The sweeping changes of the 2013 mandated HIPAA 5010 and ICD-10 conversions come at a time when healthcare providers face intense competition for dwindling financial resources. Every facet and nearly every core system of healthcare will be affected as the industry moves from 13,600 diagnosis codes in ICD-9-CM to more than 68,000 codes in ICD-10-CM.

While the clinical rewards of more granularity in diagnosis data will be significant, achieving the conversion in just two short years unscathed by an increase in claim rejections, lost productivity or delays in reimbursement will be no easy feat. Effective planning and education will be the foundation of a successful transition for all providers, but laboratories could face significant cash flow interruptions if ordering physicians fail to provide adequate ICD-10-CM coding information, or vendors and payers are not prepared for the conversion. As the transition looms ever closer, implementation planning for ICD-10-CM should begin immediately for all stakeholders.

Promise of ICD-10-CM

Outcomes analysis and clinical decision support are the end goals of many healthcare providers' quest to obtain better information. ICD-10 closes the loop on acquiring accurate treatment and patient population information in terms of illnesses and mortality rates within the general population. It also enables marked improvements in patient safety through greater accuracy of measurement for medical errors via detailed reporting of post-operative complications and other related injuries. Lastly in terms of clinical gains but certainly not least, ICD-10 will improve research and development, disease management and comparison of use data with the rest of the world.

On the financial side, ICD-10 provides greater ability to measure healthcare via increased analytical capabilities for reimbursement methodologies, and ultimately eliminates some of the current documentation required to file claims. Payor understanding and use of diagnosis codes can eliminate the need for obtaining additional information from providers and decrease the need for attachments. Additionally, the expanded ICD-10 code set will enhance CPT coding and allow greater reimbursement accuracy by providing more transparent procedure documentation that facilitates correlation between patient condition and services performed.

However, getting there will involve some significant systemic changes. Major changes to the super bill, requisition forms, information systems and the interfaces between them as well as database reevaluation are just a few challenges on the infrastructure side of healthcare. Equally daunting but necessary are the changes required for workflow, processes and training for internal coding and billing staff and primary care providers.

Although these changes run throughout the healthcare continuum, laboratories will have the additional tasks of helping to train ordering physicians on a number of issues including medical necessity changes and altered coverage determinations. These responsibilities fall to the lab during a time when man-hour costs, claim rejections and decreasing margins are already heavily impacting financial returns.

Other Uses of Specific Data

The increased specificity of information relayed to payors from ICD-10 will enhance quality review and improve pay-for-performance measure analysis in addition to improving patient safety and evaluation of new treatments. Concurrently, the new code sets will also bolster governmental fraud and abuse monitoring programs.

Some of the primary governmental tools for preventing fraud and abuse include the comprehensive error rate testing (CERT), the recovery audit contractor (RAC), the Medicare administrative contractors (MACs) and the CMS Medically Unlikely Edit (MUE) programs. Although beneficial to the healthcare continuum in the main, labs must be prepared to deal with both the educational and payment system design components of claims processing to address these factors via a comprehensive ICD-10 conversion strategy.

Conversion Timetable

The CMS conversion milestones timetable has already passed the Phase One requirement of identification of all the impacted systems that are likely to be changed as a result of the transition to ICD-10 and the new ANSI 5010 transaction sets. These systems include laboratory information systems, billing, registration, claims submissions and scrubbing, test ordering, utilization and managed care reporting systems, not to mention data warehousing and interfaces between all of these systems.

Phase One also included vendor review to determine timetable and conversion plans. Vendor readiness is one of the biggest hurdles to achieving compliance with the new code and transaction sets. Determine early on if your current in-house or SaaS-based billing and revenue cycle management system can accommodate data format changes required for ICD-10 codes and when your vendor plans to upgrade the current system. The installation should be done early enough to test transactions through existing payors and other clearinghouses currently in use. Depending on the vendor or service contract, system upgrades may be included as part of ongoing maintenance costs.

2010 marked the beginning of Phase Two, where payors and providers are expected to perform the necessary upgrades that will enable use of the code and 5010 transaction sets. Phase Three commences in 2011, and will consist of external testing of the new transaction sets between providers and payors. The goal is completion by January 2012, followed by a go-live date of October 1, 2013, for ICD-10 conversion for diagnosis procedure code sets.

Training, Education, Documentation

When it comes to education, ICD-10 coders must increase their knowledge of anatomy and physiology in addition to knowing the most common disease processes and treatments to accurately and effectively work with the new code sets. Labs will be tasked with helping train ordering physicians on the intricacies of the code sets as they relate to medical necessity guidelines. This is a necessary step in order to provide labs with adequate information to conduct billing activities. AHIMA provides an online skills assessment tool to help determine the current ability of the individuals who need to be trained, along with a series of training tools.

Some of the edits that need to be updated in the billing system will include local and national coverage determinations as well as outpatient codes, which have a number of diagnosis related edits. Payor-specific diagnosis requirements will also need to be updated. In addition, education and support for required documentation changes in patient charts will be essential.

Finally, the National Center for Health Statistics has created the conversion mapping database known as General Equivalency Mappings (GEM) that will aid providers in creating crosswalks for bidirectional conversion of ICD-9 and ICD-10 codes. Labs and other providers will have to determine the best way to deal with bidirectional crosswalk mappings to process claims that are pre and post-ICD-10. One-to-one crosswalk equivalencies are far from certain, so claim coding automation assist technology and automated revenue cycle management error processing capabilities can help keep claims on track and minimize errors/returns.

CMS predicts a 10 percent return claim volume in the first year due to ICD-10 conversion while others predict even higher percentages of returned claims. This is on top of the additional labor costs required to retrain ordering physicians and a potential reduction in coder productivity.

For labs and other healthcare providers, how quickly you address these issues now will determine how quickly you can recover from the transition and make the most of ICD-10 both financially and clinically.

Lale White is CEO of XIFIN Inc., San Diego.