ICD-10 Software Selection for Health Care Coding

The software selection process has two main components:

1. Create a list of candidate vendors (the long list) then send a request for further information.

2. Select the best suited (short list) and then get detail on any gaps in the software vendor solution compared to the identified requirements in a request for proposal (RFP).

* Define needs and selection criteria

* Create long list

* Create the request for proposal

* Evaluate responses

* Create short list

Usually subject matter expertise in the solution area is helpful.  We work with clients in financial services, eCommere, Learning Management Systems, CRM, Talent Management, and especially health care these days to find the right solution.

One of the recent developments in my opinion is that opportunists have arrived in the health information management business, offering quick fixes to problems that just aren’t.  One case in point is ICD-10, a new standard that requires every HIPAA Covered Entity including all health insurance firms (health plan or payor), as well as health care providers (hospital, lab, billing company and physician) to change the way they enter both diagnosis AND procedure codes.

The change from ICD-9 to ICD-10 represents more than just a change in coding, it involves a new reimbursement paradigm.  Some software vendors offer simple cross references or “cross walks” and others use a similar approach called a GEM or “general equivalence map.”  It turns out that neither of these are going to be a good fit because ICD-10 involves going from less detail to more.  Going the other way isn’t really practical. Crosswalks combined with good old rolling up the sleeves and expertise will work, and a tool might help if it isn’t viewed as a panacea.

For example, Diabetes Mellitus in ICD-9 might be,

“250.X, where:

4th digit identities type of complication
5th digit “1” identified juvenile-onset
5th digit “0” identified adult-onset

And if we want to be more specific in ICD-10 it might look like this:

E10.X Insulin-dependent
E11.X Non-insulin dependent
E12 Malnutrition-related
E13 Other specified
E14 Unspecified4th digit for type of complication

Or it might be:

E08 Diabetes due to underlying condition
E09 Drug or chemical induced diabetes
E10 Type 1 diabetes E11 Type 2 diabetes E13 Other specified diabetes mellitus
E14 Unspecified4th digit identifies type of complication5/6th digit for type of complication

Here’s the issue:

Diabetes mellitus codes expanded to include the classification of the diabetes and the manifestation.

The category for diabetes mellitus has been updated to reflect the current clinical classification of diabetes

There are things that are no longer classified as controlled / uncontrolled:

E08.22, Diabetes mellitus due to an underlying condition with diabetic chronic kidney disease
E09.52, Drug or chemical induced diabetes mellitus with diabetic peripheral angiopathy with gangrene
E10.11, Type 1 diabetes mellitus with ketoacidosis with coma
E11.41, Type 2 diabetes mellitus with diabetic mononeuropathy

Now, how are we going to mitigate all of this this with a tool? Some vendors claim that insurance companies can take in an ICD-10 code, not make changes to their back office claims systems for new procedure codes, and pay on the old codes.While short term this might be a viable approach for some, I don’t think this approach is a long term strategy and it has risks.

There are some good solutions to the problem. However, there are no quick fixes with a tool. If you are shopping for a tool for converting diagnosis and procedure codes, make sure that you include subject matter experts in the area on your selection team, and create challenges for the vendors to overcome that represent real-world clinical scenarios – not canned demonstrations. That applies in any industry but especially in so called code converters or neutralizers.

Master Data Management on the other hand can be used along with careful thinking about the specific health plan or provider medical policies. In our experience, not only are tools not appropriate by themselves, but there are regional and functional differences in the coding. And, physicians just won’t change their behavior unless education from trusted colleagues in their area help provide the needed information so that they can see why they need to change.

In addition, what physicians and coders do now and what they do under ICD-10 is of critical importance. Education cannot be overlooked. The industry is moving gradually from a reimbursement and procedure focused one to quality. There are some important quality measures with big carrot and stick that many expect will influence the behavior of health care providers and ultimately the entire health care industry.

Therefore, tools, data, people and process have to be applied in a harmonious way without viewing any of them alone as magic bullets, while being sensitive to regional practices as well as the role of each player in the health care service chain.

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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