ICD10 SmallHospitals 508

ICD-10 Implementation Guide
for Small Hospitals

Table of Contents
1. Introduction to ICD-10 ......................................................................................................................1
2. About ICD-10 .....................................................................................................................................3
3. Limitations of ICD-9 ..........................................................................................................................4
4. Benefits of ICD-10.............................................................................................................................5
5. Comparing ICD-9 and ICD-10 ..........................................................................................................6
6. ICD-10 Impacts Across the Health Care Industry..........................................................................8
ICD-10 and Small Hospitals ...........................................................................................................10
7. Implementing ICD-10 ......................................................................................................................11
Planning Phase................................................................................................................................12
Implementation Timeline...............................................................................................................12
Project Management Process .....................................................................................................15
Risk and Issue Management ........................................................................................................20
Communication And Awareness Phase .......................................................................................24
Resource Management and Training............................................................................................25
Assess Training Needs..................................................................................................................25
Initiate a Training Plan...................................................................................................................26
Assessment Phase..........................................................................................................................29
Business Processes Affected by ICD-10......................................................................................29
High-level Hospital Business Impacts ..........................................................................................31
Patient Flow and Revenue Cycle..................................................................................................33
Medical Records/Health Information Management......................................................................36
Quality ...........................................................................................................................................37
Analytics and Research ................................................................................................................37
Medical Staff Functions ................................................................................................................39
Information Systems.....................................................................................................................39
How ICD-10 Affects Clinical Documentation ...............................................................................42
How ICD-10-PCS Affects Clinical Documentation.......................................................................44
ICD-10 Effects on Small Hospital Reimbursement ......................................................................44
Methodology to Evaluate ICD-10 Vendors and Tools...................................................................46
Assessing Vendor Functional Capabilities....................................................................................47
Scenario-Based Vendor Assessment ...........................................................................................51
ICD-10 Implementation Guide for Small Hospitals i

Implementation Phase....................................................................................................................52
Operational Implementation Activities..........................................................................................52
Resources Available to Ease ICD-10 Transition ...........................................................................53
General Equivalency Mappings (GEMs) .......................................................................................54
Testing Phase ..................................................................................................................................54
Test Plan Implications ...................................................................................................................56
Test Case Implications..................................................................................................................56
Test Data Implications...................................................................................................................56
Error Testing..................................................................................................................................57
Internal Testing..............................................................................................................................57
External Testing.............................................................................................................................58
Transition Phase..............................................................................................................................59
Go-Live .........................................................................................................................................62
Ongoing Support ..........................................................................................................................63
Potential Ongoing Support Issues with Vendors..........................................................................63
Potential Payer Interaction Issues ................................................................................................64
Post-Implementation Audit Processes and Procedures ..............................................................64
8. Next Steps........................................................................................................................................65
9. Appendix: Relevant Templates ......................................................................................................66
ICD-10 Implementation Guide for Small Hospitals ii

Figures
Figure 1: ICD-10 Impacts across the Industry .........................................................................................................8
Figure 2: ICD-10 Implementation Phases ..............................................................................................................11
Figure 3: Readiness Assessment Method .............................................................................................................29
Figure 4: Core Hospital Departments Affected by ICD-10 ....................................................................................30
Figure 5: Impact Analysis Method .........................................................................................................................31
Figure 6: Hospital Information System Diagram ....................................................................................................41
Figure 7: Transition Plan Method ...........................................................................................................................59
Tables
Table 1: Diagnosis Code Comparison......................................................................................................................6
Table 2: Inpatient Procedure Code Comparison......................................................................................................7
Table 3: Operational Implementation Options .........................................................................................................9
Table 4: ICD-10 Hospital Implementation Timeline................................................................................................13
Table 5: Project Management Recommended Actions and Resources for Small Hospitals.................................16
Table 6: Hospital Risks...........................................................................................................................................20
Table 7: Communication Plan Key Components and Details ................................................................................24
Table 8: Training Preparation and Needs Assessment ..........................................................................................26
Table 9: Training Topics, Purpose, and Audience ..................................................................................................28
Table 10: Hospitals Business Impacts ...................................................................................................................32
Table 11: Patient Access/Finance/Revenue Cycle Impacts ..................................................................................34
Table 12: Medical Records Impacts.......................................................................................................................36
Table 13: Research Impacts...................................................................................................................................38
Table 14: Administration.........................................................................................................................................39
Table 15: Information Systems Impacts.................................................................................................................40
Table 16: Sample Documentation Requirements for Fractures of the Radius ......................................................43
Table 17: How ICD-10 Affects Hospital Reimbursements .....................................................................................45
Table 18: Industry Tools for Hospitals ....................................................................................................................53
Table 19: ICD-10 Testing Types..............................................................................................................................55
Table 20: Operational Impacts and Strategies for Monitoring ...............................................................................60
Table 21: Key Considerations for Transition Phase ...............................................................................................61
Table 22: Go-Live Tasks and Associated Actions..................................................................................................62
ICD-10 Implementation Guide for Small Hospitals iii

