Hospital coding and billing professionals will be required to have an understanding of the ICD-9-CM coding system and will need to transition to ICD-10. In an effort to provide current and future knowledge required for hospital professionals, this text presents concepts on coding using ICD-9-CM and ICD-10. The previous chapter presented concepts on coding medical conditions and significant procedures using ICD-9-CM. This chapter will focus on coding medical conditions using the ICD-10-CM coding system.

The objective of this chapter is to provide an overview of the evolution of diagnosis coding systems to ICD-10-CM. A review of how ICD-10-CM impacts documentation, medical necessity, claim form submission, and reimbursement will demonstrate the importance of preparing for the transition to ICD-10. A discussion of how ICD-10-CM data is used will provide an understanding of the importance of accurate coding. The transition from ICD-9-CM to ICD-10-CM will be discussed followed by a review of the content, organization, structure, conventions, and guidelines of ICD-10-CM. A review of the basic steps to coding conditions using ICD-10-CM will provide an enhanced understanding of the coding process. The chapter’s focus is on diagnosis coding using ICD-10-CM. We will explore coding of procedures using HCPCS and ICD-10-PCS in the next chapter.

Evolution of Diagnosis Coding

As discussed in the prior chapter, the evolution of classification systems for coding medical conditions dates back to the 17th century, when systems were originally developed to track the number of deaths in children. Coding of medical conditions (diseases) began in England in the 17th century with the work of John Graunt. John Graunt developed the London Bills of Mortality in an attempt to estimate the proportion of live-born children who died before reaching the age of 6 years. As centuries passed, the attempts to classify causes of death and diseases continued. The International List of the Causes of Death was developed based on the London Bills of Mortality. I was presented at the International Statistical Institute and was adopted in 1893. Several countries adopted the International List of the Causes of Death during the 19th century. Six revisions were made to the International List of the Causes of Death through 1948, and the sixth revision included a name change to the International Classification of Diseases (ICD). The Interim Commission of the World Health Organization (WHO) was given the responsibility for the sixth revision and also for the establishment of a list of causes of morbidity for international use. Information about the World Health Organization (WHO) can be viewed on its Web site at www.who.int/en/.

From 1948 to today, there have been several revisions of the ICD. During the 1950s, hospitals began to describe diseases and procedures using the ICD-7. A revision was made in 1962 that included the first “Classification of Operations and Treatments” for hospital use. The National Committee on Vital and Health Statistics (NCHS) was established to serve as a liaison between national statistical institutions and WHO. Many international statistical organizations used medical records to capture morbidity and mortality information. Morbidity refers to the patient’s illness or disease. Mortality refers to death.

The International Classification of Diseases (ICD) underwent revisions 1-9 as the quest continued to develop a uniform system to classify disease that could be adopted worldwide. The ideal system would statistically capture detailed information regarding morbidity and mortality that could be adopted internationally. Figure 7-1 illustrates the evolution of diagnosis coding systems to ICD-10-CM.

International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)

The International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) is the standard coding system currently used to describe a patient’s condition, injury, illness, disease, or other reasons the patient is receiving health care services. ICD-9-CM is also used by hospitals to describe significant procedures performed during a hospital inpatient stay. Diseases listed in the ICD-9 were primarily acute and related to conditions resulting from infectious diseases found in Europe. The types of conditions seen in Europe were different from those in the United States. Medical and technological advances led to new knowledge about diseases, which was not incorporated into the ICD-9. A modification to the ICD-9 was required to include more detailed information regarding diseases and procedures that would be more reflective of the conditions seen in the United States.

ICD was “clinically” modified to enhance the classification and collection of morbidity data and for indexing medical records. The World Health Organization (WHO) permitted the United States to clinically modify the ICD-9 to provide an adequate reflection of conditions seen in the United States. The Department of Health and Human Services (DHHS) published the modified version of the ICD-9, called the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM), in 1979. Despite this modification, the reality that ICD required further revisions and restructuring existed. The ICD-9 system did not have the capacity, numerically, to accommodate new or expanded codes that describe patient illness and treatments seen today. The ICD-9 system is clinically outdated and does not contain the specificity needed to adequately capture data regarding patient conditions and treatments reflective of today’s medicine that can be adopted internationally. The ICD-10 system was developed to address these issues. It was endorsed by the World Health Assembly in 1990.

