Many health insurers (public and private) reimburse doctors based on the patient’s diagnosis. If you treat a patient for a more severe illness during a inpatient stay, Medicare pays you more money. Physicians use procedures to bill insurers for the care they provided.
How do insurers know the patient’s diagnosis and the procedures providers perform? The answer is the International Classification of Disease (ICD) taxonomy. Currently, this system is in its ninth iteration, but it will soon be replaced by ICD-10 (the tenth revision) codes. By January 1, 2012, CMS will mandate that all electronic health record transaction use the ICD-10 system and by October 1, 2013 providers will all have to use the ICD-10 diagnosis and procedure codes for their claim submissions.
What’s new about the ICD-10 compared to the ICD-9? Read more below to find out.
Diagnosis Codes
For example, if a patient is seen for treatment of a burn on the right arm, the ICD-9 diagnosis code does not distinguish that the burn is on the right arm. If the patient is seen a few weeks later for another burn on the left arm, the same ICD-9 diagnosis code would be reported. Additional documentation would likely be required for a claim for the treatment to explain that the burn treated at this time is a different burn from the one that was treated previously. In the ICD-10 diagnosis code set, characters in the code identify right versus left, initial encounter versus subsequent encounter, and other clinical information.
| ICD-9 | ICD-10 |
| 3-5 characters | 3-7 characters |
| 13,000 codes | 68,000 available codes |
| First digit may be alpha (E or V) or numeric; digits 2-5 are numeric | Digit 1 is alpha; digits 2 and 3 are numeric; digits 4-7 are alpha or numeric |
| Lacks detail | very specific |
| Lack laterality (left vs. right) | Has laterality |
The ICD-10 code structure can be characterized as follows:
- Characters 1-3 – Category
- Characters 4-6 – Etiology, anatomic site, severity, or other clinical detail
- Characters 7 – Extension
For instance:
S52 Fracture of forearm
S52.5 Fracture of lower end of radius
S52.52 Torus fracture of lower end of radius
S52.521 Torus fracture of lower end of right radius
S52.521A Torus fracture of lower end of right radius, initial encounter for closed fracture
In this example, S52 is the category, the sixth category indicates laterality (i.e., 1=right), and the seventh character that this is the initial encounter.
Procedure Codes
Whereas the diagnosis codes describe the patient’s conditions, procedure codes describe the services the physiican provides. In the new ICD-10 procedure coding system, each digit of the procedure code tells you a different piece of information. Specifically,
- 1st digit: Name of Section
- 2nd digit: Body System
- 3rd digit: Root Operation
- 4th digit: Body Part
- 5th digit: Approach
- 6th Digit: Device
- 7th Digit: Qualifier
For example, the code for right knee joint replacement is 0SRC0JZ which means the following:
- 0 = Medical and Surgical Section
- S = Lower Joints
- R = Replacement
- D = Knee Joint, Right
- 0 = Open
- J = Synthetic Substitute
- Z = No Qualifier
Below is a chart comaring the ICD-9 and ICD-10 procedure codes.
| ICD-9 | ICD-10 |
| 3-4 numbers in length | 7 alpha-numeric characters in length |
| ~3,000 cods | Approximately 87,000 codes available |
| Lacks laterality | Has laterality |
| Lacks descriptions of methodology and approach for procedures | Contains descriptions of methodology and approach for procedures |
Source: American Medical Association (AMA) Fact Sheet, “The Differences between ICD-9 and ICD-10,” June 2, 2010.
My understanding of the new regulations are that Jan 1, 2012 is when CMS begins accepting HIPAA 5010 transactions, but providers can still report ICD-9 diagnoses in the appropriate fields. The actual enforcement of exclusively 5010 transactions doesn’t begin until the end of March, because almost all states and even CMS have been experiencing very low testing rates among providers and clearing houses.
In terms of Medicaid for 5010, it depends state-to-state. Some are allowing dual transactions in both 4010 and 5010 through March 30, 2012, while others are not so lenient and will use 5010 exclusively beginning Jan 1, 2012.
The full ICD-10 goes into effect in Oct 1, 2013, but the Procedures (PCS) are only applicable for inpatient institutional surgery claims. Outpatient claims – both facility and non-facility – will still use HCPCS and CPTs to report procedures, but use ICD-10 for diagnoses. At least, that’s to the best of my knowledge.