1 Introduction to ICD-10
Introduction to ICD-10
On October 1, 2013 a key element of the data foundation of the United States’ health care system
will undergo a major transformation. We will transition from the decades-old Ninth Edition of the
International Classification of Diseases (ICD-9) set of diagnosis and inpatient procedure codes to the
far more contemporary, vastly larger, and much more detailed Tenth Edition of those code sets—or
ICD-10—used by most developed countries throughout the world.
This transition will have a major impact on anyone who uses health care information that contains a
diagnosis and/or in-patient procedure code, including:
• Hospitals
• Health care practitioners and institutions
• Health insurers and other third-party payers
• Electronic-transaction clearinghouses
• Hardware and software manufacturers and vendors
• Billing and practice-management service providers
• Health care administrative and oversight agencies
• Public and private health care research institutions
Making the transition to ICD-10 is not optional.

All “covered entities”—as defined by the Health Insurance Portability and Accountability Act of 1996
(HIPAA)—are required to adopt ICD-10 codes for use in all HIPAA transactions with dates of service
on or after the October 1, 2013 compliance date. For HIPAA inpatient claims, ICD-10 diagnosis and
procedure codes are required for all inpatient stays with discharge dates on or after October 1, 2013.
Please note that the transition to ICD-10 does not directly affect provider use of the Current Procedural
Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes.
ICD-10 Implementation Guide for Small Hospitals 1

About Version 5010
To process ICD-10 claims or other transactions, providers, payers and vendors must first
implement the “Version 5010” electronic health care transaction standards mandated by HIPAA.
The existing HIPAA “Version 4010/4010A1” transaction standards do not support the use of the
ICD-10 codes.
Everyone covered by HIPAA must install Version 5010 in their practice management or other
billing systems and test with all payers and trading partners by January 1, 2012. It is important
to know that though the 5010 transaction will be in use before October 1, 2013, covered entities
are not to use the ICD-10 codes in production (outside of a testing environment) prior to that
date.
Please note: your organization must coordinate the Version 5010 and ICD-10 implementations
to identify affected transactions and systems. For more information on Version 5010, go to the
CMS website at http://www.cms.gov/ICD10 and click on “Version 5010” on the menu on the
left side of the page.

2
About ICD-10
About ICD-10
The World Health Organization (WHO) publishes the International Classification of Diseases (ICD) code
set, which defines diseases, signs, symptoms, abnormal findings, complaints, social circumstances,
and external causes of injury or disease. The ICD-10 is copyrighted by the WHO (http://www.who.
int/whosis/icd10/index.html). The WHO authorized a US adaptation of the code set for government
purposes. As agreed, all modifications to the ICD-10 must conform to WHO conventions for the ICD.
Currently, the United States uses the ICD code set, Ninth Edition (ICD-9), originally published in 1977,
in the following forms:
• ICD-9-CM (Clinical Modification), used in all health care settings
• ICD-9-PCS (Procedure Coding System), used only in inpatient hospital settings
In 1990, the WHO updated its international version of the ICD-10 (Tenth Edition, Clinical Modification)
code set for mortality reporting. Other countries began adopting ICD-10 in 1994, but the United States
only partially adopted ICD-10 in 1999 for mortality reporting.
The National Center for Health Statistics (NCHS), the federal agency responsible for the United
States’ use of ICD-10, developed ICD-10-CM, a clinical modification of the classification for morbidity
reporting purposes, to replace our ICD-9-CM Codes, Volumes 1 and 2. The NCHS developed ICD
10-CM following a thorough evaluation by a technical advisory panel and extensive consultation with
physician groups, clinical coders, and others to ensure clinical accuracy and usefulness.

3 Limitations of ICD-9
Limitations of ICD-9
ICD-9 has several limitations that prevent complete and precise coding and billing of health conditions
and treatments, including:
• The 30-year old code set contains outdated terminology and is inconsistent with current medical
practice.
• The code length and alphanumeric structure limit the number of new code sets that can be
created, and many ICD-9 categories are already full.
• The codes themselves lack specificity and detail to support
the following: ICD-9-CM limits operations,
— Accurate anatomical descriptions reporting, and analytics
processes because it:
— Differentiation of risk and severity
• Follows a 1970s outdated
— Key parameters to differentiate disease manifestations
medical coding system
— Optimal claim reimbursement
• Lacks clinical specificity
— Value-based purchasing methodologies to process claims and
• The lack of detail limits the ability of payers and others to reimbursement accurately
analyze information such as health care utilization, costs and • Fails to capture detailed health
outcomes, resource use and allocation, and performance care data analytics
measurement.
• Limits the characters available
• The codes do not provide the level of detail necessary to (3-5) to account for complexity
further streamline automated claim processing, which and severity
would result in fewer payer-physician inquiries and potential
claim-payment delays or denials.

