Combination code explosion: An illustration

The Blue Cross Blue Shield Association highlights the complexity of ICD-10-CM in a presentation on its web site.

On slide 9 of the presentation is a nice illustration of how ICD-10-CM takes a single code from ICD-10 and explodes it out into 144 codes. ICD-10-CM is based on ICD-10 from the World Health Organization. Individual member countries may modify ICD-10 within certain constraints. Australia (ICD-10-AM) and Canada (ICD-10-CA) both have made modifications.

Well, when the National Center for Health Statistics modified ICD-10 to create the United States' clinical modification or ICD-10-CM, it frequently took one or a small number of ICD-10 codes and "expanded" them out to a much larger number of combination codes.

Going back to the illustration of combination-code explosion from the BCBSA, ICD-10 has code S42.0 for fracture of the clavicle (the clavicle is also commonly referred to as the collar bone).

Canada chose to expand this code out to eight codes in ICD-10-CA:

1. S42.01 - fracture of sternal end of clavicle
   
2. S42.01 - fracture of shaft of clavicle
   
3. S42.02 - fracture of acromial end of clavicle
   
4. S42.09 - fracture of unspecified part of clavicle
   
5. S47 - multiple fractures of clavicle
   
6. M84.11 - nonunion, shoulder region
   
7. M84.21 - delayed union, shoulder region
   
8. M84.22 - malunion, shoulder region

Below, we list the 144, seven-character ICD-10-CM codes for fracture of the clavicle. The 144 codes add laterality, whether the fracture is displaced and if so in what direction, and information about which encounter and whether there is "routine healing", malunion, and so on. Note that all the four-, five-, and six-character codes beginning with S42.0 (it is typical in ICD not to count the decimal point as a character) are also part of ICD-10-CM. There are 1 four-character, 4 five-character, and 24 six-character codes, for a grand total of 173 codes, although only the 144 seven-character codes will be valid for reimbursement (in all likelihood).

From one code to 173 codes as we go from ICD-10 to ICD-10-CM. Combinatorial explosion.

ICD-10: ~12,000-13,000 codes
ICD-10-AM: ~16,000 codes
ICD-10-CA: ~30,000 codes
ICD-10-CM: >68,000 codes

The 144, seven-character ICD-10-CM codes for fracture of the clavicle (with thanks to the BCBSA):

