Avoiding Confusion in Conversion: Ten Bullet Points to Help Providers Transition from the ICD-9 to ICD-10 Code Sets

After several delays, the U.S. Department of Health and Human Services issued a rule confirming that October 1, 2015 is the definitive compliance date for HIPAA-covered entities, i.e., health care providers, health plans, and health care clearinghouses, to transition from the ICD-9 code set to the ICD-10 code set.  HIPAA-covered entities must become ICD-10 compliant by October 1, 2015, regardless of whether they handle Medicare or Medicaid claims.

To assist health care providers transition to the ICD-10 code set, the Centers for Medicare & Medicaid Services (the “CMS”) has published helpful information online at www.roadto10.org, and will appoint an ICD-10 Ombudsman to assist with physician issues and questions by October 1, 2015.  The following ten items should further assist HIPAA-covered entities timely transition to use of the ICD-10 code set:


While HIPPA-covered entities must transition to the ICD-10 code set by October 1, 2015, the Current Procedural Terminology (CPT) and the Healthcare Common Procedure Coding System (HCPCS) code sets will continue to be used for outpatient, ambulatory, and office-based procedure coding.  Thus, on and after October 1, 2015, HIPAA-covered entities will utilize the following code sets:

ICD-10-CM Code Set: Sets forth diagnosis codes for use by all types of health care providers, including hospitals and physician practices, in all health care settings.

ICD-10-PCS Code Set: Sets forth procedure codes for use only in connection with the provision of inpatient hospital services, but excluding physician visits to hospitals.

Level I HCPCS, i.e., CPT, Code Set: Sets forth procedure codes for use in connection with the provision of all services other than inpatient hospital services, such as services provided in ambulatory settings, including physician office visits, and services provided in outpatient settings, including physician visits to hospitals.

Level II HCPCS Code Set: Sets forth codes that are used for medical items, supplies, procedures, and certain professional services that are not described by CPT codes.


The new ICD-10 code set includes codes requiring up to 7 digits (they can contain 3, 4, 5, 6 or 7 digits) as opposed to the current 5 digit convention in the ICD-9 code set.  Codes containing only 3 characters are headings for a category of codes that may be further subdivided by the use of 4th, 5th, 6th or 7th characters for greater specificity.  A 3 character code should only be used if it is not further subdivided.  Digits 4-6 provide greater detail with respect to etiology, anatomical site, and severity.  To be valid, a code must be coded to the full number of applicable characters.


New features of the ICD-10-CM code set include: designation of laterality (left, right, bilateral); use of combination codes for certain conditions and commonly associated symptoms and manifestations; use of the character “x” as a placeholder that stands for a character that has not been assigned a meaning but must be filled in to achieve the specified code length; reference to certain clinical concepts that do not exist in ICD-9-CM (e.g., underdosing, blood type, blood alcohol level); significant expansion of a number of codes (e.g., injuries, diabetes, substance abuse, postoperative complications); expansion of codes for postoperative complications and to distinguish between intraoperative complications and postprocedural disorders; and grouping injuries by anatomical site rather than by type of injury.


When coding, specific codes reflecting the most appropriate level of certainty known for an encounter should be considered first.  Specific diagnosis codes should be reported when they are supported by the available medical record documentation and clinical knowledge of the patient’s health condition.  If a definitive diagnosis has not been established by the end of the encounter, it is appropriate to report codes for sign(s) and/or symptom(s) in lieu of a definitive diagnosis.  When sufficient clinical information is not known about a particular health condition to assign a more specific code, coding should comply with payer guidelines for the use of unspecified codes.


The term “native coding” simply refers to assigning an ICD-10 diagnosis code based directly on clinical documentation.  Providers are strongly encouraged to natively code using ICD-10 code reference sources rather than using “crosswalks” in an effort to identify equivalencies between ICD-9 and ICD-10 diagnosis codes (crosswalking is the mapping of equivalent, identical, or similar information across two or more distinct data sets).


For the 12 month period following October 1, 2015, Medicare review contractors will not deny physician claims billed under the Part B physician fee schedule based solely on the lack of specificity of the ICD-10 diagnosis code, as long as the physician used a code from the right “family” (a “family of codes” is the same as the ICD-10 3 character category).  However, such claims will be denied by CMS if they do not contain ICD-10 codes or if they contain both ICD-9 and ICD-10 codes.  Further, it is possible that a claim containing ICD-10 codes could be chosen for review for reasons other than the lack of specificity of an ICD-10 code.  If a Medicare claim is rejected, it will be made clear whether it was rejected because it included an invalid code or for some other reason.


The 12 month “grace period” initiated by CMS does not apply to private providers.  Accordingly, HIPAA-covered entities should contact payers and inquire whether they are offering a similar “grace period,” whether they expect full compliance with ICD-10, or whether they are dealing with the transition in some different matter.  Further, contract provisions may be included to protect the provider from claims processing issues.


For all quality reporting completed for program year 2015, Medicare clinical quality data review contractors will not subject physicians to the Physician Quality Reporting System, Value Based Modifier or Meaningful Use penalties during primary source verification or auditing related to the additional specificity of the ICD-10 diagnosis code, as long as the physician used a code from the right “family.”


The audit and quality program flexibilities only pertain to post payment reviews.  ICD-10 codes with the correct level of specificity will be required for prepayment reviews and prior authorization requests.  The audit and quality program flexibilities also do not apply to claims submitted for beneficiaries with Medicaid coverage, either primary or secondary.


Over time, it is believed that the conversion to ICD-10 will improve coordination of a patient’s care across providers, advance public health research and emergency response through detection of disease and adverse drug events, support innovative payment models that drive quality of care, and enhance fraud detection efforts.

If you have any questions regarding compliance with the conversion to ICD-10, please contact our firm – we would be happy to help.

Sources: July 7, 2015 Letter from Andrew M. Slavitt, Acting Administrator of the Centers for Medicare & Medicaid Services; Clarifying Questions and Answers Related to the July 6, 2015 CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities, Centers for Medicare & Medicaid Services (July 27, 2015); CMS and AMA Announce Efforts to Help Providers Get Ready For ICD-10 – Frequently Asked Questions, Centers for Medicare & Medicaid Services; Brown, Bob.  ICD-10-CM: What Is It, and Why Are We Switching? 13 No. 3 J. Health Care Compliance 51, (May-June 2011). Rinkle, Valerie A. ICD-10 Implications for Pre-Service – Referrals, Registration, and Authorizations, 16 No. 3 J. Health Care Compliance 59 (May-June 2014).

          Author:   W. Scott Keaty and  Joshua G. McDiarmid
          Practice Area:   Health Care Law
          Date:   September 1, 2015

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