Testimony to the National Committee on Vital and Health Statistics on ICD-10-PCS

April 9, 2002

Opening Comments

Chairman Cohen, members of the National Committee on Vital and Health Statistics (NCVHS) Standards and Security Subcommittee, ladies and gentlemen, good afternoon. I am Sue Prophet, director of coding policy and compliance of the American Health Information Management Association (AHIMA). On behalf of the Association, thank you for allowing us this opportunity to provide input on replacing the ICD-9-CM procedural coding system with ICD-10-PCS.

As you know from our previous testimonies, AHIMA is a professional association representing more than 41,000 members who manage patient information in the form of health records and databases in provider, health plan, government, and private organizations.

Relevant to our comments today, AHIMA member responsibilities include a variety of medical coding functions. A survey of our active membership shows that nearly 50 percent cite coding as one of their primary job functions, whether they manage coding functions, or are a coding professional or a consultant. The responsibility of health information management (HIM) professionals for coding dates back to the 1930s when the use of the new Standardized Nomenclature of Disease was being promulgated and Dr. H. B. Logie, executive secretary of the National Conference on Nomenclature of Disease asked our members to take on this role.

The educational curricula for HIM professionals at the baccalaureate and master's level include nomenclature and classification systems, management of healthcare coding, and derivative systems. Health information technicians with an associate's degree learn to code with ICD, CPT, and specialty code sets. Thus, the registered health information administrator (RHIA) and the registered health information technician (RHIT) denote significant academic preparation in coding and classification systems. The Clinical Coding Specialist credentials offered by AHIMA-the CCS and CCS-P-are the marks of highest clinical coding mastery in the industry.
AHIMA is proud to serve as one of the Cooperating Parties, along with the Centers for Medicare and Medicaid Services (CMS), the American Hospital Association (AHA), and the National Center for Health Statistics (NCHS), who are responsible for developing guidelines and direction for the proper application of ICD-9-CM. This relationship, begun in the 1960s, has always been dedicated to enhancing data integrity, and I know the dedication of each organization's representatives, current and former. This is a very challenging job, and one that has become immeasurably more difficult in recent years.
Today's Testimony

Today our testimony is directed at the limited questions concerning the use of CMS's ICD-10- PCS in place of the procedural coding system currently a part of the ICD-9-CM coding used in the United States. The ICD-9-CM procedural coding system is often referred to as "Volume III." Today as we discuss this coding system and an option for possible replacement, we must keep in mind not only the current uses of this system, but also the mandated uses under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

In our testimony today, I'll cover AHIMA's perspective on:

• The status of ICD-9-CM procedure codes and whether they should be replaced,
  
• The proposed ICD-10-PCS (procedure coding system),
  
• Implementation issues that will arise if ICD-10-PCS is selected and specifically on training of healthcare professionals in this coding system, whether they are professional coders or others whose tasks include using this system, and
  
• Why the Secretary's decision concerning ICD-10-PCS should not be made in a void and why he should also move quickly to consider the aspect of using a single procedural coding system for US healthcare instead of multiple coding systems.

The ICD-9-CM Procedure Coding System Must Be Replaced Quickly

Current Situation

The ICD-9-CM procedural coding system is obsolete and must be replaced. This coding system was designed and implemented over 20 years ago, and since that time dramatic advances in medicine and medical technology have occurred that were not anticipated and have not been adequately accommodated. For example, laser and laparoscopic surgery were not performed at that time, but are now utilized for many types of procedures.

At the time the ICD-9-CM procedural coding system was developed, only one surgical approach, "open," was used for many procedures that can now be performed using a variety of approaches. Today, we are using a procedure coding system on the brink of collapse and unless this situation is addressed quickly and in concert with other coding system decisions that must be made, there will be serious consequences to the industry.

Attachment One provides a brief description of some of the mechanical problems that face the industry, CMS, and the Coordination and Maintenance Committee in keeping the ICD-9-CM procedure coding system going. Rather than go into that nitty-gritty detail right now, AHIMA would like to address the impact of this obsolete coding system.

The ICD-9-CM procedure coding system can no longer meet the needs of today's healthcare industry. The coding system cannot meet the granularity necessary to support today's reimbursement systems and is running out of codes needed for appropriate payment for procedures rendered. These failures mean that our industry and our government do not have the data and the knowledge to facilitate reasonable payment mechanisms and amounts, and key data to monitor, understand, and reduce medical error and improve the quality of medical services. This deficiency of accurate data has a cost that our individual entities and our industry can no longer afford at a time when the costs of healthcare are becoming difficult to bear.

Finally, I must note that, from a professional coding perspective, this lack of granularity causes a mingling of procedures that violates all normal coding system requirements. We have run out of codes, and we are faced with choices such as replacement or a gerrymandering of coding rules and concepts just to keep the system going. Such choices and delays in considering the obvious are decisions that only lead to more errors and more cost.