1. S42.001A Unspecified part of right clavicle, initial encounter for closed fracture
2. S42.001D Unspecified part of right clavicle, subsequent encounter for fracture with routine healing
3. S42.001G Unspecified part of right clavicle, subsequent encounter for fracture with delayed healing
4. S42.001K Unspecified part of right clavicle, subsequent encounter for fracture with nonunion
5. S42.001P Unspecified part of right clavicle, subsequent encounter for fracture with malunion
6. S42.001S Unspecified part of right clavicle, sequalae
7. S42.002A Unspecified part of left clavicle, initial encounter for closed fracture
8. S42.002D Unspecified part of left clavicle, subsequent encounter for fracture with routine healing
9. S42.002G Unspecified part of left clavicle, subsequent encounter for fracture with delayed healing
10. S42.002K Unspecified part of left clavicle, subsequent encounter for fracture with nonunion
11. S42.002P Unspecified part of left clavicle, subsequent encounter for fracture with malunion
12. S42.002S Unspecified part of left clavicle, sequalae
13. S42.009A Unspecified part of unspecified clavicle, initial encounter for closed fracture
14. S42.009D Unspecified part of unspecified clavicle, subsequent encounter for fracture with routine healing
15. S42.009G Unspecified part of unspecified clavicle, subsequent encounter for fracture with delayed healing
16. S42.009K Unspecified part of unspecified clavicle, subsequent encounter for fracture with nonunion
17. S42.009P Unspecified part of unspecified clavicle, subsequent encounter for fracture with malunion
18. S42.009S Unspecified part of unspecified clavicle, sequalae
19. S42.011A Anterior displaced fracture of sternal end of right clavicle, initial encounter for closed fracture
20. S42.011D Anterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with routine healing
21. S42.011G Anterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with delayed healing
22. S42.011K Anterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with nonunion
23. S42.011P Anterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with malunion
24. S42.011S Anterior displaced fracture of sternal end of right clavicle, sequalae
25. S42.012A Anterior displaced fracture of sternal end of left clavicle, initial encounter for closed fracture
26. S42.012D Anterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with routine healing
27. S42.012G Anterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with delayed healing
28. S42.012K Anterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with nonunion
29. S42.012P Anterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with malunion
30. S42.012S Anterior displaced fracture of sternal end of left clavicle, sequalae
31. S42.013A Anterior displaced fracture of sternal end of unspecified clavicle, initial encounter for closed fracture
32. S42.013D Anterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with routine healing
33. S42.013G Anterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with delayed healing
34. S42.013K Anterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with nonunion
35. S42.013P Anterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with malunion
36. S42.013S Anterior displaced fracture of sternal end of unspecified clavicle, sequalae
37. S42.014A Posterior displaced fracture of sternal end of right clavicle, initial encounter for closed fracture
38. S42.014D Posterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with routine healing
39. S42.014G Posterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with delayed healing
40. S42.014K Posterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with nonunion
41. S42.014P Posterior displaced fracture of sternal end of right clavicle, subsequent encounter for fracture with malunion
42. S42.014S Posterior displaced fracture of sternal end of right clavicle, sequalae
43. S42.015A Posterior displaced fracture of sternal end of left clavicle, initial encounter for closed fracture
44. S42.015D Posterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with routine healing
45. S42.015G Posterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with delayed healing
46. S42.015K Posterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with nonunion
47. S42.015P Posterior displaced fracture of sternal end of left clavicle, subsequent encounter for fracture with malunion
48. S42.015S Posterior displaced fracture of sternal end of left clavicle, sequalae
49. S42.016A Posterior displaced fracture of sternal end of unspecified clavicle, initial encounter for closed fracture
50. S42.016D Posterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with routine healing
51. S42.016G Posterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with delayed healing
