The Nuts and Bolts of ICD-10-CM

A look at the systems and processes most affected and how to prepare your practice

It is now only 37 months before ICD-10-CM becomes a reality. There’s much to do before October 1, 2013, but implementation can be a smooth transition if you take a systematic approach. There are many elements that need to be addressed, but preparing your practice in a step-by-step fashion can keep the transition from becoming overwhelming.

Planning and implementing ICD-10-CM must include communication and significant collaboration on information technology, finance, education, and problem solving. The work necessary to implement ICD-10-CM and the resources required will depend on the size of the practice. A large practice may need to recruit key people from many different departments and areas of the practice to assist with the transition; a small practice might enlist only one or two staff members to assist in the transition.

Version 5010

The transition to Version 5010 of the Electronic Data Transactions (EDI) must be made no later than January 1, 2012 — prior to ICD-10-CM implementation. Version 5010 must be implemented because Version 4010A cannot accommodate the expansion of the code sets that include ICD-10-CM and ICD-10-PCS. You will not be able to send claims or receive reimbursement without the 5010 conversion.

You’ll need the help of your software vendors to make this transition. My advice is to contact them now because level I testing (the vendor’s internal testing) also should be happening now. Make sure the software conversion occurs prior to January 1, 2012, in case there are problems with the conversion that must be fixed prior to the “drop dead” date.

Organize implementation

Every practice needs to assign a project team or key person to organize and manage the implementation effort. If you have several people in your practice involved in the ICD-10 transition, form a team and assign projects with completion dates during each step of the process. The transition team or key person is responsible for the initial planning process.

Include at least one physician in the implementation process, as well as your management and coding staff. It’s important to have the physicians involved so they understand the importance of preparation as the transition occurs. Ask the project team to provide periodic progress reports so everyone is aware of the progress, problems, and barriers to implementation in your practice.

After leadership roles have been identified, it’s time to get to work. The first step is preparing a project summary, including an overview description of the regulation, changes to the code set, the anticipated scope of work that needs to be accomplished, and anticipated internal and external work processes. For larger practices this could mean reading the ICD-10 final rule; for smaller practices this could mean reading materials prepared by a professional society. The project summary, along with an outline of project steps, will serve as the roadmap for completing the implementation. This summary should be shared with the physicians in your practice.

Impact analysis

A preliminary impact analysis is a good tool for assessing which areas of your practice may be affected most in the early stages of ICD-10-CM implementation. After the analysis is complete, the project team can develop a budget for ICD-10-CM implementation. Vulnerable areas may include:

  • Information systems
  • Documentation
  • Staff education needs
  • Clinical and administrative areas

This information must be shared with the providers so they understand the depth of the changes. It is important in this planning stage to identify who in the medical practice or organization has decision making authority.

Information systems

Conducting a system audit for ICD-10-CM compatibility is part of the impact assessment. Start by performing a comprehensive audit of all data systems currently using ICD-9-CM, and then analyze the systems that will use ICD-10-CM. Your analysis should answer the following questions:

  • How are ICD-9-CM codes currently used in information systems?
  • Which vendor software applications are being used?
  • How are codes entered? Are they manually entered or imported from another system or software?
  • Can the system handle alphanumeric structure? It must be able to.
  • Can the codes, code descriptions, and supported documentation be obtained in a machine-readable format?
  • Does the code format include a decimal?
  • Can the current system house both ICD-9-CM and ICD-10-CM codes simultaneously?
  • How is the quality of data checked?
  • How do the systems interface?

After you perform a comprehensive audit of the IT systems, perform an analysis of necessary changes to be implemented for the transition to ICD-10-CM. Identify which forms and reports will need to be reformatted or revised. Evaluate whether each system’s storage capacity is sufficient to support both ICD-9-CM and ICD-10-CM during the transition, or if the capacity will need to be increased. Also consider how long ICD-9-CM will be accessible, which staff will need to access ICD-9-CM, and how long the legacy data will need to be available.

