ICD-10: The Big Healthcare IT Change You Didn't Expect

Updated medical classifications for billing purposes could cause problems for insurers, and may end up jacking up healthcare costs.

Larry Loeb, Blogger, Informationweek

September 30, 2015

3 Min Read
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US healthcare will undergo a significant change Oct. 1, which could cause major disruptions, and most of the public has no idea that it is coming.

On that date, all healthcare providers and facilities must start using ICD-10, the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD), a medical classification list from the World Health Organization (WHO), to describe medical problems for billing.

The updated list contains codes for diseases, signs and symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or diseases.

The American Medical Association notes, "The medical codes America uses for diagnosis and billing have not been updated in more than 35 years and contain outdated, obsolete terms."

The AMA also stated, "The use of ICD-10 should advance public health research and emergency response through detection of disease outbreaks and adverse drug events, as well as support innovative payment models that drive quality of care."

However, Medicaid programs in California, Louisiana, Maryland, and Montana will not be fully converting from the ICD-9 to the ICD-10 coding system on Oct. 1. Instead, those states have received approval from the Centers for Medicare & Medicaid Services (CMS) to take incoming claims coded in the new ICD-10 system, convert them into ICD-9 codes, and then use the older system to calculate payments to healthcare providers. This so-called "crosswalk" approach is needed because those state systems are not yet ready for the transition.

Since the eventual transition to ICD-10 will happen no matter what, debate about adoption serves no practical purpose. But there is much to consider about the effects it will have on an enterprise.

The potential disruption to insurer payments is large. Employees may not be able to know what their copays will be if the insurer runs into implementation problems.

Determinations of claim benefits can be severely delayed anywhere along the chain of clearinghouses and insurers. HR departments need to be prepared to deal with employees expressing concerns about the process.

[Read how the CIO of Blue Cross sees big data as the future of healthcare.]

Also, the usual way health insurance premiums are calculated for an enterprise in the upcoming year may be affected.

Insurers usually base the premiums they charge on how much they have previously paid in claims. With the payment flow disrupted by this transition, inaccurate amounts may be used in the calculation by an insurer. They may estimate either too much or too little. Since employees pay a percentage of this insurance, a large swing could potentially an unwelcome surprise. Again, HR may have to step in here.

Most employees don't know this transition is occurring this week. It's up to management to educate and prepare them for change, and get upstream of any reaction that blames the company for a situation that it has no control over.

About the Author(s)

Larry Loeb

Blogger, Informationweek

Larry Loeb has written for many of the last century's major "dead tree" computer magazines, having been, among other things, a consulting editor for BYTE magazine and senior editor for the launch of WebWeek. He has written a book on the Secure Electronic Transaction Internet protocol. His latest book has the commercially obligatory title of Hack Proofing XML. He's been online since uucp "bang" addressing (where the world existed relative to !decvax), serving as editor of the Macintosh Exchange on BIX and the VARBusiness Exchange. His first Mac had 128 KB of memory, which was a big step up from his first 1130, which had 4 KB, as did his first 1401. You can e-mail him at [email protected].

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