52. S42.016K Posterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with nonunion
53. S42.016P Posterior displaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with malunion
54. S42.016S Posterior displaced fracture of sternal end of unspecified clavicle, sequalae
55. S42.017A Nondisplaced fracture of sternal end of right clavicle, initial encounter for closed fracture
56. S42.017D Nondisplaced fracture of sternal end of right clavicle, subsequent encounter for fracture with routine healing
57. S42.017G Nondisplaced fracture of sternal end of right clavicle, subsequent encounter for fracture with delayed healing
58. S42.017K Nondisplaced fracture of sternal end of right clavicle, subsequent encounter for fracture with nonunion
59. S42.017P Nondisplaced fracture of sternal end of right clavicle, subsequent encounter for fracture with malunion
60. S42.017S Nondisplaced fracture of sternal end of right clavicle, sequalae
61. S42.018A Nondisplaced fracture of sternal end of left clavicle, initial encounter for closed fracture
62. S42.018D Nondisplaced fracture of sternal end of left clavicle, subsequent encounter for fracture with routine healing
63. S42.018G Nondisplaced fracture of sternal end of left clavicle, subsequent encounter for fracture with delayed healing
64. S42.018K Nondisplaced fracture of sternal end of left clavicle, subsequent encounter for fracture with nonunion
65. S42.018P Nondisplaced fracture of sternal end of left clavicle, subsequent encounter for fracture with malunion
66. S42.018S Nondisplaced fracture of sternal end of left clavicle, sequalae
67. S42.019A Nondisplaced fracture of sternal end of unspecified clavicle, initial encounter for closed fracture
68. S42.019D Nondisplaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with routine healing
69. S42.019G Nondisplaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with delayed healing
70. S42.019K Nondisplaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with nonunion
71. S42.019P Nondisplaced fracture of sternal end of unspecified clavicle, subsequent encounter for fracture with malunion
72. S42.019S Nondisplaced fracture of sternal end of unspecified clavicle, sequalae
73. S42.021A Displaced fracture of shaft of right clavicle, initial encounter for closed fracture
74. S42.021D Displaced fracture of shaft of right clavicle, subsequent encounter for fracture with routine healing
75. S42.021G Displaced fracture of shaft of right clavicle, subsequent encounter for fracture with delayed healing
76. S42.021K Displaced fracture of shaft of right clavicle, subsequent encounter for fracture with nonunion
77. S42.021P Displaced fracture of shaft of right clavicle, subsequent encounter for fracture with malunion
78. S42.021S Displaced fracture of shaft of right clavicle, sequalae
79. S42.022A Displaced fracture of shaft of left clavicle, initial encounter for closed fracture
80. S42.022D Displaced fracture of shaft of left clavicle, subsequent encounter for fracture with routine healing
81. S42.022G Displaced fracture of shaft of left clavicle, subsequent encounter for fracture with delayed healing
82. S42.022K Displaced fracture of shaft of left clavicle, subsequent encounter for fracture with nonunion
83. S42.022P Displaced fracture of shaft of left clavicle, subsequent encounter for fracture with malunion
84. S42.022S Displaced fracture of shaft of left clavicle, sequalae
85. S42.023A Displaced fracture of shaft of unspecified clavicle, initial encounter for closed fracture
86. S42.023D Displaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with routine healing
87. S42.023G Displaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with delayed healing
88. S42.023K Displaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with nonunion
89. S42.023P Displaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with malunion
90. S42.023S Displaced fracture of shaft of unspecified clavicle, sequalae
91. S42.024A Nondisplaced fracture of shaft of right clavicle, initial encounter for closed fracture
92. S42.024D Nondisplaced fracture of shaft of right clavicle, subsequent encounter for fracture with routine healing
93. S42.024G Nondisplaced fracture of shaft of right clavicle, subsequent encounter for fracture with delayed healing
94. S42.024K Nondisplaced fracture of shaft of right clavicle, subsequent encounter for fracture with nonunion
95. S42.024P Nondisplaced fracture of shaft of right clavicle, subsequent encounter for fracture with malunion
96. S42.024S Nondisplaced fracture of shaft of right clavicle, sequalae
97. S42.025A Nondisplaced fracture of shaft of left clavicle, initial encounter for closed fracture
98. S42.025D Nondisplaced fracture of shaft of left clavicle, subsequent encounter for fracture with routine healing