The ICD-9-CM procedure coding system's vagueness leads to inadequate specificity. For example:

• A variety of different knee surgeries, including both open and arthroscopic repairs, are classified to code 81.47, "Other repair of the knee."
• Numerous types of aneurysm repairs are classified to code 39.52, "Other repair of aneurysm."
• Excision of skin lesions and all types of destruction of skin lesions (including that by laser, cryosurgery, cauterization, and fulguration) are classified to code 86.3, "Other local excision or destruction of lesion or tissue of skin and subcutaneous tissue."

Data Needs and Procedure Coding System Requirements Have Changed

Patently, the uses of coded data today go well beyond the purposes for which the system was designed or even contemplated in the 1970s. At that time coded data were primarily used for statistical analyses (mortality and morbidity) and indexing and retrieval of medical and epidemiological research, education, and medical audits.

Today, coded data are used for:

• Payment system design and processing claims for reimbursement,
• Measuring the quality, safety, and efficacy of care,
• Managing care and disease processes,
• Research, epidemiological studies, and clinical trials,
• Setting health policy,
• Operational and strategic planning and the designing of healthcare delivery systems,
• Monitoring resource utilization,
• Identifying fraudulent practices,
• Tracking public health and risks, and
• Providing data to consumers regarding costs and outcomes of treatment options

The problems with the ICD-9-CM procedure coding system are not new. In 1993 (nine years ago) this committee (NCVHS) reported to the Department of Health and Human Services (HHS) that ICD-9-CM was running out of available code numbers and pointed out that the ICD-9-CM procedural coding system (1):

• Contains overlapping and duplicative codes,
• Includes inconsistent and outdated terminology,
  
• Lacks codes for certain types of services,
  
• Lacks sufficient specificity and detail (such as laterality or surgical approach), and
  
• Has insufficient structure to capture new technology.

As I have noted, nothing has changed to negate the problems cited in this report, with the exception, that now the problems have grown worse, such as the fact that we are running out of codes and these problems are impacting the healthcare industry at an even higher level.

Day-to-Day Problems

I have mentioned how we generally use procedure coding today, some of the vagueness the current system contains, and what we should be using such coding for tomorrow. There are also some day-to-day problems healthcare entities are facing due to this obsolete system:

• There are increasing requirements for submission of documentation to support claims.
  
• Accurate data on new medical advances cannot be collected.
  
• Requirements of the 2000 Benefits Improvement and Protection Act (BIPA) cannot be implemented, therefore new services and technology cannot be accurately accommodated (see Attachment One).
  
• There is a lack of data to support performance measurement, outcomes analyses, and cost analyses.
  
• There is an increasing need for manual review of medical records for research and "data mining" purposes.
  
• The opportunity for fraud/abuse (due to the number of different procedures categorized to the same code, such as covered and noncovered procedures) keeps increasing.
  
• The ability to effectively monitor service and resource utilization, analyze healthcare costs, monitor outcomes, and detect fraud and abuse is decreased.

Clearly, the US healthcare industry cannot continue to function using the ICD-9-CM procedure coding system. This isn't just a statement, it is a fact and it highlights a need that must be quickly addressed by the industry and, under HIPAA, by the HHS Secretary.

This leads us to the next question of the day:

Should ICD-10-PCS be Adopted as a Replacement for ICD-9-CM Procedure Codes?

AHIMA's Involvement

As representatives of CMS and the Coordination and Maintenance Committee have explained today, ICD-10-PCS was developed as a replacement for ICD-9-CM procedure codes for reporting hospital inpatient procedures. The design objectives were to improve coding accuracy and precision, reduce training efforts, and improve communication with clinicians (Averill, Richard F., et al. "Development of the ICD-10 Procedure Coding System (ICD-10-PCS)." Journal of AHIMA 69, no.5 (1998): 65-72). I must note that AHIMA served on a technical advisory panel throughout system development. The system was formally tested by AHIMA-credentialed HIM professionals employed by the two Clinical Data Abstraction Centers (CDACs). In 1996, AHIMA hosted a session at its national convention to train 70 volunteer credentialed HIM professionals to informally participate in system testing.

Results of HIM Testing ICD-10-PCS

The results of the ICD-10-PCS testing by AHIMA were generally positive. Individuals involved in the testing indicated that it is a clinically elegant and logical system, and that the system can be understood relatively quickly, resulting in reduced training time. The assignment of codes to particularly challenging cases from the Editorial Advisory Board of Coding Clinic was accomplished more expeditiously in ICD-10-PCS. A few omissions were identified during the testing process, but they were easily rectified, demonstrating the flexibility of the system.

