Are You Ready for ICD-10?

ICD-10 is scheduled for October 1 even though some observers think another delay is possible. But physicians and hospitals need to be preparing since the odds seem to favor implementation later this year.


Will ICD-10 be Delayed Again?

Congress is scheduled to hold hearings in the first quarter to assess CMS and industry readiness. Most industry participants and many physicians are prepared and strongly support moving to ICD-10, without further delay. In contrast, the AMA remains opposed.


ICD-10 has become so controversial that a “back room deal” in Congress in late March 2014 postponed implementation from 2014 to 2015. In many ways, the controversy is surprising, given the benefits of more specific diagnosis information:

  • Improved patient outcomes: e.g. diabetes has six times as many codes, to help physicians better match patients with specific programs.
  • Better information for outcomes research from more detailed data mining: e.g. insight into adverse events such as falls and hospital-acquired conditions. Areas of injury research and trauma services evaluation, for example, could witness a marked improvement …, AHIMA reports[1].
  • Potential financial benefits from billing for more complex treatments associated with sicker, high-risk patients and more accurate payment for new procedures.
  • After the initial growing pains subside, the added degree of specificity required for clinical documentation is also expected to result in fewer rejected claims[2].
  • Over time, practices, hospitals and individual physicians will have more detailed performance data to benchmark versus their peers.


Despite these benefits, the perceived costs and risks have more attention with some physicians and politicians. The primary concerns are:

  • The added costs of converting systems, training staff, etc. A widely circulated AMA study[3] in February 2014 shows significant costs, especially for smaller practices. A more recent AHIMA study[4] suggests these costs are overstated by a large amount.
  • Other government mandates imposing costs and burdens on physicians and hospitals in the same timeframe. These include Meaningful Use, PQRS, Value Based reimbursement, etc.
  • Physician productivity loss from dealing with more codes.


Without a crystal ball to see if ICD-10 gets postponed again, hospitals and physicians have no choice but to be prepared. Even if you completed an assessment to prepare for 2014 implementation, it is time to update it since vendors and workflows may have changed in the past year. And we will know by early April if another delay happens since it is extremely unlikely that Congress will intervene after that date (driven by the need for another “SGR fix”).


It is important to remember that ICD-10 is not just a claims submission issue.  Transitioning to ICD-10 affects the “clinical encounter, patient scheduling, lab and diagnostic imaging orders, pre-authorizations, clinical trials, quality reporting and other areas of a medical practice.”


Preparing for ICD-10

This article emphasizes steps that hospitals and physician groups need to take during 2015:

  • Train staff
  • Train physicians
  • Verify that all systems are updated
  • Review payer contracts and procedures
  • Financial contingency planning
  • Test, test, test


Train Staff

By now, hospitals and physician groups should have a specific plan and timeline for training each employee. If not, creating the plan is an urgent priority.


ICD-10 code training should start in the first and second quarters, using the final ICD-10 codes. Training can include sending key employees to classes so they can train others, on site classrooms, webinars and Internet-based programs.


Training for coder should have already started so that, ideally, they can be certified in ICD-10 before October.


If coding is done by an outside party, it is important to review their training plan and assure that you are confident in their ability to be ready.


Train Physicians

Yes, physicians must participate in the training process. ICD-10 challenges the way many physicians document, demanding a greater level of specificity. Best practices include:

  • Identify the most common 10-20 ICD-9 diagnoses and compare current documentation to ICD-10 requirements. From this analysis, documentation strengths and weaknesses are seen including areas where documentation must be changed.
  • Audit current documentation to find patterns of missing information. Specialists should look carefully at referrals (orders).
  • Create templates in EHR systems or paper-based templates to guide required documentation in common clinical areas.


Physicians who have coding done from dictated reports need to ask their coders if their dictation is sufficient for ICD-10.


Verify that Systems are Updated

Practice management, EMR, billing and other systems must be upgraded to store and transmit both ICD-10 and ICD-9 codes. At this point, a firm upgrade schedule should be in place for each system to complete no later than the end of the summer and preferably sooner.


Maintaining both ICD-9 and ICD-10 is critical so that claims may be submitted both before and after October 1. Practices and hospitals that participate in clinical trials or research studies will also need to have both coding systems available.


It is of utmost importance that all systems are tested well before October 1. Testing at the last minute will be risky, as there are always issues to iron out and vendors and insurance carriers are highly likely to be back-logged in the third quarter, especially September.


Make sure ICD-10 transition terms and schedules are in vendor contracts. This includes being clear about incremental costs, including testing.


Review Payer Contracts and Procedures

Insurance contract negotiations need to include ICD-10 so that services billed with ICD-9 are covered when ICD-10 is in effect, and at the same rate. In the future, carriers are expected to change their rates to be in line with more specific ICD-10 codes.


It is also critical to stay in close touch with your major payers to know which will not be ready. We saw this with 5010, where some carriers were not ready on January 1, 2012 and billing had to be via 4010 until their systems could accept 5010. If you use a billing service, this is an area they will handle on your behalf.


Financial Contingency Planning

Hospitals and physician practices must have a budget to implement ICD-10 including:

  • Software modifications,
  • Education for physicians, coding staff, etc.,
  • Testing, and
  • Potential temporary staffing to assist with increased work during the transition.


Contingency planning should include a plan for possible cash flow interruptions. One common approach is a bank line of credit (LOC). Many experts recommend a reserve of 2 to 3 months of cash flow. The LOC must be established in advance of the need because it is much easier to get the LOC when the hospital or practice can demonstrate a steady cash flow than when cash is delayed. However, many LOC’s have a fixed term, often 12 months. Therefore, the optimum time to establish the LOC is late summer.


Test, Test, Test

An effective ICD-10 plan must assure that the organization is ready prior to October 1. The most obvious area for testing is with systems, especially those that affect payment. Unfortunately, testing with insurance companies depends on their testing schedules. Whether your billing is done in house or by a billing service, make sure the test schedule is established and monitored.


Testing of staff and physicians may be more challenging since it can’t be done too soon but it must be done far enough in advance to correct any issues identified. One best practice is to perform “dual coding” for a select period of time: i.e. create ICD-9 codes needed for current operations and ICD-10 at the same time. While this approach is not always feasible, it will identify many issues that can be fixed before October. An ideal timeframe for dual coding is mid-summer.



Whether we personally “like” ICD-10 or not, it is a pre-requisite for many advancements in healthcare. But these longer term benefits come with short-term costs that must be addressed now. This article has outlined the major steps that hospitals and physicians need to take in 2015 to successfully implement ICD-10 on October 1. While some issues are sure to arise, organizations who take these steps will find the transition much easier than those who do not prepare adequately.

[1] Physicians Practice, October 2013. “The Benefits of ICD-10 to Medical Practices.”

[2] Ibid.

[3] AMA Press Release, February 12, 2014. “ICD-10 Cost Estimates Increased for Most Physicians.”

[4] Journal of AHIMA, November 2014, “Cost of Converting Small Physician Offices to ICD-10 Much Lower than Previously Reported.”