International Classification of Diseases, 10th Revision (ICD-10)

The 10th revision of the ICD was originally named the International Statistical Classification of Diseases and Related Health Problems (ICD-10). This revision maintained the basic structure of ICD-9, but it included a higher level of clinical detail. In 1990, the Forty-third World Health Assembly endorsed ICD-10. The World Health Organization (WHO) published the newest version of the ICD with a new name, the International Classification of Diseases, 10th Revision (ICD-10), in 1993. ICD-10 has been implemented in many other countries including the United Kingdom, France, Australia, Germany, and Canada. WHO granted permission to the National Center for Health Statistics (NCHS), an agency under the Centers for Disease Control and Prevention (CDC), to clinically modify ICD-10 and to create a procedure coding system to replace ICD-9-CM Volume III. The Department of Health and Human Services (DHHS) published a final rule in 2009 adopting the International Classification of Diseases, 10th Revision (ICD-10) as the standard coding system for coding conditions and significant procedures performed during a hospital inpatient stay. ICD-10 will replace ICD-9-CM Volumes I-III. In accordance with Health Insurance Portability and Accountability Act (HIPAA) provisions, the compliance date for all covered entities was October 1, 2013. However, the Department of Health and Human Service (DHHS) has published a final rule that includes delaying the ICD-10 compliance date to October 1, 2014. ICD-9-CM contains diagnosis codes and procedure codes in one manual. ICD-10 consists of two different coding systems, ICD-10-CM and ICD-10-PCS, and they are in two separate manuals.

International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM)

ICD-10-CM is the standard coding system that will replace ICD-9-CM, Volumes I and II, and it will be used to describe a patient’s condition, injury, illness, disease, or other reasons the patient is receiving health care services. ICD-10-CM contains three volumes that include a tabular list of disease, alphabetic index to diseases, and official guidelines. The content, format, conventions, and coding used in ICD-10-CM will be discussed further in this chapter.

International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS)

ICD-10-PCS is the standard coding system that will replace ICD-9-CM, Volume III, and it will be used to describe significant procedures performed during an inpatient stay. ICD-10-PCS contains an alphabetic index, tables, a tabular list of procedures with full description, and guidelines. The content, format, conventions, and coding using in ICD-10-PCS will be discussed further in the next chapter.

BOX 7-1 CONCEPT REVIEW
Evolution of Diagnosis Coding

• London Bills of Mortality

• International List of the Causes of Death (Revisions 1-6)

• International Classification of Diseases (ICD) (Revisions 6-9)

• International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)

• International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM)

Impact of ICD-10

The implementation of the ICD-10 coding systems will impact all aspects of the health care industry from technology to health care policy. ICD-10 has been adopted in many countries and will be adopted in the United States. ICD-10 will provide meaningful health care data that accurately reflects conditions and treatments seen in today’s medical practice, and the data can be used worldwide. ICD-10-CM provides greater detail in describing patient conditions and the severity of those conditions. The terminology and disease information is updated. Combination codes that describe symptom, manifestations, and diagnosis are included. Details regarding injuries have been expanded. ICD-10-CM also includes expanded information on health care encounters for reasons other than disease as well as information relevant to ambulatory and managed care encounters. The level of detail in ICD-10-CM will promote quality coding, which is necessary to ensure that accurate and reliable data is gathered for budgeting, clinical research, credentialing, peer review, education, financial analysis, marketing, patient care, quality assurance, risk management, strategic planning, utilization management, and other internal or external facility purposes. It is important for hospital coding and billing professionals to understand the impact of ICD-10 on documentation, medical necessity, claim forms, and reimbursement (Figure 7-2).

