New Injury Coding System May Save Employers Money

The way employers code and report workplace injuries has changed, and it might help them them money. The US Centers for Medicare and Medicaid Services (CMS) required all entities covered by the Health Insurance Portability and Accountability Act (HIPAA) to adopt the International Classification of Diseases, Modification, and Procedural Coding Systems, Revision 10 (ICD-10) to report injuries and illnesses. The requirement, which took effect October 1, 2015, also applies to claim administrators and workers' compensation insurers.

Previously, injuries and illnesses were reported using the ICD-9 system. However, ICD-9 failed to capture medical progress made in the past few decades. It has been modified over the years to keep up, but ultimately was not flexible enough.

The new codes are structurally different. The ICD-9 codes had three to five characters. ICD-10 codes have five to seven characters. It has two sets of codes -- diagnosis codes used in all health care settings, and inpatient procedure codes used in hospital settings. The new system has more than 14,400 unique codes. It is expected to permit authorities to track many new diagnoses. In addition, the new codes will more specifically describe conditions. Each code will convey more information than did the previous system.

The specificity of the new system may give employers who use utilization management systems some advantages. Because each code contains more information, pre-certification of treatments and nurse case management may be more effective. Employers may be better able to measure health outcomes, report and track injuries and illnesses, and obtain more accurate reimbursement for payments.

For example, the ICD-9 code for atrial fibrillation could increase a particular case's severity of illness (SOI). The ICD-10 system has a specific code for chronic atrial fibrillation, which does not increase the SOI. The difference in codes has implications for appropriate treatments, with accompanying differences in costs.

The CMS delayed implementation of the new system multiple times. However, the system now applies to injuries that occur on and after October 1, 2015. It can be used for injuries that occurred before that date, but each claim must use one system or the other only. It might not make sense to use ICD-10 for minor injuries that occurred before that date. However, employers may decide to use it for earlier injuries that they will be tracking for several years ahead.

Employers transitioning to the new system can make the process smoother with a few steps:

•  Test reporting systems for compliance before they go live.
•  Train staff, including risk managers and others involved in workplace safety, on how to use the new codes.
•  Use tools that make it easy for staff to look up the new codes or convert the old ones to the new ones.
•  Have network connections between a bill-review agent's system and the employer's reporting system to eliminate coding discrepancies for pre-October 1 injuries.

Every changeover from one system to another comes with bumps in the road, but the long-term improvements that come with ICD-10 should outweigh the short-term headaches.

We look forward to discussing this and other insurance related topics with you.  Please contact your Account Manager or Patrick Darcey, CIC - Principal at 401-671-6355 or [email protected].