Some difficulties were encountered, particularly with definitions of terms, when assigning codes from sections beyond the Medical/Surgical section, such as Imaging, Nuclear Medicine, and Radiation Oncology, due to the complexity of the terminology used in these areas and the fact that these procedures are more likely to be hard-coded on the facility's chargemaster rather than manually coded. If procedures currently not reported with ICD-9-CM procedure codes become required for reporting with ICD-10-PCS codes, then additional testing will need to be performed on these sections of codes by experts in the applicable areas of medical practice.

Based on feedback from those involved in the ICD-10-PCS testing, comprehensive retraining of coding personnel will be required since this coding system is substantively different from other classification systems in use today. After an initial learning period to familiarize themselves with the new system, AHIMA-credentialed coding professionals understood and applied the system with relative ease. The degree of specificity in ICD-10-PCS facilitates identification of the correct code. However, because ICD-10-PCS requires a more extensive knowledge of anatomy and physiology than the ICD-9-CM procedural coding system, some coders may need additional training in this area.

While HIM professionals have tested ICD-10-PCS, to our knowledge, it has not been tested in the same way by users such as information systems personnel, software vendors (many of whom have placed ICD-10-PCS within their software), or payers. Due to the types of medical records available to the CDACs, the testing was primarily focused on Medicare hospital inpatient records and in the Medical/Surgical section of ICD-10-PCS. More limited testing was conducted on non-Medicare and outpatient records.

AHIMA commends the extensive work that went into the development of the ICD-10-PCS, and is prepared to support its implementation subject to the cautions and recommendations regarding implementation and maintenance I will address in a few moments.

ICD-10-PCS Is an Improvement - Meeting Needs Cited by NCVHS and HIPAA

Based on our involvement and testing with ICD-10-PCS to date, AHIMA believes that ICD-10-PCS represents a significant improvement over the ICD-9-CM procedural coding system and substantially meets the characteristics of a procedural coding system outlined by the NCVHS. Characteristics include:

• A hierarchical structure
• Expandability
• Comprehensiveness
• Non-overlapping
• Ease of use
• Setting and provider neutrality
• Multi-axial
• Limited to classification of procedures

(A full description of these characteristics is included in Attachment Two.)

ICD-10-PCS also meets all of the HIPAA requirements for a standard code set. It is flexible, precise, and unambiguous.

ICD-10-PCS Is More Specific and Can Improve Reimbursement, Management and Retrieval Systems.

ICD-10-PCS provides more complete and accurate descriptions of the procedures performed than the ICD-9-CM procedural coding system. Specificity not only affects reimbursement, but also is integral to internal management systems, external performance comparisons, assessment of quality of care, and many of the uses of coded data mentioned earlier. The detail and completeness of ICD-10-PCS are essential in today's healthcare environment.

AHIMA does not believe that reimbursement considerations should drive code set revisions. However, good specific coded data should be used and can determine and support appropriate reimbursement. The payment computation system, and not the coding system, should define the payment. The level of specificity in ICD-10-PCS will provide payers, policy makers, and providers with more detailed information for establishing appropriate reimbursement rates evaluating and improving the quality of patient care, improving efficiencies in healthcare delivery, reducing healthcare costs, and effectively monitoring resource and service utilization. For example, reduced healthcare costs will result if a more specific coding system is employed, facilitating the prevention and identification of fraud and abuse or the specificity needed to conduct good quality improvement and error reduction programs. The exchange of additional data beyond the basic claim, and the time it takes to gather and process such detail, will significantly be reduced due to the more specific detail contained in the ICD-10-PCS code.
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With ICD-10-PCS, aggregate information retrieval can be performed easily, based on an individual character or by ranges of codes. Thus, all procedures on a particular body part, by a specific approach, or by another characteristic, can be readily retrieved. However, because of its precision, ICD-10-PCS requires more complete and accurate medical record documentation. While this could be challenging for some organizations, it will ultimately result in improved patient care and safety, reduction in medical errors, better data, and greater compliance.

ICD-10-PCS Is an Acceptable Replacement for the Current ICD-9-CM Procedure Coding System.

Based on our involvement with the existing ICD-9-CM procedure coding system, the Coordination and Maintenance Committee and its struggles to maintain the existing system, and our testing of ICD-10-PCS, AHIMA believes that ICD-10-PCS is an acceptable replacement for the current procedure coding system within current use currently designated under HIPAA. Such a decision, however, cannot be made in a void, and I will now address some other considerations that the NCVHS, the industry and the Secretary must consider.

Implementation Considerations

Training the Industry for ICD-10-PCS

Much has changed since the implementation of ICD-9-CM in regards to training, which makes training accessible and affordable. It would be unwise to neglect the magnitude of this issue.