99. S42.025G Nondisplaced fracture of shaft of left clavicle, subsequent encounter for fracture with delayed healing
100. S42.025K Nondisplaced fracture of shaft of left clavicle, subsequent encounter for fracture with nonunion
101. S42.025P Nondisplaced fracture of shaft of left clavicle, subsequent encounter for fracture with malunion
102. S42.025S Nondisplaced fracture of shaft of left clavicle, sequalae
103. S42.026A Nondisplaced fracture of shaft of unspecified clavicle, initial encounter for closed fracture
104. S42.026D Nondisplaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with routine healing
105. S42.026G Nondisplaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with delayed healing
106. S42.026K Nondisplaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with nonunion
107. S42.026P Nondisplaced fracture of shaft of unspecified clavicle, subsequent encounter for fracture with malunion
108. S42.026S Nondisplaced fracture of shaft of unspecified clavicle, sequalae
109. S42.031A Displaced fracture of lateral end of right clavicle, initial encounter for closed fracture
110. S42.031D Displaced fracture of lateral end of right clavicle, subsequent encounter for fracture with routine healing
111. S42.031G Displaced fracture of lateral end of right clavicle, subsequent encounter for fracture with delayed healing
112. S42.031K Displaced fracture of lateral end of right clavicle, subsequent encounter for fracture with nonunion
113. S42.031P Displaced fracture of lateral end of right clavicle, subsequent encounter for fracture with malunion
114. S42.031S Displaced fracture of lateral end of right clavicle, sequalae
115. S42.032A Displaced fracture of lateral end of left clavicle, initial encounter for closed fracture
116. S42.032D Displaced fracture of lateral end of left clavicle, subsequent encounter for fracture with routine healing
117. S42.032G Displaced fracture of lateral end of left clavicle, subsequent encounter for fracture with delayed healing
118. S42.032K Displaced fracture of lateral end of left clavicle, subsequent encounter for fracture with nonunion
119. S42.032P Displaced fracture of lateral end of left clavicle, subsequent encounter for fracture with malunion
120. S42.032S Displaced fracture of lateral end of left clavicle, sequalae
121. S42.033A Displaced fracture of lateral end of unspecified clavicle, initial encounter for closed fracture
122. S42.033D Displaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with routine healing
123. S42.033G Displaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with delayed healing
124. S42.033K Displaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with nonunion
125. S42.033P Displaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with malunion
126. S42.033S Displaced fracture of lateral end of unspecified clavicle, sequalae
127. S42.034A Nondisplaced fracture of lateral end of right clavicle, initial encounter for closed fracture
128. S42.034D Nondisplaced fracture of lateral end of right clavicle, subsequent encounter for fracture with routine healing
129. S42.034G Nondisplaced fracture of lateral end of right clavicle, subsequent encounter for fracture with delayed healing
130. S42.034K Nondisplaced fracture of lateral end of right clavicle, subsequent encounter for fracture with nonunion
131. S42.034P Nondisplaced fracture of lateral end of right clavicle, subsequent encounter for fracture with malunion
132. S42.034S Nondisplaced fracture of lateral end of right clavicle, sequalae
133. S42.035A Nondisplaced fracture of lateral end of left clavicle, initial encounter for closed fracture
134. S42.035D Nondisplaced fracture of lateral end of left clavicle, subsequent encounter for fracture with routine healing
135. S42.035G Nondisplaced fracture of lateral end of left clavicle, subsequent encounter for fracture with delayed healing
136. S42.035K Nondisplaced fracture of lateral end of left clavicle, subsequent encounter for fracture with nonunion
137. S42.035P Nondisplaced fracture of lateral end of left clavicle, subsequent encounter for fracture with malunion
138. S42.035S Nondisplaced fracture of lateral end of left clavicle, sequalae
139. S42.036A Nondisplaced fracture of lateral end of unspecified clavicle, initial encounter for closed fracture
140. S42.036D Nondisplaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with routine healing
141. S42.036G Nondisplaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with delayed healing
142. S42.036K Nondisplaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with nonunion
143. S42.036P Nondisplaced fracture of lateral end of unspecified clavicle, subsequent encounter for fracture with malunion
144. S42.036S Nondisplaced fracture of lateral end of unspecified clavicle, sequalae

