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Value of ICD-10

ICD-10 provides better data needed to meet the demands of an increasingly global and electronic healthcare environment. It provides a significant opportunity to improve the capture of information about the increasingly complex delivery of healthcare. ICD-10 will provide better data to support:

• Quality measurement and patient safety improvement activities
• Pay-for-performance initiatives
• Improved public health and bio-terrorism monitoring
• More accurate reimbursement rates

Complete, accurate, and up-to-date procedure codes are necessary in order to capture accurate data about the outcomes, efficacy, and costs of new medical technology and to ensure fair and equitable reimbursement policies for the use of this technology. Up-to-date diagnosis codes that reflect current medical knowledge are also important for accurate data capture in the use of new medical technology because they are used to:

• Substantiate the medical necessity of diagnostic and therapeutic services,
• Support the efficacy of the technology for various clinical conditions, and
• Identify complications and adverse effects from the use of the technology.

Continued use of the outdated version of ICD (ICD-9-CM) diminishes the value of the US investment in SNOMED-CT®. ICD-10-CM and ICD-10-PCS are better suited for use in EHR systems than ICD-9-CM. The anticipated benefits of an EHR cannot be achieved if the reference terminology employed in the EHR, such as SNOMED-CT®, is aggregated into a 30-year old classification system such as ICD-9-CM for administrative use and indexing. ICD-10 coding system facilitates more robust mapping from SNOMED-CT clinical reference terminology in the EHR due to its greater size and granularity.

For more information on the benefits of ICD-10, read "Why ICD-10 is Worth the Trouble" feature article in the March 2008 Journal of AHIMA.

Benefits Outweigh the Costs

Extensive development and evaluation of ICD-10-CM/PCS as replacements for ICD-9-CM have been conducted. This includes system testing, completion of a comprehensive cost/benefit analysis, and hundreds of hours of testimony by experts who examined all sides of the issue.

The cost of doing nothing may be greater than implementation. Continuing to use ICD-9-CM will increasingly have an adverse impact on the value of healthcare data, including the accuracy of decisions based on faulty or imprecise data. Additionally, any delay in adoption of ICD-10 will cause an increase in future implementation costs. As the management of health information becomes increasingly electronic, costs of implementing new coding systems will increase due to required systems and application upgrades.

The Rand Report

The Rand Report is an independent study commissioned at the request of the National Committee on Vital and Health Statistics (NCVHS). Rand concluded that benefits of ICD-10 are likely to exceed initial implementation costs within just a few years.

Implementation Costs include:

• Training
• Lost productivity during implementation and training
• System upgrades/changes

Future benefits include:

• More accurate payment for new procedures
• Fewer miscoded, rejected, and improper reimbursement claims
• Better understanding of the value of new procedures and healthcare outcomes
• Improved disease management

Rand estimates the cost of industry-wide implementation will be between $450 million and $1.115 billion. Even when using Rand’s highest cost estimates, the average cost per entity is less than $1,000 when amortized over the more than 2 million healthcare entities in the US.

AHIMA/AHA Field Study

In 2003, AHIMA and AHA conducted a field-test of ICD-10-CM medical code sets. The study shows ICD-10 is a significant improvement over the current ICD-9-CM coding system and can be implemented without excessive staff training costs or changes in documentation practices. Training ICD-9-CM users to use ICD-10-CM was shown to be relatively straightforward as ICD-10-CM retains the traditional ICD format and many of the same conventions. New training methods and the Internet will support cost effective retraining of coders. 

AHIMA testified before the NCVHS that adoption of ICD-10-CM and ICD-10-PCS would serve as a catalyst for the development of computer-assisted coding applications. In the NCVHS testimony, as well as in a practice brief titled “Delving into Computer-Assisted Coding,” several benefits of the use of computer-assisted coding technology were described:

• Increase in coding productivity,
• Increase in coding consistency,
• Increase in coding accuracy,
• Enhanced coding compliance,
• Potential decrease in coding costs, and
• Better documentation at lower cost.

As supported by AHIMA’s “Report on the Use of Health Information Technology to Enhance and
Expand Health Care Anti-Fraud Activities,” prepared under contract to the Office of National Coordinator for Health Information Technology, adoption of ICD-10-CM and ICD-10-PCS would facilitate the prevention and detection of healthcare fraud. This report includes the following guiding principle in its conclusion and recommendations: “Standardized reference terminology and up to date classification systems that facilitate the automation of clinical coding are essential to the adoption of interoperable EHRs and the associated IT enabled healthcare fraud management programs.”

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