Implementation of any new coding system would require new training for coders, clinicians responsible for documentation, and a growing number of data users throughout the healthcare industry. Training must address a change in the material used for initial preparation and those transitioning skills from ICD-9-CM volume 3 to ICD-10-PCS. Because PCS allows greater specificity, clinicians must change behaviors in documentation so the appropriate code can be selected. Not only will the codes change for data analysis, a new level of specificity will be available that should also change the level of analysis that can be performed. Both information systems staff and analysts will need to understand the data comparability issues as data between the two systems is compared over time.

Retraining the Coding Professional

The formal testing process did not include a formal comparison of the training time between the ICD-9-CM procedural coding system and ICD-10-PCS. However, the HIM professionals involved in ICD-10-PCS testing did not find the system particularly difficult to learn, and they were faced with learning to properly use the system without the benefit of rules and guidelines, since these have not been developed yet.

Because of the additional specificity of ICD-10-PCS, it is likely that the training time needed to achieve a minimum level of coding proficiency could be greater than for the ICD-9-CM procedural coding system. However, since ICD-10-PCS is currently relegated to only acute care, inpatient hospitals, initial training for coding professionals will be directed toward individuals that generally have significant coding experience and certification.

It must also be noted that the definitions used in ICD-10-PCS are sometimes new definitions for old terms, resulting in difficulty in becoming accustomed to the definitions used in ICD-10-PCS. Once learned, it should take less time than it does with ICD-9-CM to achieve a high level of coding proficiency. Since the definitions are standardized within ICD-10-PCS, they are not forgotten and are easy to apply and reference. ICD-10-PCS' requirement for a greater understanding (and therefore training) of anatomy and physiology than the ICD-9-CM procedural coding system will be seen by some as a barrier to implementation. For a certified coding professional, this training is easily achieved and will enhance the coding professional's knowledge, thereby improving coding accuracy and efficiency.

In contrast, the process of becoming highly proficient using the current ICD-9-CM procedure coding system can require a long learning curve, because complete familiarity with all of its conventions requires extensive effort. Since the ICD-9-CM procedural coding system lacks clear definitions and many substantially different procedures are classified to the same code, the identification of the correct code requires extensive knowledge of the official supplementary coding guidelines and advice.

Retraining Other Healthcare Professionals and Users

Given the many uses of coded data outlined earlier, multiple categories of users of coded data will require varying levels of training on any new coding system. These categories of users include:

• Clinicians
  
• Quality management personnel
  
• Utilization management personnel
  
• Ancillary department personnel
  
• Data quality management personnel
  
• Data analysts
  
• Researchers
  
• Software vendors (many already familiar with ICD-10-PCS)
  
• Information systems personnel
  
• Patient accounting and accounting personnel
  
• Claims adjudicators and reviewers
  
• Compliance staff
  
• Auditors
  
• Epidemiologists
  
• Fraud investigators

Physicians and clinicians will need to be actively involved in the training process. This will allow them to understand the importance of complete and accurate documentation to support the level of specificity in ICD-10-PCS. It will also allow them to understand the variations between the terminology they may use in their documentation and the standardized terminology used in ICD-10-PCS.

It has been over 20 years since the US converted to a new procedural classification system. Because today's payment systems are based on coded data, there are many more stakeholders. The size of the workforce directly engaged in coding has grown, as has the range of coding skill. Today, there are thousands of mastery level coders, signified by the CCS and CCS-P credentials. But workforce shortages also mean there are many on-the-job trained coders for whom retraining will be more demanding, and coding professionals must understand how to properly use and interpret data derived from both ICD-9-CM and ICD-10-PCS procedure codes.

Tools for Retraining

While the transition poses significant challenges, there are, fortunately, many training vehicles available and appropriate for this effort. First, the number of publications dedicated to coding training has grown significantly over the past 20 years. These include both books and periodicals. Face-to-face seminars that were widely used to train for ICD-9-CM, remain an effective training vehicle, but new technologies offer alternatives possibly superior to traditional face-to-face training. For example, audio seminars can be delivered at low cost to a large audience using the phone, the Internet, or audiotapes and CDs.

Web-based training offers new accessible and flexible training opportunities. Web-based training is an exciting methodology for training masses of people, and can be highly effective in terms of the quality of the education results (for instance, how well participants learn to use the system and apply it in their workplace) and costs. From our experience with training individuals on ICD-10-PCS and serving as an educator, AHIMA anticipates that experienced coding professionals will need approximately 16 contact hours of instruction in ICD-10-PCS, assuming that this system will only be used in those settings and for those services that ICD-9-CM procedure codes are currently used. In the hospital inpatient setting, the Medical/Surgical section is the portion of ICD-10-PCS that would primarily be used with limited use of a few of the other sections. Such instruction would include both education on the structure, principles, rules, and guidelines of ICD-10-PCS and "hands-on" practical application using clinical data.

