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Updated on: March 14, 2016

Property and Casualty/Workers Compensation Readiness for ICD-10

Original story posted on: May 5, 2014

Implementing ICD-10-CM and PCS in the Property and Casualty (P&C) and Workers Compensation (WC) industries is similar to that of healthcare insurers. Even though these payers are non-covered entities under the Health Insurance Portability and Accountability Act (HIPAA), the plans were to implement with the rest of the United States with dates of service effective October 1, 2014, across all coverages. So now what do we do, since Congress has delayed the date until 2015? Does the date change affect our review processes and software applications? In our industry, nothing changes, because we anticipated delays and the fact that we will see bills submitted with both code sets. It is understood that not all claims will be submitted using the proper format by non-covered entities and those practices/providers who have typically billed in only P&C and WC, regardless of an implementation date that is set in stone.


Acknowledgement regarding the amount of confusion and alarm that’s been spreading regarding the introduction of ICD-10 is the first step to accepting the industry standard of ICD-10. It’s also important to understand that P&C and WC will not be able to take advantage of the benefits ICD-10 brings without adoption. This standard is a benefit for patients as well as this payer industry in communicating why the patient is being treated for the incident. In workers’ compensation and auto claims it is important to understand pre-existing conditions because separate policies are held by the patients and claimants that cover them only for the related injuries.

ICD-10 introduces more than 68,000 codes for ICD-10-CM used by hospitals and other healthcare facilities to describe and document the patient clinically. Also included are more than 75,000 codes for ICD-10-PCS. The increase in codes can certainly seem overwhelming, but they will be introduced to specifically improve the evaluation of medical care and to enable specificity of patient diagnosis, rather than prescribing to a general area of concern. It is this specificity that can be leveraged to better treat patients by clearly articulating the nature of the illness. For P&C and WC, this significant increase in detail allows us to ensure that the patient is being treated in accordance with the nature of the claim.

In the P&C and WC industries, we can no longer use the facade that we are not subject to HIPAA and therefore ICD-10 is not required. The problem is there is new legislation introduced since the HIPAA for electronic transaction security (HITECH Act) that does require our industry to pay attention. In addition, medical bills are submitted by the medical providers, who are covered entities under HIPAA. These covered entities are currently required to submit ICD-10 codes as of October 1, 2015. If the P&C and WC industries are unable to consume the bills submitted by the covered entities, medical bills will be impossible to review and pay appropriately. ICD-10 is a communication tool to payers in all aspects of healthcare. ICD-10 describes what is wrong with a patient and, if used appropriately, can communicate how the injury occurred in more granular detail than ICD-9.

There has been much discussion about the outliers within the new classification system to basically debunk the usefulness of the ICD-10. In fact, there is currently a bill in the US House (HR 1701) introduced by Rep. Ted Poe (R-TX2) with a companion bill in the US Senate (S 972) called the “Cutting Costly Codes Act of 2013.” Outliers like “Being hit by a turkey” are used to describe the classification and to generally get a laugh at ICD-10’s expense of implementation. Unfortunately, HR 4302, the “Doc Fix” bill, has been signed by the President to delay ICD-10 by one year, until October 1, 2015. This bill was supported by many of the supporters of HR 1701, so they got their way, but in a stealth manner, without consideration of the cost to the entire industry.

Health Information Management (HIM) professionals are experienced in analytics, clinical review, bill review, data abstraction, and paying medical bills, and clearlyunderstand the value of delineation of a concise diagnosis consistent among providers. Obtaining a diagnosis from one provider that is understood by another and is complete in its description is not only efficient but provides information for appropriate patient care. The delay of ICD-10 only delays the implementation of more precise programs that were designed to measure the quality of patient care.

ICD-10 can also be valuable information for car manufacturers all over the world in consistency of creating safer vehicles. ICD-10 will actually identify the side of the body injured in an auto accident or whether the burn received by the patient was from an airbag deployment. If the value of the classification systems is discussed, we should focus on the pertinent information applicable to P&C and WC, not erroneous, off-the-cuff examples that have been used to degrade moving forward. Undeniably, ICD-10 will impact more products and safety considerations for consumers, not just in automobiles, but in creating safer environments.

As an example of being concise for P&C claims: We deal with a high volume of “whiplash” injuries or “Cervical Sprain/Strains.” The current ICD-9 code for this injury is 847.0. ICD-10 has created three separate potential codes (these codes do not include all digits, just the classification for discussion) that distinguish the types of soft tissue affected by this type of injury. They are:

  • S13.4 – Sprain of ligaments of cervical spine

  • S13.8 – Sprain of joints and ligaments of other parts of neck

  • S16.1 – Strain of muscle, fascia and tendon at neck level

Encounter codes are omitted for this discussion but are an added value in having the ability to know whether trauma codes are a new encounter, follow-up care, or sequel. This distinction may provide more insight into the severity of an injury and potential treatments that are appropriate due to the specificity. Other codes in the ICD-10 injury section have more complete descriptions and allow the provider to describe more about the injury and the site. The additional information will cause efficiency gains between the insurer and provider, because less clarification and back-and-forth communication will be required.