TABLE 7-1

Claim Variations for ICD-10-CM Diagnosis Codes

ICD-10-CM diagnosis codes will be used to report patient conditions or other reasons for the visit for all (inpatient, outpatient, or non-patient) services.
Diagnosis Coding	Inpatient	Outpatient/ Non-Patient	ICD-10-CM Official Guidelines
Principal Diagnosis
The condition determined after study to be chiefly responsible for admission of the patient to the hospital for care	Form Locator 67	Not applicable	Section I, II: General Coding, Chapter-Specific, Selection of Principal Diagnosis and Present on admission
Other Secondary Diagnosis
Secondary diagnosis Complications and comorbidities (coexisting conditions)	Form Locator 67A-Q	Form Locator 67A-Q	Section I, III: General Coding, Chapter-Specific, Reporting Additional Diagnoses and Present on admission
Admitting Diagnosis
The major most significant reason the patient is admitted	Form Locator 69	Not applicable	Section I, II: General Coding and Chapter Specific
Patient’s Reason for Visit Diagnosis
The major most significant reason for the outpatient visit	Not applicable	Form Locator 69	Section I, II, IV: General Coding, Chapter-Specific and Diagnostic Coding, and Reporting for Outpatient Services
External Cause of Injury
External causes of the injury or illness	Form Locator 72a-c	Form Locator 72a-c	Section I: General Coding and Chapter-Specific *Note: Guidelines for reporting external causes vary by payer.*

Note: Present on admission (POA) indicators are required for the principal and other secondary diagnoses and the external cause of injury codes.

The principal diagnosis is recorded in FL 67. The term principal diagnosis is generally used for facility claims. FL 67A–Q are used to record other secondary diagnosis codes representing complications, comorbidities, or other reasons for the admission. Inpatient claims require a POA indicator for principal and other secondary diagnoses. The admitting diagnosis is recorded in FL 69. The patient’s reason for visit diagnosis is recorded in FL 70 on outpatient claims. If there is an external cause of injury, the appropriate code to describe it is recorded in FL 72. The payer will carefully review the codes reported to determine whether the medical necessity requirements were met for the admission and services provided.

Reimbursement

Reimbursement is the term used to describe payment for health care services provided. Claim forms are submitted to third-party payers, such as insurance companies, Medicare, and other government payers, to obtain reimbursement for services provided. Diagnosis codes are recorded on the claim form to explain why the services were provided and to establish the medical necessity of services provided. Payers provide reimbursement for services that are covered by the patient’s plan and that are considered medically necessary based on standards of medical care. Therefore, it is critical to ensure that the codes submitted completely describe the patient’s medical condition(s) to explain why the services were necessary.

Reimbursement methodologies for services provided on an outpatient basis are determined by the procedure code submitted. The diagnosis code is needed to explain the medical necessity of services. Initially, ICD-10-CM may not have an impact on reimbursement for outpatient services since the payment is determined based on the procedure code(s) submitted. However, the diagnosis codes do explain medical necessity. Hospital inpatient services are reimbursed based on Medicare Severity-Diagnosis Related Groups (MS-DRG). The MS-DRG reimbursement is determined based on the patient’s diagnosis and treatment required. ICD-10-CM will have a direct impact on MS-DRG reimbursement. MS-DRG groups will be converted to ICD-10-CM, which may result in changes in the MS-DRG reimbursement system. Over time, the data captured using ICD-10-CM may be used to update and develop new reimbursement methodologies.

BOX 7-4 CONCEPT REVIEW
Impact of ICD-10

Documentation

• Requires clinical documentation improvement (CDI)

Medical Necessity

• Higher level of specificity may reduce the need to submit additional documentation

Claim Forms

• Claim forms have been revised, implementation of Health Insurance Portability and Accountability Act (HIPAA) standard format to Version 5010 effective January 1, 2012

Reimbursement

• Medicare Severity-Diagnosis Related Groups (MS-DRG) categories are being converted to International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM)

BOX 7-1 Test Your Knowledge
EVOLUTION OF DIAGNOSIS CODING; IMPACT OF ICD-10

True/False

1. Coding of medical conditions (diseases) began in England in the 17th century with the work of John Graunt.	T	F
2. In 1962, hospitals in the United States began using the International Classification of Diseases, 6th revision (ICD-6) to describe diseases and procedures.	T	F
3. ICD-10-CM provides greater detail in describing patient conditions and the severity of those conditions, therefore the transition to ICD-10-CM will require improved clinical documentation.	T	F
4. The DHHS published the modified version of the ICD-9, called the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM), in 1979.	T	F
5. In accordance with HIPAA provisions, the compliance date for all covered entities to implement ICD-10 as the standard coding system for coding conditions and significant procedures is October 1, 2013.	T	F