4 Benefits of ICD-10
Benefits of ICD-10
By contrast, ICD-10 provides more specific data than ICD-9 and better reflects current medical
practice. The added detail embedded within ICD-10 codes informs health care providers and health
plans of patient incidence and history, which improves the effectiveness of case-management and
care-coordination functions. Accurate coding also reduces the volume of claims rejected due to
ambiguity. Here the new code sets will:
• Improve operational processes across the health care
industry by classifying detail within codes to accurately ICD-10 codes refine and improve
process payments and reimbursements. operational capabilities and
processing, including:
• Update the terminology and disease classifications to be
consistent with current clinical practice and medical and • Detailed health reporting and
technological advances. analytics: cost, utilization, and
outcomes;
• Increase flexibility for future updates as necessary.
• Detailed information on
• Enhance coding accuracy and specificity to classify
condition, severity, comorbidities,
anatomic site, etiology, and severity.
complications, and location;
• Support refined reimbursement models to provide equitable
payment for more complex conditions. • Expanded coding flexibility by
increasing code length to seven
• Streamline payment operations by allowing for greater characters; and
automation and fewer payer-physician inquiries, decreasing
delays and inappropriate denials. • Improved operational processes
across health care industry by
• Provide more detailed data to better analyze classifying detail within codes to
disease patterns and track and respond to public accurately process payments and
health outbreaks. reimbursements.
• Provide opportunities to develop and implement new
pricing and reimbursement structures including fee schedules and hospital and ancillary
pricing scenarios based on greater diagnostic specificity.
• Provide payers, program integrity contractors, and oversight agencies with opportunities
for more effective detection and investigation of potential fraud or abuse and proof of intentional
fraud.

5 Comparing ICD-9 and
ICD-10
Comparing ICD-9 and ICD-10

There are several structural differences between ICD-9-CM codes and ICD-10 codes1. Table 1
illustrates the difference between ICD-9-CM (Volumes 1 and 2), and ICD-10-CM. Table 2 illustrates
the difference between ICD-9-CM, (Volume 3) and ICD-10-PCS.
Table 1: Diagnosis Code Comparison
CHARACTeRISTIC ICD-9-CM (VoLS. 1 & 2) ICD-10-CM
Field length 3-5 characters 3-7 characters
Available codes Approximately 13,000 codes Approximately 68,000 codes
Code composition Digit 1 = alpha or numeric Digit 1 = alpha

(numeric or alpha) Digits 2-5 = numeric Digit 2 = numeric
Digits 3-7 = alpha or numeric
Available space for Limited Flexible

new codes
overall detail Ambiguous Very specific (Allows description of comorbidities,
embedded within manifestations, etiology/causation, complications,
codes detailed anatomical location, sequelae, degree of
functional impairment, biologic and chemical agents,
phase/stage, lymph node involvement, lateralization
and localization, procedure or implant related, age
related, or joint involvement)
Laterality Does not identify right versus left Often identifies right versus left
Sample code2 813.15, Open fracture of head of radius S52123C, Displaced fracture of head of unspecified
radius, initial encounter for open fracture type IIIA,
IIIB, or IIIC
1. http://www.ama-assn.org/ama1/pub/upload/mm/399/icd10-icd9-differences-fact-sheet.pdf
2. http://library.ahima.org/xpedio/groups/public/documents/ahima/bok3_005568.hcsp?dDocName=bok3_005568

Table 2: Inpatient Procedure Code Comparison
Calendar Year (CY) for which EP Receives an
CHARACTeRISTIC ICD-9-CM (VoL. 3) ICD-10-PCS
Field length 3-4 characters 7 alpha-numeric characters; all are required
Available codes Approximately 3,000 Approximately 72,081
Available space for Limited Flexible

new codes
overall detail Ambiguous Precise definition regarding anatomic site, approach,
embedded within device used, and qualifying information
codes
Laterality Code does not identify right versus left Code identifies right versus left
Terminology for Generic description Detailed description

body parts
Procedure Lacks description of procedure approach Detailed description of procedure approach. Precise
description definition of anatomic site, approach, device used,
and qualifying information
Character position N/A 16 PCS sections identify procedures in a variety of

within code classifications (e.g., medical surgical, mental health,
etc.). Among these sections, there may be variations
in the meaning of various character positions, though
the meaning is consistent within each section. For
example, in the Medical Surgical section,
Character 1 = Name of Section*
Character 2 = Body System*
Character 3 = Root Operation*
Character 4 = Body Part*
Character 5 = Approach*
Character 6 = Device*
Character 7 = Qualifier*
(*For the “Medical Surgical” codes)
example code 3924, Aorta-renal Bypass 04104J3, Bypass Abdominal Aorta to Right Renal
Artery with Synthetic Substitute, Percutaneous
Endoscopic Approach

