May 27, 2015

May 27, 2015 | Factsheet on Health Care

ICD-10: A Costly and Complex Health Care Coding System Needs Reform

New Disease Coding System Scheduled for October 2015

  • The International Classification of Diseases (ICD) is a system of diagnostic codes for reporting disease, identifying global health trends, and collecting global statistics.
  • Since the 1980s, the U.S. has linked this system of diagnostic codes to reimbursement for health care services.
  • On October 1, 2015, the U.S. Department of Health and Human Services will require practicing physicians and other health care providers to adopt the latest and vastly more complex version—ICD-10.

ICD-10 is Costly and Complex

  • Converting from ICD-9 to ICD-10 means physicians will have to deal with an eightfold increase in the total number of codes in addition to an increase in the length of characters per code. ICD-10 Clinical Modification totals 68,000 different codes and 87,000 PCS codes.
  • Implementation cost estimates of adopting ICD-10 range from $10,000 for small practices up to $3 million for larger, multi-specialty groups. This does not include recurring costs from productivity loss and reimbursement delays.
  • Although some larger organizations have made considerable investments in transitioning to ICD-10, many smaller practices, those least able to absorb transition costs, report they are unprepared.

A Policy Way Out

  • Delink disease classification from billing. Congress should delink the disparate goals of research and reimbursement. While updating the diagnostic system for disease classification might be in order, it should not be connected to the billing process.
  • Develop a new billing process that is less burdensome. Congress should focus its attention to developing a more appropriate coding system that makes the billing process less, not more, burdensome.
  • Make adoption of the ICD-10 system voluntary. Until Congress puts in place an alternative billing system, providers should have a choice of continuing to use the ICD-9 or adopting the new ICD-10. This would ensure those providers that have invested in updating to ICD-10 are not penalized while also not forcing such an investment on others.

About the Author

Related Issues: Health Care