Impact of ICD-10 on Payers
The health care industry will be largely impacted by the implementation of ICD-10 codes
. ICD-10 will impact physician practices, hospitals, and payers differently, and is necessary for each entity to develop detailed plans and if you haven't begun planning for the change by September 1, 2009 you are already behind schedule according to the industry published timelines from NCHICA and WEDI.Impact on Payers
Payers, HMO Plans, Self-Insured Employers, Providers, Clearinghouses, Billing Agents, Medical Management Business Associates, Third Party Administrators, Claim Check, Bundling/Unbundling and other software vendors that process healthcare data and use the ICD-9 code in their processing will need to make preparations including:
Educating staff members
Modifying clinical documentation
Addressing new coding procedures and workflows
Modifying provider reimbursement and contracting agreements
Making wide-spread "Y2K" like modifications to IT systems and data to handle the increases in the length of the codes ICD-10-CM codes are increasing from a minimum-maximum of three to five to five to seven
ICD-10-PCS codes have increased from a min-max of three to four to a required minimum of seven characters.
Field length increases and changes to handle alphanumeric data are likely to be necessary throughout all internal and external file interfaces, in application systems processing, and in any file and database where ICD codes are carried and retained
Storage of both ICD-9 and ICD10 codes with increased volumes from 17,000 approximately 155,000 ICD-10 codes Increased file and database storage especially for hospitals reporting ICD-10-PCS and payers and clearinghouses in general. This will be in addition to ICD-9 codes currently maintained for an undetermined interim period
Developing translation mapping crosswalks for specific processing needs based on the CMS issued General Equivalency Mapping that will be used to support dual processing of transactions with ICD-9 and ICD-10 codes and version-to-version translation
Supporting the ability to process both the old and new code sets simultaneously to allow for claims processing, reporting, and analysis of dates of services that cross the compliance date for a run-off transition period and until all legacy validation, adjudication, and reimbursement applications are converted to ICD-10
Other Payer Specific Impacts
As stated previously, a significant impact to Payers will be the need to modify or upgrade any systems that currently use ICD-9 code sets. Another significant impact is the training of staff members who use ICD coding in some of the following capacities:
Manual claims processing and auditing
Disease, case, and utilization management
Development of business rules in reimbursement or claims processing systems
Involvement in the development of programs for fraud detection or medical policy
As the new coding system is implemented, payers may want to consider development of policies and incentives such as pay-for-performance to encourage physicians and hospitals to code diagnoses and procedures accurately. Otherwise, they may not take full advantage of the enhanced specificity of the ICD-10 coding system.
During the transition while providers adjust to the new coding system, Payers may need to plan for additional challenges:
An increase in the number of calls from providers will require additional call center staffing
Systems and processes will need to accommodate a lower first-pass rate for claims
Systems and processes will need to handle claims that are double billed from providers running dual billing systems
Payer functions such as research, reporting, and actuarial will need to develop ways to compare historical ICD-9 data to ICD-10 data. This comparison can pose a challenge, as the mapping between the new and old codes is not always one to one. There may be many ICD-10 codes that map to one ICD-9 code and vice versa and ICD-9 codes that do not map to ICD-10 codes.
Impact of ICD-10 on Payers
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