6 ICD-10 Impacts Across
the Health
the Healthcare
Across
Care Industry
Industry
HeadlineImpacts Across the Health Care Industry

ICD-10
3 lines of
ICD-10 text many areas and organizations in the health care industry. Figure 1 illustrates various
affects
3 lines of
impacts for text
hospitals, health care payers/clearinghouses, providers, patients, the treasury, and banks.
3 lines of text
Specific hospital impacts are described later in this guide.
Figure
Figure 1: ICD-10Impacts
1: ICD-10 Impacts Across
across the Industry
the Industry
Employers Insurance Brokers Treasury
Intermediary
for Insurance
products
ICD
premium
Contract for benefit ICD
payments Finanical
products, enroll employees, benefits and rate
premium payment negotiation Information
Health Care Payers

Patient/Member/ ICD
Beneficiary premium payments &
Claim Submissions ICD
Commercial Insurers
Claims
Detection & Recovery

Post Payment Fraud
Pre-Payment Fraud
payments Medicare
Prevention
54 State Medicaid Agencies/

Social Services
Co-payments
Co-Insurance ICD Veterans Affairs
Claims payments
Military Health Systems

Providers Clearinghouses
ICD
Claims
ICD ICD
ICD payments Multiple payment
Claims Coordination
ICD
Banks Other Payers

Clinical & Financial
Information
ICD
Health Care Payers
ICD
Outsourced Services Auto Insurers
(Business Associates
& Covered Entities)
Workers Comp Plans
Source: noblis, Inc.

Table 3: operational Implementation options
PHySICIANS HoSPITALS HeALTH PLANS AND HMo’S FeDeRAL GoVeRNMeNT
PRoGRAMS
Electronic health records Patient access (inpatient and Claims Medicare

ambulatory clinics)
Practice management billing Fraud and abuse Medicaid agencies
Lab/radiology
Accounts receivable Customer service Plus Health Plans functions
Other ancillary services minus network and rating
Productivity loss Reimbursement
Pharmacy Data warehouse for statistical
EOBs/EOCs reporting
Physician order entry
Network contract
Image management
Actuarial
Supply chain management
Rating
Health information
management (HIM) Utilization Underwriting
review Membership
Bar coding Utilization review
Billing Benefits
Contracts
Electronic data interchange
(EDI)
Optical character recognition
Electronic remittance advice
(ERA)/ electronic funds
transfer (EFT)
Reporting
Data warehousing
SPeCIALTy PRoVIDeRS SuPPLeMeNTAL HeALTH MAJoR STATe HeALTH CARe TooLS &
INDuSTRy oRGANIzATIoNS GoVeRNMeNTS DeCISIoN SuPPoRT
Veterans hospitals Third-party administrators University medical centers Predictive modeling

Federal hospitals Workers Comp Children’s health programs Health coaching
Nursing homes Auto liability Student health programs Personal financial tools
(Flexible and Medical Savings
Home health providers Self Admin Employers Department of Corrections Accounts)
Durable Medical Equipment Clearinghouses County and rural health Federal, state, and local
providers programs authority collection of
Programs that address
Hospice health needs of the poor and State public health agencies diagnosis data from clinical
uninsured provider for epidemic and new
Mental health providers State-funded medical schools disease analysis
Substance abuse providers State employee health
programs
Physical therapy providers
Drug manufacturers
Supply chain companies

ICD-10 and Small Hospitals
For the purposes of this document, a small hospital is defined as a health care institution with fewer
than 100 hospital beds that provides patient treatment with specialized staff and equipment, and that
often, but not always, provides for longer-term patient stays. Hospital claims refer to both outpatient
and/or inpatient medical care submitted on an institutional claim (837i). Professional claims (837p)
may be submitted through hospital-owned physician practices.
Small hospitals must understand, anticipate, and address the impact of the ICD-10 transition on
revenue cycles and clinical, compliance, reporting and operational systems. This includes but is not
limited to the following functional areas:
• Patient intake
• Eligibility determination
• Authorization
• Certification
• Scheduling
• Care management/disease management (including clinical documentation)
• Coding and supporting clinical documentation requirements
• Billing and reimbursement (including diagnosis-related group (DRG), capitation rates, case rates
and per diems)
• Contracts and fees
• Payment reconciliation (including denial management)
• Regulatory and compliance reporting
• Quality assessment and management
• Case mix and population risk assessment
• Audit response
The ICD-10 Implementation Guide for Small Hospitals provides you and your hospital with a useful
framework to pursue and successfully execute a timely and smooth transition to the ICD-10 code sets
by October 1, 2013.

