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Classification Codes

October 1, 2004
by root
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ICD-9-CM: An uphill struggle.

Not unlike the stale piece of cheese in the fridge that no one has the courage to remove, version 9 of the clinical modification of the International Classification of Diseases codes (ICD-9-CM) long ago passed its expiration date. That might not be a problem, except that the code is the basis of the prospective payment system, upon which is built the foundation for U.S. healthcare reimbursements.

Caregivers who code incompletely leave money laying on the table. Those who do it wrong face regulatory sanctions and fines. But the task of keeping up with rapid--and often illogical--changes to ICD-9-CM while navigating often-inconsistent reporting rules has become so onerous, and the scrutiny on coded data so intense, that many qualified coders have left the field. The time has come for ICD-9-CM to go the way of the abacus, says Rita Scichilone, director of coding products and services at the American Health Information Management Association (AHIMA), Chicago.

"We do need to replace it," she says. "It doesn't meet the needs of the 21st century." ICD-9 replaced its predecessor, ICD-8, 25 years ago. Until then, medical classification systems generally were replaced once a decade because of rapidly changing medical terminologies, procedures and technologies. "But because of the investment in the reimbursement systems and data gathering in the United States, we've hung onto it," Scichilone says.

Ironically, a replacement--ICD-10-CM and the related procedure classification, ICD-10-PCS--waits in the wings. ICD-10 was adopted in 1994 as the standard by the World Health Organization and is used throughout Europe. When it is adopted by the United States, the new system will be a lot more precise in identifying conditions and diagnoses--and, unlike ICD-9-CM, it is unlikely to run out of space.

ICD-9-CM, on the other hand, is a code in chaos. Maintenance of the diagnosis classification system is handled by the National Center for Health Statistics, Hyattsville, Md., while the Centers for Medicare and Medicaid Services, Washington, D.C., maintains procedure classifications. In an attempt to keep ICD-9-CM afloat, new diagnoses and procedures often have been grouped into classifications that don't logically fit with basic underlying conditions. Some terms and classifications are outdated. "There are a lot of discrepancies within the ICD-9 coding system," says Chris Ritchie, director of health information services at St. John's Health Center, Santa Monica, Calif. "I would say the biggest problem with it is the lack of specificity."

ICD-10 will largely resolve that. Its alphanumeric structure and seven-character code length will allow for greater detail than the five-digit numeric ICD-9-CM code structure. "I don't think there's much of an argument. It needs to be replaced, and as quickly as possible," Scichilone says.

Making do
That's not going to happen for another couple of years. According to AHIMA, the federal notice of proposed ICD-10 rulemaking may occur in February or March 2005. If a final rule gets adopted, a 24-month public-comment period would follow. Since healthcare organizations can't wait to be reimbursed, they have been finding ways to cope with ICD-9-CM.

"The difficulty that I see," says Wes Rishel, an analyst at Stamford, Conn.-based Gartner, "is that it's an art form looking at all the facts associated with a case and picking the right codes. And the difference between almost the right codes and the right codes is a fair amount of money."

The past several years have seen the emergence of remote-coding application service providers (ASPs) like eWebHealth, Alpharetta, Ga., and Nauvalis Healthcare Solutions, Nixa, Mo. They don't alleviate coding problems, but they do help relieve the coder shortage by using document-imaging technology to scan medical records and progress notes for secure transmission over the Internet, allowing coders to work at home. "It allows the organization to be able to retain coders," says Beth Friedman, eWebHealth's director of marketing. "It eliminates the open positions."

Another ASP, CodeCorrect, Yakima, Wash., helps coders figure out how to navigate regulations that further complicate ICD-9-CM coding tasks. "All the hospital coders, the charge-master people or the department directors need is an Internet connection and their browser. And they can put in an ICD-9 code and get all of the regulatory information available about that code," says Kerry Martin, CodeCorrect's CEO. "And they can get [it] for whoever they're sending the bills to, or get the national information."

There is also an increasing trend toward outsourcing of coding work, either to centralized offsite--and increasingly, offshore--locations, or onsite at provider facilities. Among the companies engaged in domestic outsourcing are Precyse Solutions, King of Prussia, Pa.; KForce Inc., Tampa, Fla.; and C.H.I.S. Inc., Palm Desert, Calif.

C.H.I.S. President Mark Perlmuetter says the coder shortage has led to widespread outsourcing, following the pattern of medical transcription work and radiology. "It is more efficient, easier and less management than the recruitment and maintenance of employees to do that work," says Perlmuetter, whose company employs 15 coders. "Our coding quality coordinator has told me that if he could have 10 more people, he could have 10 more people working. The trouble is finding the qualified people."

In fact, the Chicago-based American Hospital Association reported in 2001 that the vacancy rate for coder positions stood at 18 percent, even higher than the 11 percent nursing shortage.