Again, given the many uses of coded data outlined earlier, multiple categories of users of coded data will require varying levels of training on any new coding system. We believe that four to eight contact hours of training would be needed for these "other" categories of users who do not need "hands-on" coding skills, depending on the level of knowledge required.

A number of for-profit and not-for-profit organizations are ready to meet the training demand of an ICD-10-PCS conversion. Given the variety of educational media available and the number of vendors that already provide coding products and services, we anticipate numerous vendors will offer a variety of competitively priced education programs for ICD-10-PCS in formats to suit everyone's needs and preferred learning style.

Although it would be technically possible for coding professionals to use a paper-based version of ICD-10-PCS, given the size and structure of this system, most coding professionals and healthcare organizations will find that this system is easiest to use in electronic format. We anticipate that the major encoding software vendors will have ICD-10-PCS products available well in advance of system implementation, since ICD-10-PCS is already publicly available on the Internet and we are told anecdotally that some vendors have already begun to develop ICD-10-PCS products.

AHIMA remains committed to continuing our history of training the industry in HIM. We can reach out to make education accessible, as we did for ICD-9-CM, not only through the Internet but also through our network of 52 component state associations and our network of coding professionals, which has significantly expanded since the implementation of ICD-9-CM. We have built a strong network of coding experts and have expanded our scope and reach through dynamic Internet-based Communities of Practice.

Because the scope of HIM includes coding, we are prepared to address appropriate coding documentation, management, and data analysis issues related to this change. Coding leadership, professional development, and coding consistency are central strategic and mission issues for AHIMA, so you can count on our support.

For entry-level coding programs and for the coding component of HIM academic programs, we anticipate that ICD-10-PCS training would be incorporated into the existing ICD coding curriculum. We also expect a period of time when students enrolled in entry-level coding programs must learn to use both ICD-9-CM procedure codes and ICD-10-PCS. Eventually, comprehensive education on ICD-9-CM procedure coding would be phased out entirely.

Other Implementation Considerations, Requirements, and Recommendations

Definition of Code Set Standards

In our February 2002 testimony, regarding medical code set standards and HIPAA, AHIMA indicated the need for such code set standards to include the rules and guidelines for proper use to ensure consistent application and reliable data. At present, ICD-10-PCS includes no rules and guidelines for proper application of the system. Rules and guidelines must be developed well in advance of system implementation. For example, issues encountered by testing individuals that can be addressed in rules or guidelines would include the components of a procedure that may or may not require separate codes and which code is the "default" code if the medical record documentation lacks the necessary specificity to assign a specific code.

It will be important to specifically determine, at the time ICD-10-PCS is named as a standard code set, the sections of ICD-10-PCS that are part of the standard code set for reporting purposes. There are many procedures included in ICD-10-PCS for which ICD-9-CM procedure codes are not typically reported (such as laboratory and mental health procedures). Unless it is clear which sections must be used, it will be difficult to develop appropriate educational programs and coding practice consistency will be impacted. Also, if all sections within ICD-10-PCS must be reported because the procedure was performed in a hospital inpatient setting, then our estimates of training time may need to be expanded.

Code Set Maintenance

In February, we indicated that maintenance is also a key issue for any complete and flexible medical coding system. AHIMA has espoused for medical code set maintenance processes, which are :

• A committee that includes representation of all stakeholders;
  
• Open, public meetings;
  
• Streamlined procedures;
  
• Minimum lag times for process;
  
• Established process for developing system rules and guidelines; and
  
• Publicly available documentation.

See Attachment Three for an expanded description of these principles.

These six principles indicate that sound maintenance processes are as important as sound system design, and ICD-10-PCS already meets this latter requirement. There should be a unified and logical process encompassing ICD-10-PCS and ICD-10-CM if and when these systems are implemented and any additional medical code set standards should they be required. Responsibility for maintenance of these coding systems and development of the associated rules and guidelines should be the domain of a single agency, so decisions balance the needs of users, payers, and providers, to ensure that data integrity is not compromised.

As we recommended in February, AHIMA continues to believe that the logical choice for this authority should be the NCHS. An advisory group comprised of representatives of stakeholders should be established to provide input into the maintenance and guideline development processes. We also recommend that the current Cooperating Party structure be continued, as it has served as a successful process for the development of guidelines that best meet the needs of the major constituent groups.

Crosswalk between Coding Systems

When we move to a new coding system, a crosswalk should be developed between the old and new systems. Currently, 3M has developed a map between ICD-10-PCS and ICD-9-CM procedure codes which is available on CD-ROM. Because of the high degree of specificity of ICD-10-PCS, many ICD-10-PCS codes have been mapped to the same ICD-9-CM procedure code.

