United States: Preparing For ICD-10: Staying Ahead Of The Compliance Curve

Last Updated: June 24 2013
Article by Dan Vogt

Your deadline to implement ICD-10 is October 1, 2014. Beyond simply meeting compliance, this marks an opportunity to improve your delivery of data-supported health care outcomes.

ICD-10 may not be the flashiest aspect of the industry-wide effort to improve health care delivery, but it may be one of the most far-reaching. These codes touch almost every piece of the health care puzzle, from providers to payers. The challenge is that not everyone realizes the impact of the ICD-10 transition. The key is to understand how your organization is affected and how to identify which areas of operation will be impacted. You'll likely discover that your organization is highly impacted by ICD-10—nearly every area of your operations will be affected.


The World Health Organization put forth the updated ICD-10 codes in 1990. Other countries adopted ICD-10 starting in the mid-90s. The US is set to transition to ICD-10 on October 1, 2014, for Diagnosis and Inpatient Procedure Codes

Why is the US switching to ICD-10?

ICD-9 contains outdated terminology that is inconsistent with current medical practice. The code structure of ICD-9 is limited for further expansion, and the ICD-9 codes lack detail and specificity compared with ICD-10. The push for data analysis, outcome-based healthcare, and claim processing automation requires a more detailed, expandable, and flexible coding set.

Who is affected by the ICD-10 compliance deadline?

Everyone covered by the Health Insurance Portability and Accountability Act (HIPAA) is required to successfully conduct health care transactions using ICD-10 codes. All the entities involved in health care delivery and management use ICD coding, including payers, banks, clearinghouses for claims, providers, outsources services, employers, insurance brokers, and the Treasury.

What is affected by the ICD-10?

Changes in the diagnosis codes and inpatient procedure codes will impact your organization. In the tables below you can see the increase in the number of codes, code composition, and code complexity. This change will touch nearly all areas of your organization from the revenue cycle and coding teams to your providers.

Diagnosis Codes



Field Length

3 – 5 Characters

3 – 7 Characters

Available Codes

Approx. 13,000

Approx. 68,000

Code Composition

Digit 1 = alpha or numericDigits 2 – 5 = numeric

Digit 1 = AlphaDigit 2 = NumericDigit 3 – 7 Alpha or Numeric

Inpatient Procedure Codes



Field Length

3 – 4 Characters

7 alpha-numeric characters; all are required

Available Codes

Approx. 3,000

Approx. 72,000

Code Composition

Not Applicable

Specific meaning for character position by classification (e.g., med surg, mental health, etc.)

Why should you care?

If you don't meet the 2014 deadline, your claims can't be processed. This is an impact to revenue that no organization can weather.

According to the CMS FAQs for ICD-10 Transition Basics, "Claims for all services and hospital inpatient procedures performed on or after the compliance deadline must use ICD-10 diagnosis and inpatient procedures codes. Claims that do not use ICD-10 diagnosis and inpatient procedure codes cannot be processed."

Putting ICD-10 into context

We recognize that in the world of health care, ICD-10 is just one of the many large efforts that you are undertaking right now. You're dealing with Meaningful Use, ACOs, health care reform, IT security, EHR Adoption, consolidation, state budgets challenges, and on and on. The good news is that ICD-10 is a manageable project if you move through it in a deliberate, thorough, and organized manner.

Potential Pitfalls

We caution you to watch out for some possible issues that could complicate your execution of the transition process.

The "Silo Effect"occurs when you treat ICD-10 as a department level project. We often hear ICD-10 described as an IT project or a coding project. In reality, it is an enterprise-wide effort and will require all departments to participate in some capacity. ICD-10 crosses all areas, and you don't want to let a database or a legacy process get overlooked in the inventory or transition.

A lack of granularity could lead to not assessing, testing, communicating, or training with enough detail or structure to fully identify areas of concern. This is a project that requires both a microscope and herding stick. You need to corral all of your departments to participate and then examine their operations at a pretty low level to determine how they will be impacted by ICD-10.

Be wary of relying too much on your vendor's statements of readiness. Just upgrading to the ICD-10-ready version of software is not enough. You'll have internal preparation activities, changes in business process, testing, and training. You also need to have a back-up plan in the event that your vendor does not meet the ICD-10 deadline.

The last possible pitfall is not engaging in enough planning, testing, and communication with your payers and partners. The testing, transition, and monitoring stages require work with your outside entities to determine whether the implementation steps you have taken independently will work together.

The Silver Lining

ICD-10 is a compliance initiative with a fast-approaching deadline, but it's also an opportunity to assess and improve the communication and practices across your whole organization. Check out our useful tool, Planning for Compliance, 5 Steps for Readiness.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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