Updated on: January 31, 2014

The Laboratory’s Role in the ICD-10-CM Coding System Transition

Original story posted on: April 18, 2011

Slowly but surely, the federal government is making its way toward the cessation of the ICD-9-CM coding system and the implementation of the new ICD-10-CM coding system.

Although still two years away from implementation, the wheels of a change this big are moving, and, like all providers, laboratories need to know what’s going on and what they will have to do to get ready.

Making it Official

On January 16, 2009, the Centers for Medicare & Medicaid Services (CMS) issued two final rules that contain details of the new system.

In the first final rule, CMS announced that two greatly expanded ICD-10 code sets would replace the currently used ICD-9 code sets for diagnoses and inpatient hospital procedures. The compliance date for use of these new code sets is October 1, 2013. By this date, entities must implement ICD-10 because they will no longer be able to use ICD-9 codes.

January 1, 2012, is the implementation date for the second final rule, which adopts an updated X12 standard (version 5010) for certain electronic health care transactions. This updated version can accept the new ICD-10 codes.

Making it Happen

It is clearly an understatement to say that the transition to the ICD-10 classification system will be, understandably, complex and expensive since it necessitates a massive overhaul of the medical coding scheme. However, the benefits will outweigh the transition costs.

Examples of benefits include more accurate payments, fewer miscoded and rejected claims, better recognition of new technologies and services, and better data for analysis.

Numerous provider associations, including the American Clinical Laboratory Association (ACLA), commissioned a study to estimate the costs of transition for physician practices. The study identified the following as key areas of expense:

Staff education and training;
Business-process analysis of health plan contracts, coverage determinations and documentation;
Changes to superbills;
Information technology system changes;
Increased documentation costs; and
Cash flow disruption,

Affect on Laboratories

Although physicians will need to make big changes, there is some good news on this front for laboratories.
Under the Health Insurance Portability and Accountability Act (HIPAA), laboratories are considered “indirect” (versus direct) providers. That means that they rarely have a face-to-face relationship with patients. Because of that, they must depend upon the ordering provider to submit the correct diagnosis code, which labs will then submit to third-party payers for payment.
Lab managers and coders certainly can’t force ordering providers to give you ICD-10 diagnosis codes, but they can make and implement a plan to educate them about the need to do so. Hopefully, by the ICD-10 implementation date, they will know how to use the new diagnosis code system correctly so you can benefit.

Another important element of this transition is the standardization of crosswalks and crosswalk implementation. In a summary of the ICD-10’s affect on laboratories, the ACLA stated the following.

“Just as payers have expressed interest in ‘backward’ mappings from ICD-10-CM to ICD-9-CM for internal processing purposes, indirect providers such as clinical laboratories need a forward mapping from ICD-9-CM to ICD-10-CM for claim submission purposes for those instances in which an ICD-9-CM code is received from an ordering provider when an ICD-10-CM code must be reported to the payer.  Both backward and forward crosswalks should be standardized across the industry to avoid inconsistent results.”

As the time of implementation gets closer, more information will be presented by industry experts.

Information Source

Several resources to help providers get ready for the transition from ICD-9 to ICD-10 can be found on the Centers for Medicare & Medicaid Services at http://www.cms.gov/ICD10/.

About the Author

Randy Wiitala, BS, MT (ASCP) conducts CPT coding and chargemaster assessments, reviews provider operations for regulatory agency compliance, evaluates administrative policies and procedures and assists in the development of quality-assurance programs. He's also a frequent seminar presenter, speaking to hospitals, corporations, clinics, state hospital associations and professional organizations. These educational programs cover a variety of areas, such as coding, regulatory compliance and reimbursement for laboratories; chargemaster system management; and APCs. Randy contributes to a number of MedLearn books, as well as the Laboratory Compliance Manager newsletter. He is the project lead on MedLearn’s RAC Outpatient Data Analytics. He is a member of the American Society of Clinical Pathologists, the National Certification Agency and Healthcare Financial Management.

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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.