Computer System Implications

We recognize that there are significant resource implications of implementing new coding systems. These include:

• Software changes for providers, payers, and data users (including field size expansion, change to alphanumeric composition, complete redefinition of code values and their interpretation, logic changes, modifications of table structures and expansion of flat files containing procedure codes, and interfaces between vendor software)
  
• Increases in system storage capacity in order to support both coding systems for a period of time
  
• Modification of report formats and layouts
  
• Re-design of paper forms
  
• Maintenance of crosswalks among coding systems for longitudinal data analysis
  
• Redevelopment of systems based on coded data, including groupers, payment policy, and performance measurement systems
  
• Impact of faulty decisions due to distorted, inaccurate, or misinterpreted data

Systems and applications requiring changes to accommodate ICD-10-PCS codes will also include decision support systems, billing systems, clinical systems, encoding software, medical record abstracting systems, aggregate data reporting, utilization management, groupers, and accounting systems.

Learning Curve

Obviously, it will take some time until the advantages of the improved data produced by ICD-10-PCS are realized. During the transition, the quality of data will undoubtedly suffer as implementation of any new coding system involves a learning curve. Data that are confusing and less reliable during this time will be a result. Caution should be used when conducting longitudinal data analysis since procedures are classified quite differently in the two systems and it may be easy to misinterpret data.

Other Considerations

Often AHIMA has noted that a decision related to ICD-10-PCS cannot be made in a void. While we believe the problems associated with the current ICD-9-CM procedure coding system warrant immediate attention and leadership, such decision-making must take into account the current and future healthcare environment in the US.

ICD-10-CM

As the subcommittee is well aware, there is also a similar issue to be addressed concerning the adoption, implementation, and use of ICD-10-CM to replace ICD-9-CM diagnosis codes. We will discuss that matter with the subcommittee at the May hearing.

If it is decided to implement ICD-10-PCS earlier than ICD-10-CM, it would allow for easier and quicker implementation and training than if institutions were to face conversion of both systems at the same time. However, this is a question that must be addressed in the context of the environments and in order that there are appropriate timetables and strategic planning developed to accommodate the needs of the industry and not just ICD-10-PCS.

Concern was raised about two separate implementations in the area of information systems (IS) and databases. AHIMA believes this question should be explored, and further suggests that perhaps there might be a way for IS professionals and vendors to make a one-time change to their information systems and databases, provided they were confident that conversion to ICD-10-CM was a certainty, had specific detail as to system and database needs forthcoming throughout the project, and had agreed it was more economical than two conversions. Such an approach would permit the flexibility as called for in HIPAA for the actual coding conversion and implementation.

Obviously, to answer these questions means addressing ICD-10-CM now and developing a timetable that permits the industry to make a reasonable conversion. HIPAA has taught us the advantage of government and industry consensus to facilitate such conversion. It should also be noted that such conversions, using a process involving government and industry consensus, have been made in other countries.

After looking at all these considerations, AHIMA believes that it would be possible to replace the ICD-9-CM procedure coding system before full implementation of ICD-10-CM, so long as this decision is made and planned with conversions of both systems in mind.

Single Procedure Coding System

AHIMA, along with the NCVHS has been calling for the adoption of a single procedure coding system to be used across all sites of service in the US. Our February testimony to this subcommittee, and to the Coordination and Maintenance Committee in May 2001, called for federal study of this proposal. AHIMA believes it is time for the US to have a means of collecting and analyzing procedure data across sites of service, and to acknowledge what we already know - that procedures are rendered in more than one site. I will not repeat our testimony since it was given to the subcommittee previously.

With regard to today's discussion, however, AHIMA does not believe that consideration for, or implementation of, ICD-10-PCS should be held up while waiting for the leadership and the funding of a study for a single procedure coding system. Clearly, the crisis surrounding the limitations of the current inpatient procedure coding system and its need for replacement and granularity cannot wait. AHIMA believes that implementation of ICD-10-PCS in the inpatient acute care setting would not only relieve the problems currently inherent in ICD-9-CM, but also provide better experience for such a study for a uniform procedure coding system.

AHIMA is aware that other procedure coding systems currently exist. However, we do not see any other procedure coding system capable of replacing the ICD-9-CM procedure coding system at the present time. This situation could change in the future, but the need is today. ICD-10-PCS was specifically designed to replace the ICD-9-CM procedure coding system and appears ready and able to do so. Therefore, as of today, and in light of all the other variables, we see ICD-10-PCS as the only viable option for meeting our critical need for a replacement system as soon as possible.

HIPAA

The current implementation process related to HIPAA is often raised as a reason for holding back on the decision to replace the ICD-9-CM procedure coding system. True, the transaction and code set implementation is a large undertaking, but we know its parameters and we have learned, perhaps, a better way of setting up a strategic approach to implementation. The current inpatient procedure coding system is in crisis. AHIMA does not believe that a decision can be delayed until the current HIPAA rules are fully implemented, nor do we believe the healthcare industry can afford to hold off the reimbursement and other considerations that are impacted with any procedural coding system delay.

