Procedure Classification Systems: ICD-10-PCS Represents a Long-Term Solution

Original story posted on: March 30, 2014

Hospital inpatient procedure reporting is governed primarily by the Uniform Hospital Discharge Data Set (UHDDS) reporting criteria, in addition to payer-specific guidelines. The UHDDS indicates that all “significant procedures” should be reported in the short-term, acute-care hospital setting. It defines “significant procedures” as those that meet any of the following criteria: being surgical in nature, carrying a procedural or anesthetic risk, or requiring specialized training to perform. With such a broad description, one is hard-pressed to pinpoint an inpatient procedure that would not meet at least one of these criteria. These reportable procedures would include such common objectives as incision, excision, repair, suture, destruction, etc. The wide range of procedures meeting the UHDDS reporting criteria may differ from those that are required by payers, however. For example, the Centers for Medicare & Medicaid Services (CMS) requires reporting of all procedures that impact the MS-DRG. And procedure reporting guidelines do not end there. In just 18 short months, all entities covered by HIPAA will be required to utilize the 2014 version of the ICD-10-PCS code set to report inpatient procedures. The new Procedure Coding System (PCS) contains 71,924 codes andreplaces ICD-9-CM Volume 3, which contains 3,882 codes. The dramatic increase in the volume of codes is due in part to an expanded terminology that allows all substantially different procedures to have a unique code. There is also the use of a new multi-axial approach that results in the building of an ICD-10-PCS code consisting of seven characters. This is in stark contrast to ICD-9-CM procedure codes, which are assigned based on action terms and consist of three to four digits. It is this transition to a multi-axial structure with expanded terminology that has contributed to the nearly 19-fold increase in procedure code options. The new structure allows for the reporting of enhanced specificity and greatly improves expandability. This alleviates the need to transition to yet another procedure reporting classification system in the decades to come. The PCS structure is such that it can accommodate the need for future expansion to capture new approaches, techniques, technology, and devices to keep pace with our thirst for improved data capture regarding outcomes and quality of care.

The use of ICD-10-PCS was mandated by the HIPAA final rule published in the Federal Register on Jan. 16, 2009. The final rule confirmed that all three levels of the Healthcare Common Procedure Coding System (HCPCS) procedure codes and the Level I Current Procedural Terminology (CPT), Level II National codes and Level III Local codes will continue to be utilized, as in the past, for hospital outpatient and physician procedure billing. The retained use of CPT and HCPCS for reporting procedures in the outpatient arena does not mean that physicians have dodged the ICD-10-PCS bullet. In fact, the use of ICD-10-PCS will require detailed operative notes in order to completely, accurately, and consistently report inpatient procedures.

Complete Reporting of all Procedures

Unlike ICD-10-CM for diagnosis coding, ICD-10-PCS for procedure coding does not include unspecified codes. While it does utilize not otherwise specified (NOS) and not elsewhere classified (NEC) categories to a limited degree, these procedures are still recorded with more preciseness than their ICD-9-CM predecessors. Even without unspecified codes, all procedures can be assigned somewhere. Of course, the goal is to take full advantage of the new code set and assign each character as specifically as is allowed. In order to assign a complete code consisting of seven characters, the description of the procedure must contain enough detail to select an appropriate value for each character. For example, when coding a craniotomy, the operative note must include enough documentation to first determine the objective of the procedure, such as “division” or “drainage.” Next, the approach used must be discerned, in this case open, percutaneous, or percutaneous endoscopic. And then we must identify if there was any device left in place after the procedure was completed (such as a drainage tube).

The choice of values for each character results in a multitude of code variations. This is in comparison to ICD-9-CM Volume 3 procedure reporting, which offered only three options for a craniotomy (and only one indicating the true objective of the procedure: decompression of a fracture). Failure of physicians to supply the level of detail necessary to build a complete code will necessitate physician clarification.

Accurate Reporting of Procedures

Unfortunately, it does not end there for the physician. Lack of specificity in an operative or procedure report may result in a less specific code being assigned. This can have a negative financial impact on hospitals. Failure to clearly define the objective of the procedure, the approach used, or the specific anatomical site identifying where the procedure was performed may result is a less specific code that groups to a lower-weighted MS-DRG. There is also concern over contradictory documentation. This can lead to inconsistent coding, improper payment, and the potential of denials during external record review. A concurrent clinical documentation improvement program will alleviate incomplete, non-specific, and inconsistent documentation, ensuring that your records support the most appropriate procedure code assignments. If your facility does not have a concurrent clinical documentation improvement program, a post-discharge query will be necessary to combat inadequate documentation – and that will most certainly delay billing and payment.

About the Author

Angela Carmichael is a registered health information administrator, a clinical documentation improvement practitioner and a certified coding specialist for both hospital and physician services. She is an MBA with extensive experience in the health information management field, specializing in various payment methodologies, coding education, compliance, and management. Her experience includes services provided in the hospital, physician office, consulting, and insurance settings. She has expertise in technical writing, public speaking, testing, and training development.  In addition, Angela is an American Health Information Management Association (AHIMA)-approved ICD-10-CM/PCS instructor and ambassador.

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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.
Angela Carmichael