More On Diagnostic Precision

We say that a diagnosis of disease A is more precise than a diagnosis of disease B if disease A is a subtype of disease B. For example, a diagnosis of coronary artery disease is more precise than a diagnosis of heart disease, and a diagnosis of stenosis of the left anterior descending coronary artery is more precise than a diagnosis of coronary artery disease.

One big reason that ICD-10-CM proponents want to switch from ICD-9-CM is that the disease classes of ICD-9-CM are often not at a sufficient level of diagnostic precision to support many "secondary" uses of health care data, such as rewarding doctors and hospitals for improving quality of care, medical research, chronic disease management, and so on.

For sure, ICD-9-CM is not sufficient for patient care, because to treat patients you need to record the individual diseases, not the classes into which they go.

Because ICD-10-CM is also a classification of diseases, as opposed to a set of codes for individual diseases, it is likely that even with ICD-10-CM, we will still be wanting for increased diagnostic precision. Again, for patient care we need to code individual diseases, not disease classes. Thus, no disease classification will ever be sufficient for patient care.

However, already there are even secondary uses of health care data that require higher diagnostic precision than that provided by ICD-10-CM.

At least one researcher wants to study patients with type 1a diabetes mellitus, and thus wishes to exclude patients with type 1b diabetes mellitus from the study. However, ICD-10-CM does not provide codes for these two subtypes of type 1 diabetes mellitus. This researcher will not be helped by ICD-10-CM, but will still have to test all patients with type 1 diabetes mellitus to determine which subtype they have.

We need a disease-coding system, not a disease-classification coding system. We should not switch to ICD-10-CM.

Decoupling Disease Coding from Disease Classification

We have hinted at a proposed alternative to ICD-10-CM for coding diagnoses: each diagnosis should receive its own code. Or, to be more specific, since a diagnosis is a conclusion about what disease a patient has, each disease should receive its own code.

In a prior post, we pointed out that ICD-10-CM is a disease classification, and thus the two diseases typhoid endocarditis and typhoid myocarditis both get the same code A01.02, which is really the code for the class of diseases called typhoid fever with heart involvement.

Instead, we propose that all three diseases get a code. Typhoid fever with heart involvement (perhaps inflammation of heart tissue due to typhoid fever is a better term) should also get a code in case the doctor doesn't yet know whether the myocardium or endocardium is affected, so she can still assign a disease code to the patient prior to having full knowledge.

These three diagnoses are at different levels of precision: typhoid endocarditis is a more precise diagnosis, and typhoid fever with heart involvement is a less precise diagnosis. It is the nature of medicine that as doctors gather more information through interviewing, examining, testing, and assessing the response of a patient to treatment or watchful waiting, they are able to improve the precision of their diagnosis.

For example, the doctor may diagnose pharyngitis and then, when she gets the results of a culture two days later, improve the precision of the diagnosis to Streptococcal pharyngitis (that is, if the culture grows a type of bacterium called Streptococcus. If the culture does not grow any bacteria, then the precision of her diagnosis does not change significantly).

Proponents of ICD-10-CM usually refer to increased precision of diagnoses as improved "specificity" or increased "detail". However, in the medical field, the word "specificity" has another, more-commonly used, mathematical meaning. So it is best to avoid its use altogether in this discussion.

We have already pointed out that much of the alleged, improved precision in ICD-10-CM is not improved diagnostic precision at all, but rather just combinations of diseases, their manifestations, and other information about the patient and their encounters with the healthcare system (as opposed to other information about disease itself). Thus, although ICD-10-CM has 290 codes for diabetes mellitus, these codes do not represent different types of diabetes mellitus at different levels of diagnostic precision.

Doctors should simply code each disease at the highest level of diagnostic precision possible at the time. As they acquire new information that improves that level of precision, they should update the disease code.

Doctors should NOT classify the disease according to complex rules and inclusion and exclusion criteria, then assign the code for that class of diseases. Especially when the particular classification of diseases--ICD-9-CM or ICD-10-CM--is not intended for helping doctors care for patients, but rather for helping researchers, policy makers, and insurance companies analyze patient data for other purposes.

Instead, those who need to classify disease for research, infectious disease surveillance, setting health care policy, improving health care quality, and so on, should take the disease codes that physicians assign (for the purposes of patient care) and classify those disease codes as they see fit for their unique purposes. We doubt that a single disease classification such as ICD-10-CM can meet all those so-called secondary uses of data, anyway.

Allowing physicians and other providers to code each disease individually has the following benefits:

1. Health care providers (hospitals, doctors, etc.) never have to change coding systems, they will always use the individual disease coding system.

2. Those entities who need to organize patient data by classes of disease can organize diseases into whatever classes they need. If they need new classes of disease, they can simply re-organize the disease codes into new classes as needed.

3. No one will need to propose or be burdened by expensive, complicated, far-reaching upgrades to a one-size-fits-all, complicated, poorly designed, and technically obsolete diagnosis classification.