Consequences of Maintaining the Status Quo

We realize there will be resistance to changing from the status quo, but it must be recognized that while there are costs in implementing a new coding system, there are also costs associated with maintaining the status quo.

We are paying a very high price for having delayed this long, and the cost increases. We are already at least a decade behind in implementing new ICD modifications, and like any system maintenance experience, catching up is more costly than staying current. Further delay will not reduce the direct costs. We cannot ignore the indirect costs any longer. It has been suggested that the ICD-9-CM procedural coding system could somehow be "fixed" rather than adopting an entirely new system. We believe that we have been attempting to "fix" the ICD-9-CM procedural coding system for several years and it has reached the point where no more "fixes" are possible without severely disrupting the system structure.

ICD-10-PCS has the capacity to grow as medical science grows, and it could serve our healthcare procedural data needs for many, many years to come. We believe that the benefits of the improved data resulting from ICD-10-PCS are well worth the costs and difficulty encountered during the transition period. We also believe that we are incurring significant costs by utilizing a hopelessly outdated and limited system and that, ultimately, reductions in costs will be realized as a result of the availability of better data. For example, greater specificity and clinical detail will help to reduce the number of cases where copies of medical records need to be submitted for clarification for claim adjudication. Also, better data will result in improved patient outcomes (due to a better understanding of the effectiveness of various treatment options) and reduced patient errors.

Conclusion

In summary, AHIMA's position regarding replacement of the ICD-9-CM procedural coding system with ICD-10-PCS is as follows:

• Replacement with a new procedural coding system for inpatient services is absolutely necessary, and ICD-10-PCS meets the criteria for such a replacement system.
  
• Rules and guidelines for the proper use of ICD-10-PCS should be developed.
  
• Interactive Internet-based training would be an excellent methodology for training both coding professionals and users of coded data on ICD-10-PCS relatively quickly and cheaply.
  
• The definition of the ICD-10-PCS standard should include system rules and guidelines.
  
• A modified maintenance process is needed to ensure representation of all stakeholders, a public process, and streamlined system revisions.
  
• The ICD-10-PCS standard must address the sections of ICD-10-PCS that need to be included as required data elements of electronic claims transactions. These must be clearly identified in order to prevent confusion and inconsistent coding and reporting practices (For example, must imaging, nuclear medicine, or laboratory tests performed in a hospital inpatient setting be reported using ICD-10-PCS codes?).
  
• A standard effective date for ICD-10-PCS implementation should be established by which all affected payers and providers would be required to abide.
  
• Ideally, while ICD-10-CM and ICD-10-PCS should be implemented at the same time (in order to limit the transition period when disruption of data quality, coding accuracy, coding productivity, and prompt reimbursement of claims will occur), we acknowledge that the systems are so distinctly different that it would be possible to implement them at separate times.
  
• While there are significant cost implications associated with adoption of ICD-10-PCS as a standard code set, there are also significant costs associated with maintaining the status quo.
  
• The issue of replacing ICD-9-CM procedure codes with ICD-10-PCS also cannot be entirely separated from the issue of adoption of a single procedural coding system. Thus, we continue to call for the evaluation of a single procedural coding system so an informed national decision can be made about the best long-term solution for all healthcare settings, services, and payers.

AHIMA and its national network of coding professionals is uniquely capable of assisting in the research on the right system, the best implementation strategy, and the design of a new maintenance model and process. AHIMA's coding professionals have the training and experience to quickly learn and utilize a new professional coding system and limit the learning curve. AHIMA is also uniquely capable of taking the lead in national workforce retraining and user education for new procedural and diagnosis coding systems.

Thank you for the opportunity to present our views regarding replacement of ICD-9-CM procedure codes with ICD-10-PCS, and the environment that must be considered in this decision. AHIMA is deeply committed to working with the Department of Health and Human Services, the NCHS, and other healthcare industry groups to advance coding practice and improve our nation's healthcare data through adoption of new code set standards. This morning I am accompanied by Dan Rode, AHIMA's vice president for policy and government relations and we are prepared to answer any questions or concerns the subcommittee might have at this moment.

Contacts:

Sue Prophet, RHIA, CCS
Director, Coding Policy and Compliance
AHIMA
233 North Michigan Avenue
21st Floor
Chicago, IL 60601
Telephone: (312) 233-1100 ext 1115
E-mail: sue.prophet@ahima.org

Dan Rode, MBA, FHFMA
Vice President, Policy and Government Relations
AHIMA
1730 M Street, NW
Suite 409
Washington, DC 20036
Telephone: (202) 659-9440
E-mail: dan.rode@ahima.org

ATTACHMENT ONE

Serious Limitations of the Existing ICD-9-CM Procedure Coding System

The limitation of ICD-9-CM's procedural coding system four-digit structure allows little room to make substantive changes. Once a category is full, types of similar procedures must either be combined under one code, or a place for a new code must be found in another section of the book. The latter approach compromises the ease with which aggregate data on related procedures can be collected.

