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ICD-10’s Evolution, Implementation and the Importance of CDI in Hospitals Today – Part I

To understand the reason for the change to ICD-10-CM/PCS and understand the benefits, one must first look at why coding is important.  A health record contains a substantial amount of documentation, which is unstructured data.  A code set is used to provide structure to many variables associated with clinical data so it can be indexed or classified.  Initially, the purpose of disease classification was morbidity and mortality, which is how it’s used worldwide.  However, in 1983 the prospective payment system was created as a payment methodology for Medicare beneficiaries based on ICD-9-CM codes.  The “CM” stands for “clinically modified” because the version used in the United States is different than the international version.  The “9” represents the ninth version.  Members of the World Health Organization (WHO) have been using the 10th version since the early 1990’s and there are plans for the 11th version to be released in 2017.  The U.S. has been trying to transition to ICD-10-CM/PCS since October 1, 2013.

ICD-10 Positives

ICD-9-CM consists of codes comprised of a maximum of five digits.  In contrast, ICD-10-CM consists of codes that are comprised of a maximum of seven digits.  The additional characters in an ICD-10-CM code allows for more precision within the code, which can better reflect the clinical scenario.  An important advantage of ICD-10-CM is the ability to establish anatomical location, including laterality.  ICD-9-CM codes didn’t include laterality and only reflected the general anatomical location.  In other words, ICD-9-CM couldn’t accurately capture a fracture of the greater trochanter (compared to the lesser trochanter) of the left femur  This may not seem like a very big deal, but since the primary purpose of indexing healthcare data is health statistics, laterality and anatomical location are  important variables.  Additionally, because a diagnosis code can only be reported once on a claim, the absence of laterality in ICD-9-CM limited the ability to report when both the left and right femur are affected i.e., bilateral femur fractures, when applicable.

Although providers don’t typically communicate with each other by codes, they are used to communicating the complexity of the patient’s condition to the healthcare payer.  Both federal and commercial payers require proof of the medical necessity to support a claim and a more precise code often equates to a more complicated condition.  In fact, many healthcare providers are concerned that they will not be paid if they report the unspecified version of a code in ICD-10-CM.  However, code assignment must be guided by the provider’s documentation so they will need to include more precise and detailed documentation, which could translate into better communication among providers and improved patient outcomes.

ICD-10-CM also has a lot more combination codes than were available in ICD-9-CM, which best describes a situation when one code is used to capture two conditions.  The new codes are to show the progression of a disease process by describing both the causative condition and its associated manifestation.

Implementation Challenges

The big unknown is procedure coding under ICD-10-PCS.  While the mechanics of coding diagnoses codes is the same in both versions, the way inpatient procedure codes are assigned is vastly different.  Assigning an inpatient procedure code in ICD-10-PCS requires more coding time and more provider documentation than was previously required.  Additional, surgical MS-DRGs, those associated with a surgical procedure, are paid at a higher rate so organizations will need to be able to accurately report procedure codes in order to maintain their current Case Mix Index (CMI).

Unfortunately, there has been a lack of industry guidance.  For example, ICD-10-PCS includes the possibility of over 70,000 procedure codes (based on only 15 pages of Official Guidelines for Coding and Reporting) that explain how to accurately assign these codes.    As a supplement to the guidelines, coders rely on Coding Clinic, a publication by the American Hospital Association (AHA), who is a cooperating party for modifying and maintaining the code set, to set industry standards.  The guidance from ICD-9-CM does not transfer to ICD-10-CM/PCS so many unanswered questions remain regarding how to accurately report many of the new ICD-10-CM/PCS codes as well as how to interpret some of the new guidelines.  The ambiguity may lead to an increased volume of denials until organizations are able to effectively appeal.

CDI – the secret sauce

Many organizations are finding that a Clinical Documentation Improvement (CDI) department is the secret recipe for success.  An effective CDI department is able to bridge many of the gaps within an organization when they focus on the overall impact of coded data i.e., financial as well as quality of care metrics.  The CDI with a clinical background is uniquely able to move between evolving healthcare processes and an antiquated coding system.

Although CDI services are not required by CMS Conditions of Participation (COPs) like quality, utilization review and discharge planning, effectively staffing a CDI department can support the efforts of both required functions as well as business functions including coding and billing.  Initially, organizations wanted CDI efforts to demonstrate a Return On Investment (ROI) as measured by incremental revenue, but the impact of CDI extends beyond direct revenue.  Increasingly organizations are relying on CDI efforts to address a multitude of clinical documentation issues that affect an organization’s profiling, reputation and market share in addition to revenue enhancement.  However, it is often difficult to balance all of these competing objectives.

For example, if a patient is admitted with both acute respiratory failure and CHF, traditionally, coders would assign CHF as the principal diagnosis and acute respiratory failure as a secondary diagnosis that adds a major complication condition (MCC) to the claim to maximize reimbursement. They support this approach by citing the coding guideline addressing two or more diagnoses that equally meet the definition for principal diagnosis.  However, is that an accurate interpretation of the clinical scenario?  Historically, claims where CHF is the principal diagnosis are vulnerable to denial for medical necessity of setting when billed under Medicare Part A prior to implementation of the two-midnight rule because most Medicare beneficiaries with heart failure can receive treatment in the outpatient setting.  Based on this information, is it really correct to assume both CHF and acute respiratory failure can be the reason for the admission?  Acute respiratory failure is the culmination of the progression of the symptoms associated with heart failure resulting in a life threatening emergency that can only be treated in the inpatient setting.   Additionally, heart failure is a primary target for CMS quality initiatives because it has traditionally be the number one reason for admission among the Medicare population.  As such, CMS is concerned regarding the quality of care provided to heart failure patients so there are several quality measures associated with heart failure (i.e., 30 day mortality and 30 day readmissions) that can impact reimbursement if the organizational performance triggers a penalty.  So assigning heart failure as the principal diagnosis may increase the billed CMI, but it may not be reflected in the adjusted CMI if a denial occurs.  In other words, it is not in the organization’s best interest to sequence the heart failure as the principal diagnoses even though it is associated with a higher paying MS-DRG because CMS guidance has overwhelming indicated that heart failure is a condition best treated in the outpatient setting.

Another reason CDI efforts often include addressing quality of care issues is because the focus on quality really resonates with providers.  Often the medical staff doesn’t understand how documentation is translated into coded data and how it affects organizational reimbursement.  CDI efforts ensure the voice of the provider is reflected in coded data, especially when the CDI has a clinical background because they often understand the provider’s intention as well as being able to identify what is missing from the documentation.  As healthcare grows in complexity so does the associated documentation and nuances within the health record, so leveraging CDI staff with a clinical background complements coding efforts to avoid delays within the revenue cycle.

Basically, many organizations are finding that the value of CDI efforts extends beyond what can be reflected by the CMI or CC/MCC capture rate.  When a CDI department is appropriately staffed and has resources such as integrated software to allow collaboration with coding and quality, they are able to be more efficient and provide better coverage.  Organizations often invest in cutting-edge technology for their coding department i.e., Computer-assisted Coding (CAC), but the same considerations are rarely extended to CDI.

ezDI Inc.

ezDI Inc.

"The only​ born-in-the-cloud​,​ AI​-based​, Fully Integrated,
​Speech to Text, CDI, CAC, ​Encoder, ​Auditing and Analytics
platform on the planet".

Headquarter in Louisville, KY, ezDI is a provider of AI-based mid-revenue cycle management solutions to Hospitals and Health Systems.

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