7 Implementing ICD-10
Implementing ICD-10
The ICD-10 Implementation Guide for Small Hospitals groups the milestones and tasks into the
following six phases:
1. Planning
2. Communication and Awareness
3. Assessment
4. operational Implementation
5. Testing
6. Transition
In order to achieve a smooth ICD-10 transition, your organization will need to create and follow a
variety of plans tailored to your unique needs and culture, including plans for:
• Project management
• Communication
• Assessment
• Implementation
• Testing
• Post-transition operations
For additional, more detailed tasks please refer to the Small Hospital ICD-10 Implementation Timeline
Figure 2 shows some recommended ICD-10 implementation phases and high-level steps.
Figure 2: ICD-10 Implementation Phases
Communication operational
Planning Assessment Testing Transition
& Awareness Implementation
Create ICD-10 Create a Assess business Identify system Complete Level I Prepare and
project plan communication plan and policy impact migration strategies internal testing establish the
production and go-
Establish project Communicate the Assess technological Monitor productivity Complete Level II live environments
transition to all impacts and conduct external testing
management structure
stakeholders quality analysis Deliver ongoing
Conduct risk
Establish governance support
Assess training analysis and create Implement revenue
plan to communicate needs and develop remediation strategy cycle predicitve Update analytic
with external partners a training plan models models
Evaluate vendors
Establish risk Meet with staff to Implement business Evaluate contracting
management and discuss effects and and technical models, decreased
contingency plan assign responsibilities modifications productivity prediction
Prepare and models, and severity
deliver training definition

Planning Phase
Project management is important to any large undertaking. ICD-10 implementation will affect many
departments of your hospital. Moving from ICD-9 codes to ICD-10 codes for services delivered on or
after October 1, 2013, will require significant planning including:
• ensure top leadership understands the breadth and significance of the ICD-10 change.
Download free, authoritative ICD-10 fact sheets and background information from the CMS
website at http://www.cms.gov/ICD10 and share trade publication articles on the transition.
• Assign overall responsibility and decision-making authority for managing the transition. This
can be one person or a committee depending on the size of your hospital.
• Plan a comprehensive and realistic budget. This should include costs such as software
upgrades and training needs.
• ensure involvement and commitment of all internal and external stakeholders. Contact
vendors, clearinghouses, payers, physicians, and others to determine their plans for ICD-10
transition.
• Adhere to a well-defined timeline that makes sense for your organization (See Table 4: Hospital
ICD-10 Implementation Timeline).
Implementation Timeline
While individual departments and transition team members may be more involved in specific
implementation phases than others, everyone on your ICD-10 team should be aware of your hospital’s
overall ICD-10 transition timeline, as shown in this example.
Using the ICD-10 Implementation Timeline below as a guide, your organization should:
• Identify any additional tasks based on your organization’s specific business processes, systems,
and policies
• Identify critical dependencies and predecessors
• Identify resources and task owners
• Estimate start dates and end dates
• Identify entry and exit criteria between phases
• Continue to update the plan throughout ICD-10 implementation and afterwards

Table 4 displays a timeline template that lists essential activities your hospital will need to complete to
successfully transition to ICD-10. Please note that each organization’s exact implementation process
may be unique. Many of these timelines can be compressed and/or performed at the same time as
other tasks, depending on your needs. The estimated total duration for each activity is provided.
Table 4: Small Hospital Implementation Timeline

Note: This This table only addresses the ICD-10 implementation. You will also need to implement Version 5010
simultaneously if your organization has not done so yet. The Version 5010 compliance date is January 1, 2012.
ACTIoN STePS START eND

DATe DATe
Actions to Take Immediately
Inform leadership, physicians, and staff of upcoming changes (3 months)
Create a project management structure, such as project oversight team or interdisciplinary

steering committee, as well as ICD-10 coordination manager and subject matter expert (1
month)
Perform an impact assessment and identify potential changes to existing work flow and
business processes (6 months)
• Collect information from each department on current use of ICD-9 and the number of staff
members who need ICD-10 resources and training. Staff training will most likely involve
billing and other financial personnel, coding staff, clinicians, management, and IT staff
• Evaluate the effect of ICD-10 on other planned or on-going projects (e.g., Version 5010
transition, eHR adoption and Meaningful use)
Determine business and technical implementation strategy (1 month)
Develop and complete implementation plan, including a communications plan

(3 months)
estimate and secure budget, including all costs associated with implementation such as
software and software license costs, hardware procurement, and staff training costs (2 months)
Contact systems vendors, clearinghouses, and/or billing services to assess their readiness for
ICD-10 and evaluate current contracts (2 months)
• Determine if systems vendors and/or clearinghouses/billing services will support changes
to systems, a timeline and costs for implementation changes, and identify when testing will
occur
• Determine anticipated testing time and schedule (when they will start, how long they will
need, and what will be needed for testing)
• If vendor(s) to provide solution, then engage immediately
Begin internal system design and development, if not started already
educate staff on changes in documentation requirements from health plans