Benefits and Challenges

The benefits of the new classification system to either the carrier or provider has been proven and documented. The benefits to the provider are:

  • Decreased administrative burden—less time for the provider staff making copies and responding to requests for additional documentation.

  • The new codes are distinct with a focus on outcomes, so they provide a key concept in coordination of care.

The biggest challenge with ICD-10 implementation, besides the start date, is the coordination of all aspects of readiness. ICD-10 touches many areas of a provider and carrier business and the impact cannot be minimized. One of the most valuable aspects of successful program design is coordinating the multiple areas using the code sets to take control of the process.

Providers may experience several different areas of issues during implementation that should be mitigated with proper management. These include:

  • Payers may delay payments due to readiness issues in P&C and WC, and carriers need to be able to handle the costs associated with changes in accounts receivable timelines.

  • Providers will most certainly take a productivity hit—this has been proven in many studies and observation of countries, such as in the Canadian implementation experience. The effect can be lowered with proper training, practice, implementation of Electronic Health Records (EHR), and the use of Computer Assisted Coding (CAC) software.

  • ICD-10 code sets take knowledge to operate and apply successfully. Providers can experience office staff frustrations mixed with enthusiasm.

  • Office and hospital staff will also likely be addressing issues caused by the payer not paying bills properly, and these issues can be morale changers.

Carriers will not need all individuals who encounter the new code sets to be experts in coding (although it doesn’t hurt to have a few key individuals with the skill set)—they just need to make sure they understand how the code set is used. Some of the issues P&C and WC carriers will have to resolve are:

  • Changes in medical bill review focus. Because ICD-10 code sets are so detailed, there is more opportunity to either have more straight-through processing or investigate more claims based on specific criteria.

  • Carriers will receive ICD-9 code sets even after the implementation date. This may be because the provider is not a covered entity under HIPAA or they have an exemption. Either way, carriers need to be versatile enough to handle both situations and pay bills appropriately.

  • The implementation date has been delayed a year. Will we see ICD-10 codes submitted prior to the October 1, 2015, date? Yes, of course we will. Systems and processes will need to address how the P&C and WC carriers handle mixed submissions.

  • Did you miss an internal area that uses ICD-10 during your assessment phase? If so, just pick it up and make the fix. Have an expectation that there may be unknowns; it helps eliminate frustration with your teams.

  • Carriers will need to understand any gaps in bill review systems after ICD-10 code set implementation. Some edits in bill review systems were made because ICD-9 was so non-specific, it created more work to review the care.

  • For third-party auto claims, carriers have to accept what is submitted. Short of getting a bill on the back of a napkin, carriers will need the ability to monitor and process claims with both ICD-9 and ICD-10 code sets together. It can be a nightmare, but bill review companies should be experienced enough to provide the service needed.

So Who is Ready?

P&C and WC being ready is dependent upon two things: Who the bill review vendor/partner is, and whether the IT departments at the carriers/payers can consume updates to claim systems on time to meet the October 1, 2015, effective date. Vendor/partner readiness is high, as most bill review companies consider readiness a factor in selling products and maintaining their customer base. If vendor/partners are not ready, they may very well be out of business in bill review as the diagnosis and evaluating inpatient stays high on the list of bill review priorities. Major players in this space are ready and await testing time frames with their respective customers.

Best Practices

Certain areas outlined are key for consideration in readiness with ICD-10 implementation. Best practices can only be achieved by utilizing the industry information where multiple options are available to guide providers and carriers through the multiple changes inherent in our transition to ICD-10. Ask any vendor/partner that integrates with your system and currently provides ICD-9 codes what they’re doing to insure readiness, and how they plan to connect all the various streams together to ensure a successful transition to this mandatory change. In addition, vendor/partners need to have the ability to work in both ICD-9 and ICD-10 code sets to process all bill types in P&C and WC.

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.
Michele Hibbert

Michele Hibbert-Iacobacci, CMCO, CCS-P, is vice president of information management and support at Mitchell International, Inc., Auto Casualty Solutions. Iacobacci’s responsibilities in senior leadership include managing health Information, litigation support, industry consultation, regulatory compliance, managed care, and professional services. Iacobacci is a Certified Clinical Coding Specialist (CCS-P), Certified Medical Compliance Officer (CMCO), a Fellow in CLM, and a member of CHIA and AHIMA.

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