ICD-10-CM and the Physician's Superbill

No, a superbill is not a bill that includes extravagant costs for a lousy bedside manner. Nor is it a proposed law in Congress that has merit.

A superbill is a form (usually on paper) that a physician uses at the end of every visit to mark all the billing codes she feels apply to that visit. Thus, for the numerous physicians who use a superbill, it is the link between clinical care and reimbursement.

A superbill typically contains a small subset of Current Procedural Terminology (CPT) codes and ICD-9-CM codes: usually those codes for which the physician bills most frequently. Without going into too much detail, the CPT code bills for the services the physician provided at the visit. The most typical codes are the so-called "evaluation and management" or E&M codes. In essence, the more complicated (and thus usually the longer) the visit, the more the physician gets paid.

The superbill also contains a small subset of ICD-9-CM codes to allow the physician to "check off" easily the diagnosis codes relevant to that visit. Thus, given that the most common chronic conditions that result in visits to primary-care physicians are hypertension, arthritis, diabetes mellitus, and depression, your PCP's superbill (assuming she uses one) has the ICD-9-CM codes for these diagnoses (as well as others).

In fact, your PCP's superbill may be derived from a superbill template (warning: pdf) produced by the American Academy of Family Physicians.

So, how will the switch to ICD-10-CM affect the superbill?

Well, the American Academy of Professional Coders (AAPC) recently issued a comparison between the ICD-9-CM superbill and what its ICD-10-CM equivalent would look like. The ICD-10-CM superbill (pdf) is a whopping 9 pages long, as opposed to its ICD-9-CM counterpart (pdf), which is 2 pages long.

The main reason the ICD-10-CM superbill is so long is the problem with combination codes we talked about in an earlier post. Now, instead of a single code for infectious mononucleosis, the superbill has 16 codes, mostly based on whether various complications are present (instead of just listing the complications by themselves with their own codes). Rheumatoid arthritis explodes from one code to approximately 90 codes: from one line to one page!

ICD-10-CM in this respect is worse than ICD-9-CM.

ICD-10-CM and Word Processing

We noted in one of our first posts that the National Center for Health Statistics releases ICD-10-CM as a 23 MB portable document format document (click here to view it). And we noted that ICD-10-CM therefore fails to meet a fundamental requirement for a modern diagnosis coding system, namely that we can use it in our computer systems directly (which would require at the very least some machine-processable text file such as comma-separated value or tab-delimited text, instead of a file format meant for humans to read or print).

We have learned that in fact, the NCHS uses a word processor to create and maintain ICD-10-CM. The following quote is from a presentation that Dr. Chris Chute gave as part of a seminar series of the National Center for Biomedical Ontology:

...the American 10 clinical modification will migrate to the tools that we're using to build ICD-11, benefiting from a better environment. They're using a word processor now...kind of pathetic actually...

We agree, that is pathetic. To hear it yourself, go to a point approximately 32 minutes into the presentation and listen from there.

So, if modern tools exist now for creation and ongoing maintenance of the next version of ICD, why is NCHS still using a word processor?

Dr. Chute does go on to say that NCHS will migrate to these tools and ICD-10-CM will "evolve to become identical to ICD-11". But not until after 2015, when ICD-11 is finalized.

So, for the next 7 years at least, NCHS will continue to maintain ICD-10-CM with a word processor, and release it as a giant text blob from which one cannot automatically and reliably extract the set of codes it contains for use in a database or spreadsheet.

Thus, we have additional evidence that ICD-10-CM is based on archaic practices and technology. And $11 billion or more to upgrade to something archaic is a waste of money.

An Even More Costly Prerequisite

In our last post, we mentioned that a standard called 5010 must be in place before ICD-10-CM. The reason is that 5010 replaces a standard that cannot accommodate ICD-10-CM.

5010 is a standard for submitting health care insurance claims.