Table 4: Small Hospital Implementation Timeline continued

DATe DATe
Winter 2012
Complete system design and development
Continue to educate staff on changes in documentation requirements from health plans
Start to conduct internal testing. This must be a coordinated effort with internal coding, billing
and technical resources and vendor resources (9 months)
Data managers should start to collaborate with IT to begin implementing the ICD-10 project
plan throughout 2012 until ICD-10 implementation. Action steps include reviewing the sample
data reports, testing, and evaluating data for accuracy (11 months)
Spring 2012
Continue to educate staff on changes in documentation requirements from health plans
Data managers should collaborate with IT to continue implementing the ICD-10 project plan
throughout 2012 until ICD-10 implementation. Action steps include reviewing the sample data
reports, testing, and evaluating data for accuracy
Summer 2012
Continue internal testing and vendor code deployment (3 months)
Fall 2012
Complete educating staff on changes in documentation requirements from health plans
Begin external testing (10 months)
Winter 2013
Continue external testing
until ICD-10 implementation. Action steps include reviewing the sample data reports, testing,
and evaluating data for accuracy

Table 4: Small Hospital Implementation Timeline continued

DATe DATe
Spring 2013
Continue external testing
Conduct intensive training for coders on day-to-day basis (6 months)
Data managers should collaborate with IT to begin implementing the ICD-10 project plan until
ICD-10 implementation. Action steps include reviewing the sample data reports, testing, and
evaluating data for accuracy
Summer 2013
Complete external testing
Transition ICD-10 systems to production
Continue intensive training for coders on day-to-day basis
Data managers should collaborate with IT to begin implementing the ICD-10 project plan until
ICD-10 implementation. Action steps include reviewing the sample data reports, testing, and
evaluating data for accuracy
Fall 2013
Complete transition of ICD-10 systems to production
Complete intensive training for coders on day-to-day basis
october 1, 2013: ICD-10 system implementation for full compliance. ICD-9 codes will continue
to be used for services provided before october 1, 2013
CMS consulted resources from the American Medical Association (AMA), the American Health Information Management
Association (AHIMA), the North Carolina Healthcare Information & Communications Alliance (NCHICA) and the
Workgroup for Electronic Data Interchange (WEDI) in developing this timeline.
Project Management Process

Table 5 identifies a series of recommended actions that small hospitals may consider in establishing
a process to manage ICD-10 implementation.
Table 5 includes the following elements

• Component: Core parts of a project management structure
• Recommended Actions and Resources: Best practices your hospital should employ to support
a smooth transition
• Resources: References hospitals may use to carry out the best practices

Table 5: Project Management Recommended Actions and Resources
for Small Hospitals
CoMPoNeNT/ ReCoMMeNDeD ACTIoNS ReSouRCeS

GoAL
Project management • Create a project oversight team consisting of senior • Implementation Timeline to identify
structure/establish representatives from the medical and nursing detailed ICD-10 implementation dates and
accountability staff, finance, information technology (IT), health milestones
across ICD-10 information management (medical records), and the
implementation team business office. The project oversight team will: • Responsible, Accountable, Support,
structure Consulted, Informed (RASCI) template
—Define roles and responsibilities
—Assign tasks
—Designate authority concerning change control
management, risk management, and vendor
management
• Appoint an ICD-10 coordination manager
responsible for making business, policy, and/or
technical decisions
• Assemble an implementation team, establish a
formal project management structure and designate
authority for different aspects of the transition,
including change management, risk management,
communications, training, testing, and vendor
management
• Define a process for team members to discuss
issues, risks, and changes relevant to the project’s
scope, schedule, and costs
Assessment/Identify • Assess the readiness of your hospital’s staff and • Business Processes Affected by ICD-10 for
readiness for ICD- providers for the transition information identifying ICD-10 impacts for
10 transition and hospital business processes and systems
determine the level of —Identify and assess skill levels and gaps for future
support needed needs and training • Methodology to Evaluate ICD-10 Vendors
and Tools
• Perform an impact assessment to identify policies,
processes, and systems that use or are affected by • Assessing Vendor Functional Capabilities
ICD coding, especially documentation and claims
processing
—Ask your staff where they use and/or see these
codes appear such as documentation, manuals,
health information systems, and billing software
• Identify and assess readiness of vendors,
clearinghouses, and other business associates
affected by ICD-10 and/or those whose involvement
is essential to ICD-10 implementation
• Document and communicate impact assessment
findings

for Small Hospitals continued

GoAL
Transition plan and • Establish strategies, tasks and goals for the ICD-10 • Methodology to Evaluate ICD-10 Vendors
budget /use cost- transition. and Tools
benefit analysis to
inform decision- • Select appropriate vendors by evaluating the costs • Assessing Vendor Functional Capabilities
making and benefits associated with ICD-10 changes
in your hospital business process and system
upgrades. Compare this with your current vendors
and/or potential vendors offerings.
• Coordinate with internal and external resources
(including vendors and other parties) required to
support ICD-10 implementation across your hosptial
processes, policies, and systems.
• Document an inventory of the tasks involved in
meeting the October 1, 2013, deadline. Establish
the sequence, work effort, and duration for each
task within the inventory, including:
—Policy, procedures, and system updates
—Staff training needs to support all business
processes, policies, and technology
—Vendor tasks essential to ICD-10 implementation

—Vendor and third-party planning
• Distribute the implementation timeline internally and
externally. Anticipate the potential need to refine
the ICD-10 implementation timeline as internal or
external factors warrant.
• Plan to regularly communicate the status of the
transition based on the timeline.
• Implement integrated change management
strategies, policies, and procedures across all
functional areas and monitor acceptance on an on
going basis.
• Formulate and approve a budget for expenses
related to the transition like hospital-wide training
and system upgrades.


