Coding Countdown Causes Medical Mayhem

After a two-year delay, U.S. hospitals have to start using a new coding system in October -- a move that could hurt rural and smaller hospitals particularly hard.
by | September 28, 2015

Have you been sucked into a jet engine, twice? Suffering from problems with your in-laws? Did you get injured in the library? Well, you’re in luck.

Because there’s a code for that.

For more than a century, the World Health Organization has classified ailments using the International Classification of Diseases (ICD), which serves the health-care community in several ways. In most cases, a patient comes to see a physican, who makes note of what's ailing them. A medical coder will often then translate those notes into a precise code, which hospitals send to insurance companies to process payments. ICD reporting also helps with mortality statistics and can track outbreaks. Medical providers in the United States have been using the ninth version of ICD, called ICD-9, since 1979.

Many other countries have moved to ICD-10, which has more than 100,000 new codes to better specify the kind of ailment someone has. The U.S. was originally scheduled to transition in October 2013, but the Obama administration delayed it and then Congress delayed the move in 2014. With no other government hurdles, hospitals have to make the change on Oct. 1.

ICD-10 requires a physician to be more precise when billing for treatment. The new code, for example, requires doctors to specify if the injury has happened to the patient before, if a broken bone is in the left or right arm or leg, or if an ailment is the result of a pre-existing condition.

The process of transitioning to a new catalog of codes -- with much more information -- across the entire United States will be difficult. Incorrect coding, extra tests on patients in order to get the precise code and software miscommunication with payers will likely cause delayed payments for hospitals.

“Hospitals should anticipate about a month of cash flow loss at the beginning,” said Tyler Wallace, a health systems professional and founder of Rural ICD, a resource guide for smaller hospitals making the transition.

But for rural hospitals, a month of cash flow loss is tough to sustain.

Rural hospitals (and small institutions, called critical access hospitals, which are facilites located at least 35 miles from another hospital with no more than 25 inpatient beds) “are just trying to get through today, and that makes it really difficult to plan for the future," said John Behn, consultant with Stroudwater Associates, a health-care consulting firm. "In bigger hospitals, you’re allowed to be a specialist in something. Employees in rural hospitals have to be experts in a ton of things.”

Hospitals often employ coders who will take a physician’s notes and send off the code to insurance companies. But rural physicians often do their own coding, meaning they have to become acquainted with all the new codes and their rules -- on top of everything else, said Lori Beaudry, vice president of Clinical Financial Resource, Inc., a health-care coding company.

“For example, a doctor used to just write D.M. for diabetes, and that was acceptable. Under ICD-10, I need to know if the patient has type 1 or type 2, if they’re insulin dependent, if they suffer from hypoglycemia or from hyperglycemia, and any other complications they may suffer,” Beaudry said.

“ICD-10 requires a whole other level of documentation in its coding,” she said. Beaudry, based in Massachusetts, said she’s been sending ICD-10 coding information to rural hospitals in her state piecemeal since “doctors don’t like getting a lot of information at once.”

In a survey that Behn conducted of 25 hospitals, “17 won’t be getting claims out of the door come Oct. 1. It’s worrisome.”

Some smaller hospitals have had to open lines of credit in anticipation of the potential cash flow loss. The Nemaha County Hospital in Auburn, Neb., has been ready for a year, because as CEO Marty Fattig says, with all of the government delays, “we’ve had ample time to prepare.” However, he says his hospital might be in the minority as far as rural facilites go.

“I was in a discussion about ICD-10, and I made a comment that I thought it was overall going to be a good thing for us, and boy was I chastised. There has been resistance in some of these rural hospitals -- because it requires much more information, people just don’t want to do that," he said.

Some of the resistance also comes from the two-year delay implementing the new code. Since medical facilities have known about ICD-10 for years now, some smaller hospitals have put off capital improvement projects in anticipation of the potential delayed payments ICD-10 would cause, Wallace said. These postponements have hurt hospitals and led to exasperation among hospital workers on whether or not the transition was ever going to happen.

But even hospitals that feel prepared are likely to have problems.

“Even if you’re prepared, the transition will still probably cause a little bit of a headache. If you’ve weakly prepared, ICD-10 is really going to make you sick,” Behn said.