February 1, 2016

ICD Codes May Be Past Their Shelf Life

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In business as well as in life, it’s always interesting to look back on what was critically important a year ago to see if those things are as big a deal now as they were then.

Back in January 2015, one of the hot topics in healthcare was the transition from International Classification of Diseases, Version 9 (ICD-9) to ICD-10. Providers and payers both worried whether they would be able to meet the looming Oct. 1, 2015 deadline, and various organizations continued pleas to delay it for the third time right up until the due date.

While one notable exception was granted, almost everyone else made the transition to the new standard with only minor glitches here and there. Call it another triumph for health IT.

Unfortunately, the celebration period won’t be long, because the sad truth is that the U.S. was so far behind the rest of the world in implementing ICD-10 that ICD-11 is already on the horizon. The World Health Organization (WHO) website indicates that the organization is looking for beta participants for the new codes.

The final version is due in 2018, although if current trends hold, it’s likely that U.S. healthcare providers and payers won’t be expected to implement ICD-11 until several years after that. After all, the WHO released the final version of ICD-10 in 1992, and the U.S. clinical modification (ICD-10-CM) became available as early as 1999.

The larger issue, though, is whether the whole concept of using ICD codes for billing purposes has exceeded its shelf life – especially in the era of digital health information.

Filling a Void

With all the angst regarding ICD-10 implementation, it was easy to forget that ICD codes were originally introduced in the 1890s as a way to monitor diseases throughout the world. The standardized reporting made building statistical models easier, especially since all patient records and reporting were paper-based. The WHO became the administrator of ICD codes in 1946. 

The idea of using these same codes as a basis to reimburse insurance claims came later. Several countries realized that having a ready-made system of classification for healthcare procedures would provide a good structure for all the data being gathered from healthcare providers.

The codes could act as a form of shorthand, expediting the claims process by reducing the need to read through entire charts or notes to understand the problem and treatment provided. Using these codes meant payers could reduce their administrative burden and providers would receive reimbursement more quickly. 

Technology Changes the Game

A disruptive change occurred, however, between ICD-10’s original rollout in 1992 and today: the ubiquitous use of technology. While there are still a few paper-based holdouts, for the most part pen and paper have been replaced by PCs, tablets, and smartphones in clinicians’ daily workflows.

As of the end of 2014, 76 percent of non-federal acute hospitals had adopted at least a basic electronic health record (EHR) system, and nearly 97 percent reported having a certified EHR technology. Ambulatory providers are showing a similar commitment. Given that the penalties for failing to meet the meaningful use provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act become more severe as time goes on, these numbers are expected to grow.      

The key takeaway is that today, much of the data on healthcare services already is being captured in an electronic format that is standardized and easy to share. We are even adding the ability to work more easily with data being captured in unstructured fields thanks to advances in natural language processing and cognitive computing.

So, why, exactly, do we need to force clinicians to go through the extra steps of looking up and assigning another code to the claim? It just seems like wasted effort. 

EHRs Become the Claim

Rather than going through another costly, resource-diverting, headache-inducing conversion from ICD-10 to ICD-11 a decade from now, it seems like it could make more sense to start working today on the ability to submit EHRs directly for claims processing. Think of the impacts.

All of the detail about a particular healthcare encounter would be submitted at the time of the claim being filed. If everything is submitted correctly and the enabling technology is in place, the claim could be administered automatically – no human would have to get involved. This alone could potentially do for modern claims processing what ICD codes did originally – speed the reimbursement process and reduce administrative overhead.  

For claims that do require hands-on review, all the deeper information about the encounter would already be with the payer, eliminating the need to deal with all the back-and-forth of a separate request. The payer’s on-staff medical professionals could review the information immediately and concerns could be expedited and resolved, reducing the burden on both providers and payers. Given the healthcare industry’s recent transition to risk-sharing arrangements such as bundled payments and other forms of value-based care, having all the information about an encounter in one place will become even more important.

Of course, there’s still the matter of the WHO’s original intentions of tracking disease worldwide. That could be accommodated by developing algorithms that recognize the data in EHRs and automatically convert it to the correct code – sort of computer-assisted coding on steroids. The data can then be review and corrected, where necessary, by coders at the payer level to ensure that the WHO is receiving quality information.

Meeting the Challenge

The biggest question is whether payer back-office technologies developed in the pre-Internet days of the early-to-mid 1980s will have the processing capabilities to manage this huge onslaught of data. It may require a long-overdue technology refresh to a more agile, relational database model. But the investment will be worthwhile, as it not only would solve this issue, but it ensures that payers and providers are prepared for the 21st century and beyond.        

As we have seen, transitioning from one version of ICD codes to the next is expensive and time-consuming. And with recent advances in healthcare technology, the entire concept may be obsolete. 

Rather than simply following the same well-worn path, perhaps it’s time to look at the issue with fresh eyes and determine whether other alternatives make more sense in today’s world. 

Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.

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