ICD-10 - The future of the Medical Coding System

This past week, The Wall Street Journal reported on the plan of U.S. government regulators to overhaul the aging coding system, the International Classification of Diseases (ICD), that physicians and hospitals currently use to bill insurers. The new system, called ICD-10, to which most of the world’s developed countries have already adopted, is expected to result in a 10-fold increase in the number of codes for ailments and procedures. One extreme example from the current system is the single billing code for angioplasty, which will grow to 1,170 billing codes to provide more detailed descriptions as to the locations and devices involved. The new system of 155,000 codes consists of both diagnosis and medical procedures codes, and while hospitals use both types of codes, physicians use only diagnostic codes from the current system. Use of 9,200 codes from the American Medical Association (AMA) that were created in the 1960s are still being relied upon for procedure codes. The current coding system is simply no longer expandable.

From a business perspective, several potential pros and cons are associated with a move to the new ICD-10 medical-coding system:

• Pro: Increase in patient detail.
• Pro: Increase in payments.
• Con: Increase in cost.
• Con: Increase in errors.
• Con: Existing hospital systems must be upgraded to to handle ICD-10

These results pose corresponding systems implications from an architectural and business quality perspective:

• Usability is set to increase in the long-term due to the additional patient detail that will be made available. From a holistic perspective, however, usability may also be decreased in the short-term due to the additional complexity involved, especially for private practices that have limited staff.
• Cost and benefit are expected to be different for each provider, since such qualities are highly dependent on the circumstances of individual health care providers. More advanced surgeries, for example, which are not currently reflected in the coding system, may provide hospitals with higher payments, but the additional cost to adapt to the new system by private practices may not be proportionate to realized benefits in the short-term.
• Reliability may be decreased in the short-term. The Centers for Medicare and Medicaid Services (CMS), for example, expects a coding error rate of as much as 10%, and a study by the Blue Cross and Blue Shield Association of insurers predicts this rate will likely be 10% to 25% in the first year. The deadline to implement the new coding system is currently set for three years from now, and the group expects that an extension of two years might help reduce this error rate.
• Extensibility, a design principle that enables future growth, is expected to increase. Current billing code sections are being used to store codes for unrelated treatments, due to the lack of room available in the proper sections, and this adds to complexity.

Proper, timely planning for the move to the new coding system will likely minimize risk for health care providers.