System vendors

Contact system vendors during this phase to determine whether they can support legacy and new coding systems, and for how long. This is an ideal time to identify costs for upgrading software and storage capacity, as well as contract issues with the vendor.  Other potential vendor costs may include hardware upgrades, customization, staffing, and overtime.

Determine if upgrades are included in the current contract or if there will be additional costs to upgrade. Coordinate with the vendor to create the timeline for testing and installation of the new or upgraded software or system. Other IT system considerations might include a conversion to an EHR during this transition, if the organization hasn’t previously converted.


Because ICD-10-CM is more robust (with up to seven digits of specificity), assess whether documentation currently in your medical records will support the level of specificity necessary for ICD-10-CM.

The organization should have an experienced auditor conduct audits either internally or externally. Random samples should be evaluated and various types of medical records should be reviewed. A clinical documentation assessment tool should be used to conduct this audit to be sure current documentation adequately supports ICD-10.

When an audit has been conducted and analyzed, the practice will have a good assessment of any deficiencies, and can develop a priority list of diagnoses requiring more detail. The audit also helps identify providers who will benefit from focused training using ICD-10-CM.

Coding and billing education

Everyone in the medical practice will need some form of training. Physicians, nonphysician providers (NPPs), coders, and billing staff will need more extensive training than ancillary staff (nurses, MAs, managers, etc.).

Questions to ask:

  • How much training on ICD-10-CM will be necessary?
  • How many training days will be required?
  • Will there be lost revenue if the practitioners need to be out of the office for training?
  • How will productivity be affected?
  • How much training does each staff person need?

Some studies indicate that less than 16 hours of training is necessary on ICD-10-CM. The reality is that physicians will need approximately 16 to 20 hours of training, coders will need 40 to 60 hours of training, and other staff might need approximately six to 10 hours of training.


Because reimbursement is tied to procedural and diagnosis coding, your practice’s finances will be affected greatly by the transition. For example, after the implementation date, if an insurance carrier cannot accept ICD-10-CM codes, your practice probably will not be paid by that insurer. Make sure you know which of your payers have fully transitioned to ICD-10-CM and which have not, so you can do your billing accordingly to ensure you get paid.

Review the current reporting for procedures and services using ICD-9-CM and compare them to ICD-10-CM codes. Professional services are paid based on the procedure code, but the diagnosis code supports medical necessity — the driving factor in payment for all medical procedures and services.

Reports tied to diagnosis codes, such as the accounts receivable analysis, pending claims reports, analysis by provider type, and collection reports also will be affected. Assess which reports will be affected by the ICD-10-CM transition and what changes will need to be made.

Post implementation

The impact of the ICD-10-CM transition on your practice will not end on the October 1, 2013. Pended or denied claims are expensive, and generally are dealt with through a manual process. Any increase in the number of claims not processed or paid will first decrease provider cash flow, then increase both provider workload and plan workload to process the denials. To reduce the risk of reduced cash flow, providers and staff need to know and understand the changes in documentation and coverage requirements well ahead of time to adapt in time for implementation.

It is a fact that people’s productivity decreases short term when they are in training or learning a new skill. These slowdowns result in loss of productivity, including charge capture and reimbursement, and can affect the financial health of a practice. Anticipate a decrease in productivity by measuring and analyzing the impact of the transition prior to beginning the training process. Planning ahead also allows you to try a staggered training approach, where one group of providers and staff is trained at a time, helping to limit the impact on productivity.

Analyzing all areas affected by ICD-10-CM and making operational changes within your practice to accommodate the new code set will ensure a smoother transition to ICD-10-CM. Thirty-seven months may seem like a long time away, but successful implementation depends on planning ahead and allowing time for resolving issues with vendors, equipment, documentation, and training. Getting started now means less stress later in the process.

By Deborah Grider

Copyright© 2010 by UBM Medica. All rights reserved. Republication or redistribution of Physicians Practicecontent, including by framing, is prohibited without prior written consent. Physicians Practiceshall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.