Effectively using information technology to reduce cost is a focus of Health Care Reform. New mandates are an opportunity to drive down cost while improving the quality of health care delivery using the richer data set inherent in the International Classification of Diseases (ICD-10) mandated for use on October 1, 2013.

The change to ICD-10 is characterized as the health industry’s equivalent of Y2K to the 10th power¹. The complete ICD-10 code set is nearly ten times larger than the ICD-9 code set it is replacing. Further complicating the federally mandated deadline is the fact that before ICD-10 can be put into production, the switch from HIPAA 4010A1 to HIPAA 5010 must be in place.

ICD-10 – Complex and Potentially Costly

The “Y2K problem” centered on the practice of storing a year as two characters instead of four. The comparison to the ICD-10 challenge is appropriate; the ICD-10 codes are larger than the ICD-9 values, but the comparison stops there. The difference in length between ICD-9 and ICD-10 is trivial compared to the sheer volume of new values:

Other countries have already switched to ICD-10, but the version the U.S. has chosen to implement is more complex and granular.

The increased number of codes, the change in code length, combined with considerably more code specificity means the replacement of ICD-9 requires significant planning, system modifications or upgrades, along with training and other investments. Potentially all departments and their support systems in all U.S. health organizations, providers and plans alike, are affected.

4010A1 to 5010 – Upping the “Ante”

Adding to the risk, complexity, and costs is the fact that HIPAA 5010 capabilities are a “must have” in order to support ICD-10. Beginning on January 1, 2012, the HIPAA standard transactions, first mandated in 2000, covering the health claim process, will change version. The original version does not accommodate ICD-10.

Not a Crisis an Opportunity

Some call the switch to ICD-10 coupled with HIPAA 5010 a crisis; however it is a crisis that health plans, providers, and other health organizations should take advantage of to redefine business process and technology to accelerate administrative simplification. This is an opportunity that will allow health organizations to reduce dependencies on antiquated systems and allow for true innovative system consolidation.

ICD-10 and Electronic Health Records

The key for successful migration to ICD-10 and EHRs is to establish an environment where new and old technology, along with like and unlike data sets, coexist and exchange information while reengineering existing workflow. ICD-10 and the inherent richer data set enable health organizations to:

• Predict future health issues by trending a richer data set
• Increase patient safety
• Administer higher quality care
• Measure outcomes more effectively
• Reduce friction in claims and payment processing because of significantly more granular diagnoses
• Make clinical and financial decisions faster – more specific information allows clinicians to evaluate previous diagnoses faster, leading to more accurate decisions – improving the quality of healthcare in the process

Get Ahead of the Curve

The transition to the new HIPAA 5010 and ICD-10 Federal mandates present a unique and time-sensitive opportunity for health organizations. Health Plans and Providers should act quickly to take advantage of this critical opportunity to meet the new mandates while cutting costs and complexity and growing market share.

Let WPC be your strategic partner for the changes ahead. We would be pleased to speak with you to help you determine the right path for your organization. Contact us today.

1. “Replacing ICD-9-CM with ICD-10-CM and ICD-10-PCS: Challenges, Estimated Costs, and Potential Benefits,” Robert E. Nolan Company, October 2003