GoAL
Communication plan/ • Establish awareness and understanding of scope • Communications and Awareness section
Maintain and share among hospital and medical staff leadership and for methods to communicate ICD-10
knowledge across secure their support for strategy, budget, and awareness and planning with internal staff
the team implementation plan and external vendors and partners
• Develop a comprehensive communication plan with
internal staff, providers, contractors, vendors, and
other stakeholders
— Provide ongoing status updates to maintain focus
on the project and upcoming initiatives that require
staff involvement
— Provide regular updates to senior leadership and
those most directly affected by the changes,
including coders, clinicians, physicians, and
customer service
Risk management • Identify possible implementation issues and risks • Business Processes Affected by ICD-10 for
plan/Proactively information identifying ICD-10 impacts for
identify risks across • Coordinate between leadership team and hospital business processes and systems
internal and external implementation team to provide qualitative
critical infrastructure interdisciplinary or interdepartmental reviews and to • Risk and Issue section
address associated risks
• Determine clear decision making process and
establish accountability and authority for resolving
issues
• Develop timely strategies to address issues and
risks
operational • Establish points of contact with all vendors and build • Implementation section
implementation/ clear communications channels
Manage the • Consider creating a Responsible,
implementation • Create a grid to track and manage both internal Accountable, Support, Consulted, Informed
process and external stakeholder contact information and (RASCI) template
implementation activities
• Assign responsibility for developing and executing
the ICD-10 implementation plan
• Establish mechanisms for early identification of
implementation problems and corrective actions
with internal and external parties
—Track issues and risks and work with existing
vendors and third parties to plan mitigation
strategies
—Monitor vendor and third-party relationships
—Monitor and coordinate with external groups
including physician practices, State Medicaid
Agencies, Medicare entities, and clearinghouses


GoAL
Training/Develop • Educate staff in key function areas like claims, • Training section
the skills necessary clinical and utilization review, and information
to support ICD-10 systems on: • Communication and Awareness section
implementation
within your —Scope and impact of ICD-10 conversion
organization —Importance of ICD-10 readiness
—Training needs/Outreach needs
• Provide training to appropriate staff on the ICD-
10 code sets, associated coding guidelines and
General Equivalence Mappings (GEMs) or other
preferred ICD mapping tools
• Relay the importance of accurate coding and
maintain awareness of the ICD-10 implementation
• Identify knowledge- and training-champions to serve
as contacts for your ICD-10 staff
• Recognize staff accomplishments related to ICD-10
implementation and key milestones
—Consider providing incentives to staff for
accomplishments related to the ICD-10
implementation
Testing/ensure • Create comprehensive testing strategy • Testing section

readiness for go-live
• Monitor and work with vendor(s) to develop test
plans and test data
• Test internal systems (Level I)
• Test external systems (Level II)
• Resolve any outstanding problems from testing
failures
Post-implementation/ • Transmit electronic claims and other transactions • ICD-10 Implementation Timeline
Achieve 100 percent successfully using ICD-10 for claims with dates of
compliance service on or after October 1, 2013
• Monitor actual progress versus planned progress
• Work with vendor(s) to provide customer support
• Monitor the impact on reimbursements, claims
denials and rejections, coding accuracy and
productivity, fraud and abuse detection, and
investigations
• Monitor system capacity requirements and
application runtime efficiencies
• Evaluate contracting models, productivity, risk
prediction models and severity definition
• Resolve post-implementation issues as quickly as
possible; create plan for full problem resolution as
needed

Risk and Issue Management
Your organization will need to work with vendors and other parties to anticipate implementation issues
and risks and develop strategies to streamline ICD-10 implementation.
To do this effectively, consider creating a risk inventory that:

• Identifies risks to successful implementation by departments or key internal/external functions
• Identifies the chance a risk will occur, its degree of potential impact, and relevant ways to avoid
risk like redundant training, identifying alternate vendors, and creating contingency backups for
key functions
• Assigns responsibility for risk reduction action, including when to involve project management or
executive sponsor
• Continuously monitors impact on scope, schedule, and costs
• Addresses implementation issues and risks through channels appropriate for your hospital
Table 6 identifies a preliminary list of fundamental risks your hospital should be aware of and manage
and includes:
• Risk: Broad categorization of various specific risks
• Description of Risk: Specific risk examples within the broad category
• Ways to Reduce Risk: Steps to manage and mitigate the risk
NOTE: the list is not exhaustive but a primer.
Table 6: Hospital Risks
RISK DeSCRIPTIoN oF RISK WAyS To ReDuCe RISK