Although the Coordination and Maintenance Committee has attempted to make coding modifications to capture new technology, it has sometimes been difficult to achieve a reasonable result. Making needed changes to the ICD-9-CM procedural coding system has become increasingly difficult each year and involves making compromises that affect the precision of the coding. In fact, implementation of some meritorious code proposals has not been approved due to insufficient space to create a new code. ICD-9-CM procedure codes often fail to distinguish between significantly different technologies. It is difficult to track data on new procedures when they are classified to general, non-specific codes. Many of the terms used in the ICD-9-CM procedural coding system can have a variety of meanings and interpretations, resulting in difficulty and inconsistency in determining the most appropriate code.

The Coordination and Maintenance Committee and CMS have also run into significant problems caused by the Benefits Improvement and Protection Act of 2000 (BIPA). BIPA requires that new services and technologies be incorporated into the hospital inpatient prospective payment system more expeditiously. Since the design of the prospective payment system is based on ICD-9-CM codes, this would require the establishment of new ICD-9-CM procedure codes to represent new services and technology. Since the ICD-9-CM procedural coding system has already proven to be inadequate in accommodating routine annual coding changes, it most certainly will not be able to accommodate the new codes needed to represent technological advances, as required under BIPA.

For example, we have already been forced to create codes for diverse procedures, affecting different body systems, in unused ICD-9-CM procedure code categories, because there is no room to expand the category where the procedure more appropriately belongs. This will impede our ability to accurately collect data on related procedures. Adding another digit to ICD-9-CM procedure codes would seriously disrupt the structure of the system and essentially create a "new" system that would not eliminate all of the costs of moving to an entirely system. Such a significant modification to a limited and dated system would only make the system worse. The time it would take to make this "modified" system work well could be longer than that required to build a new system, and the resources needed for system changes would be significant. So, we would essentially have many of the costs of adopting a new system without all of the benefits of the design of ICD-10-PCS.

ATTACHMENT TWO

NCVHS Characteristics of a Procedural Coding System

• Hierarchical structure: ICD-10-PCS has the ability to aggregate data across all essential components of a procedure and all codes have a unique definition
  
• Expandability: ICD-10-PCS has extensive flexibility to add new procedures and technologies, and code expansions do not disrupt the systematic structure
  
• Comprehensive: All types of procedures are included in ICD-10-PCS except evaluation and management services and it is applicable to all settings and types of providers except physicians' evaluation and management services.
  
• Non-overlapping: Each procedure is assigned to only one code
  
• Ease of use: All terminology is precisely defined and is used consistently
  
• Setting and provider neutrality: Codes are independent of who performs the procedure or where the procedure is performed
  
• Multi-axial: The body system(s) affected, technology used, and techniques/approaches used are all specified in each code
  
• Limited to classification of procedures: No diagnostic information or other data elements are included in the codes

ATTACHMENT THREE

AHIMA's Recommendations and Principles for Code Set Maintenance

Like the retraining issue, the challenges of maintenance, particularly for a procedural system, are exponentially more complex today than 20 years ago. Yet our process is not fit for the pace of change or the needs of our stakeholders. As we examine how and when to implement new code sets, we must commit ourselves to modernizing the process for their maintenance.

Principles

AHIMA believes the following six principles should guide code set maintenance in the future, including maintenance of ICD-10-PCS:

• The committee responsible for system maintenance should be comprised of representatives of all major stakeholder groups, including the government, providers, and private payers.
  
• The maintenance process should be open, with public meetings (broadcast live over the Internet) and opportunities for public input both at and outside of the meetings.
  
• Due to the rapid advances in medicine and technology and the immediate need for codes to describe these advances, the maintenance process should be more streamlined, with consideration given to the feasibility of more frequent system updates.
  
• The lag time between proposal of a new code and its implementation should be minimized.
  
• There should be an established process for developing rules and guidelines for the correct application of the coding system. The process should be open and permit broad input from all stakeholders prior to finalization of a significantly revised or changed guideline. The coding system rules and guidelines (and consequent payment system changes) should be updated on the same schedule as the code set and made part of the official version.
  
• All requisite materials-code sets, guidelines, and other directives-should be in formats available from government or private entities. This would ensure that all stakeholders know where to go for unfettered access to the official, most up-to-date versions and interpretive materials.

National Committee on Vital and Health Statistics. "Recommendations for a Single Procedure Classification System."
November 1993.

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