First, a word about health care insurance. If you have health insurance and receive care from a doctor and/or a hospital, they submit a claim on your behalf to your insurance company. The insurance company pays the doctor and/or hospital directly for the services they provided. You are spared the hassle of receiving a bill, submitting a claim to the insurance company yourself, receiving the check in the mail, then sending it to the doctor and/or hospital to pay the bill. The doctor and hospital benefit as well, since they receive their payment in a more direct, timely, and reliable manner.

This description simplifies things quite a bit. But it and the fact that doctors and hospitals must put billing diagnoses on the claim form is sufficient to explain the need for 5010.

The whole process is even more efficient if doctors and hospitals submit claims electronically from their computer to the insurance company's computer. Because there are over 100,000 physician practices and hundreds of insurance companies--all of whom use computer systems from hundreds of software companies, the process of submitting claims electronically is made even simpler if all these entities use a standard electronic claim form. Any doctor or hospital using any standard-compliant computer system can submit a claim to any insurance company also using a standard-compliant system.

Today, this standard is 4010A. A law passed by the U.S. Congress in 1996 (called the Health Insurance Portability and Accountability Act) gave the Department of Health and Human Services (HHS) the power to mandate that all claims submitted electronically by organizations "covered" by this law (and nearly every doctor and hospital is "covered") use this standard. And HHS did so. And the health care system had to comply.

All told, implementation of 4010A cost the health care industry an estimated $28 billion. Yes, billion with a 'b'. And that's not our estimate, it's the estimate of HHS. Who has a bias towards underestimating the impact of their regulations on the industry so they can keep imposing more regulations. In their impact analysis on the rule to adopt 4010, HHS states: ...Although we cannot determine the specific economic impact of the standards being proposed in this rule
(and individually each standard may not have a significant impact), the overall impact analysis makes clear that, collectively, all the standards will have a significant impact of over $100 million on the economy. $100 million?

Well, 5010 is an 'upgrade' to 4010A. And to use ICD-10-CM as a coding system for billing diagnoses on claim forms, it is a requirement to upgrade to 5010.

Why can't we use ICD-10-CM codes on 4010A?

Because the 4010A form has a limited-length field for diagnosis codes. It limits the length of diagnosis codes to a maximum of 5 digits (warning: pdf, and see page 10 for the limit), the maximum length of an ICD-9-CM code. Why didn't the designers of 4010A allow for longer field lengths, knowing that HHS and others were anticipating an upgrade to ICD-9-CM? We don't know.

However, the maximum length of an ICD-10-CM code is 7 digits. So, there must be a change to the standard electronic claims form or we can't use ICD-10-CM. And that change is 5010, which fixes a number of deficiencies of 4010 in addition to the limit on diagnosis codes.

Which finally brings us to the cost. How much will it cost the industry to upgrade from 4010A to 5010?

By HHS' own estimate in the Notice of Proposed Rulemaking (NPRM) for 5010 (a different NPRM from the one mandating the upgrade to ICD-10-CM), it will cost anywhere from $5.6 to $11.2 billion (yes, with a 'b' again).

Here is a breakdown of the costs to the industry of adopting 4010A and HHS' estimates of the costs for upgrading to 5010 (numbers represent millions of dollars):

Type of organization	Cost to implement 4010A	Low 5010 estimate	High 5010 estimate
Hospitals	4,661	932	1,864
Physicians	2,175	435	870
Dentists	1,493	299	598
Pharmacy	336	95*	183*
Private plans	18,021	3,604	7,209
Gov’t plans	1,202	252	481
Clearinghouses	125	37	45
TOTAL	28,013	5,654	11,250

*Includes conversion to 5010 and another standard called D.0

We agree that it is reasonable to conclude that, because 4010A was the first time the industry implemented a standard electronic claims form, the cost of an upgrade to 5010 will be lower than the costs of adopting 4010A in the first place.

However, is it reasonable to assume a 60-80% reduction in costs?

