ICD-10 Diagnosis Codes & Procedure Codes

As your company plans the move from ICD-9 to ICD-10, now is a good time to examine whether you are planning for proper use of procedure codes.   ICD-9 based claims may or may not contain this data.  If you work with a health care provider and in particular a hospital, consider the possibility that providers will be required by payers on an increasing basis to include procedure codes on all claims in the future.  If you are a health care payer, these procedure codes and the analytics can help provide better information on reimbursement levels.   For both entities, procedure codes will impact contract renegotiations in the future.

One reason for this is that ICD-9-CM in some cases has a “not otherwise specified” (NOS) coding option. NOS options in ICD-10-PCS are restricted. A minimal level of specificity is required for each part  of a procedure.

The ICD-10 Procedure Coding System (ICD-10-PCS) succeeds Volume 3 of ICD-9-CM.  The new coding system uses 7 alpha or numeric digits while ICD-9-CM  uses 3 or 4 numeric digits. ICD-9 is over 30 years old and does not use current terminology or provide enough detail on the in patient’s medical condition or procedures performed.  We have heard from some companies that they believe that the move to ICD-10 will be easy because they will simply ask IT to lengthen the size of the fields which contain this data.  Unfortunately it isn’t that easy.

At times, an ICD-10 assessment by a knowledgeable third party can encourage different teams to improve communication and discover hidden assets that are under utilized.  It may very well be that valuable procedure code data is contained in the raw EDI files your company sends or receives, but it may not be stored or used for analysis.  Maximizing the use and analysis of existing data can strengthen your organizations’ planning and have a favorable revenue impact.

Indeed, payers should start requiring procedure codes and diagnosis codes on hospital claims to validate exactly what they are paying for.  We recommend to our clients that they begin a study to collect and analyze procedure code data from hospitals, and develop alternative reimbursement models based on ICD-10 codes, CPT, DRGs,etc.

Michael F. Arrigo

Michael Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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