Preparing for ICD-10: The Basics

by Donna Weinstock

If there is one thing we can be sure of in healthcare, it is that things are always changing. This time the change is really significant.

Effective October 1, 2013, ICD-10 codes must be used on all HIPAA transactions. Additionally, effective January 1, 2012, electronic health care transactions must be processed using Version 5010, a format that will accommodate the ICD-10 codes.

While there are always questions and uncertainty surrounding change, one thing is certain: payers and providers who are not prepared will suffer. Providers will face rejected claims and delayed reimbursement. Payers will experience a huge influx of support calls and customer service issues.

There are several steps that a practice can take to be ready for each of these deadlines. To implement the 5010 transactions by January 1, 2012, a practice should:

  • Conduct an impact analysis
  • Contact your software vendor to be certain their systems will be upgraded to meet the requirements
  • Contact your trading partners including your billing service, clearinghouses and payers
  • Undergo installation of vendor upgrades
  • Conduct internal testing and staff training
  • Conduct external testing with trading partners
  • Make the switch to Version 5010

Unlike ICD-10 codes, the switch to Version 5010 can be made and utilized prior to the required date provided the practice’s payers and billing partners are also set up and ready for this change. After January 1, 2012, all claims submitted using version 4010 will be rejected.

ICD-10 was developed by the World Health Organization (WHO) in 1989 and released in 1994. Although the U.S. implemented mortality reporting in 1999, we continued to use ICD-9 codes. In January 2009, the Department of Health and Human Services announced that the US would join with the rest of the world and switch from using ICD-9 to ICD-10.

With the use of ICD-10 codes, the total number of codes expands from about 14,000 to 68,000 codes. The codes will be alpha-numeric, expand in length to 3-7 characters and will offer much more specific descriptions.

The new ICD-10-CM codes will be more specific, more flexible and allow for improved measures of healthcare services. It uses current medical terminology whole acknowledges the advances in medicine and medical terminology.

The breakdown of the specific code characters are as follows:

  • Characters 1-3 offer the category
  • Characters 4-6 is the etiology, anatomic site, severity or other clinical details
  • Character 7 describes the extension

What is the best approach to being ready to implement ICD-10 on the appropriate date?  It is best to:

  • Conduct an impact analysis to determine how it will affect your practice
  • Contact your payers
  • Contact your vendors to verify they will have their processes in place
  • Contact your clearinghouse and/or billing service
  • Undergo installation of vendor upgrades
  • Conduct internal testing
  • Update internal processes
  • Conduct staff training
  • Conduct external testing with trading partners
  • Make the switch to ICD-10 on October 1, 2013

The best option for making a smooth transition is to plan ahead. Take the transition in phases. Review your systems, contact your partners, train your staff and be prepared!

© 2011 Efficiency in Practice

Donna Weinstock is a Senior Consultant at InHealth, and the President of Office Management Solution.  She can be reached at

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