Well, the Blue Cross and Blue Shield Association has identified approximately 850 complex changes that 5010 makes to 4010A. They also note (warning: ppt) that 5010 is a suite of standards for nine types of electronic claims transactions, and that a 5010 implementation guide for just one of the nine transactions is 700 pages long, with at least one modification made on every single page.

A reasonable estimate for a more modest, first upgrade is probably a 50% reduction.

But a 60-80% reduction for an aggressive, complex upgrade? We don't think so.

The update to 5010 will most likely cost the industry well over $10 billion. Even if the cost of an electronic medical record (EMR) were $100,000 per physician, $10 billion is enough to equip 100,000 physicians with one.

Thus, the prerequisite to ICD-10-CM is over $10 billion and ICD-10-CM itself will cost approximately $1 billion or more to implement, for a total of >=$11 billion to upgrade our diagnosis coding system in the United States.

If we're going to spend that much money upgrading our diagnosis coding system, shouldn't it be state of the art?

HHS Ignores Advice It Asked For

In the Notice of Proposed Rulemaking or NPRM (warning: pdf) to mandate a switch to ICD-10-CM from ICD-9-CM for classifying diagnoses, the Department of Health and Human Services (HHS) mentions, on page number 49802 (the rule is in the Federal Register), that the Workgroup on Electronic Data Interchange (WEDI) sent the Secretary of HHS a letter on May 31, 2006.

The mention of this letter is significant because:

1. HHS is required by law to consult with WEDI on adoption of new code sets.
2. WEDI held a forum in April of 2006 to determine when and how to adopt ICD-10-CM.
3. The rule makes no mention of the recommendations of this letter.
4. The rule makes recommendations that directly conflict with the recommendations in the letter.

Perhaps Congress requires HHS to consult with WEDI because it recognizes that bureaucrats are wont to run roughshod over industry. If so, the NPRM is a good example of just such bureaucratic tendencies.

The official letter that WEDI sent to the Secretary of HHS is not available publicly: one must have a login to the WEDI web site to access it. Nevertheless, there are two publicly available documents that summarize the recommendations:

1. Co-Chair Report on ICD-10 Forum Discussion (warning: pdf)
2. WEDI ICD 10 Forum Recommendation to HHS Final Draft (warning: pdf)

We don't know if the latter truly represents the version that WEDI sent to the Secretary. For one thing, it does not even have a date.

However, the key recommendations from both documents are the same, and they are clear.

One recommendation that HHS blatantly ignores in its NPRM (it does not even mention the recommendation, let alone try to rebut it), is that implementation of another standard--known as 5010--should occur first. The NPRM requires that the industry adopt 5010 and ICD-10-CM concurrently, but that 5010 is required by April 1, 2010 and ICD-10-CM is not required until October 1, 2011.

Now it may seem that 5010 precedes ICD-10-CM. However, to meet those deadlines, the industry will have to start working on both standards now, and thus work on them concurrently.

The WEDI recommendation clearly states: This upgrade [to 5010] is too significant to be done in conjunction with ICD-10-CM and ICD-10-PCS conversion.

No wonder HHS doesn't mention this recommendation in the NPRM. It is too inconvenient. And it is too compelling to confront directly.

In a story about the effect of implementing 5010, the Blue Cross and Blue Shield Association notes that 5010 makes 850 complex changes to its predecessor standard.

Also, in 2007 WEDI and the North Carolina Healthcare Information and Communications Alliance (NCHICA) developed a detailed project plan that outlines all the steps the industry must take and milestones it must meet to adopt 5010. They derived a date of 2014 for final implementation of 5010 without ICD-10.

Yet HHS wants to adopt 5010 and ICD-10-CM by 2011?

WEDI is holding a policy advisory group forum from September 9-11 (just after this post) to address the ramifications of the NPRM on 5010 and ICD-10-CM. Let's hope they take HHS to task for ignoring the advice they gave it--advice that HHS by law is required to take into account.