims system is updated to Version 5010, which accommodates ICD-10 codes and has been the
required for sending electronic claims for insurance reimbursement since January 1, 2012.
The practice will need to budget for time and costs related to ICD-10 implementation,
including expenses for system changes, resource materials, and training. Costs are difficult to
estimate as options are incredibly numerous. Training and resource options should be thoroughly
researched and a budget set around the options chosen. Several training days and company
meetings will need to be scheduled to keep everyone informed and up-to-date on company and
policy changes. Resource materials should be researched and purchased early enough for staff to
become familiar with the materials. System and company operational changes and updates
should be implemented and thoroughly tested before the October implementation.

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All of the suggestions discussed are recommended in urgency, as the only alternatives
include doing less or nothing at all to prepare, and since the transition to ICD-10 will so heavily
impact this company and the healthcare industry, further procrastination and lack of preparation
is cautioned against. The practice administrator and clinical director are recommended be the
leaders in charge of the ICD-10 transition, and company team leaders should be in charge of
directing the company in preparation. It’s hoped that this policy brief has explained why such
haste is necessary and given the company an idea of what changes need to be made. October 1,
2014 will be a new beginning for the healthcare service industry.

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implementation. ICD10WATCH. Retrieved from http://www.icd10watch.com/blog/your-
clinical-documentation-ready-icd-10-implementation

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