Internal or external If your hospital’s implementation planning • Evaluate your existing vendors’ past
parties fail to remain effort does not include coordinating with performance regarding project deadlines to
on track for the ICD- trading partners, vendors, consultants, and identify and address potential problems.
10 schedule other stakeholders, then the ICD-10 master
implementation plan may not be realistic and • Identify and evaluate alternative vendors.
could affect your hospital’s ability to complete the • Coordinate with payers to ensure schedule
necessary system changes in time to meet the alignment. Provide training to key staff
October 1, 2013, deadline. members.
• Inadequate or untimely staff training • Budget realistically and include cushion for risk-
• Lack of vendor preparation related overruns.
• Loss of key vendors • Create implementation strategy for policies,

processes, and systems.
• Loss of key staff
• Identify and schedule predecessor tasks.
• Lack of payer readiness
• Survey third party payers, clearinghouses, and
• Budget limitations current vendors regularly to asses their progress.

Table 6: Hospital Risks continued
Adverse short-term The transition between coding systems might • Build up hospital cash reserves and/or secure
impact on hospital adversely affect your hospital’s revenue stream. increased lines of credit.
revenue stream The following risks will affect revenue streams:
• Closely monitor claim submittals immediately
• Lack of payer readiness and resulting disruption pre- and post-October 1, 2013, to prevent
or increased delays and denials in payers’ submittal of duplicates.
claims processing
• Run both ICD-9 and ICD-10 in tandem for a
• Increased payer scrutiny to identify potential specified period post-implementation.
duplicate billings and/or payments for service
dates pre- and post-October 1, 2013 (i.e., one • Identify or conduct mappings between ICD
under ICD-9 and one under ICD-10) 9 and ICD-10 codes, as applicable. Identify
ICD-10-CM codes that your hospital may
• Increased payer requests for medical records inadvertently double bill and take steps to
related to specific claims prevent.
exposure to Private payers and government program integrity • Emphasize the critical importance of proper
allegations of fraud agencies and contractors may focus additional clinical documentation and periodically audit
and abuse attention on opportunities for fraud and abuse sample records for completeness, accuracy
related to the transition to ICD-10 codes. and consistency. Ensure that clinicians
understand the risks of incomplete or inaccurate
There are substantial new requirements for clinical documentation.
documentation in support of the increased detail
in ICD-10. Lack of familiarity and adherence by • Emphasize in staff training and to external
clinical staff in meeting these documentation vendors the critical importance of ensuring that
requirements will expose the organization to an all coding is consistent with the clinical record
increased risk during audits. and the risks to your hospital if team members
fail to code accurately.
Coding practices will likely be subject to increased
audit scrutiny for an indefinite period following the • Identify early on the high priority clinical
October 1, 2013, compliance date. domains that will be most affected by the new
documentation requirements.
Coding discrepancies that materially affect
payment amounts will be subject to routine • Begin training for clinicians and coders and use
overpayment recovery actions. If there is both coding sets for six months or more prior to
significant financial impact, they may undergo the compliance date.
more severe enforcement actions, including
formal investigations and referral for administrative • Periodically audit claim submittals, both pre-
sanctions or other penalties. payment and post-payment, to identify and
address incorrect coding.
• Identify and evaluate experienced health care
fraud and abuse counsel as resources for
addressing potential problems.
• Review Health and Human Services Office
of Inspector General (HGS-OIG) Voluntary
Disclosure Guidelines as a basis for proactively
addressing potential problems.
• Monitor and perform your own internal audits
in clinical areas targeted for audits by Medicare
and Medicaid Recovery Audit Contractors.

Adverse impact on Expect that your staff will need to follow up with • Train staff members how to manage patients’
relationships with payers more often on claim payment delays, concerns related to denied or pended
payers and patients denials, referrals, or other administrative activities authorizations, claims, and referrals.
that may affect claim payment during and after the
transition period. Your hospital can expect higher • Establish an internal mechanism for your
call volumes from patients and payers to report hospital to document and track patient
and resolve claim and authorization rejections due complaints and payer issues related to ICD-10
to incorrect coding. coded claims.
• Provide vendor tools for billing and coding
to help staff members identify potential code
matches and rationales to bridge the learning
curve quickly.
• Train staff on how to address potential transition
issues with codes, to lessen incorrect coding
and rejected claims.
Implications for care, ICD-10 implementation will have a significant • Identify and train clinicians on ICD-10
disease, impact on care management including case requirements for clinical documentation.
and case management, disease management, wellness, and Coordinate with external payers and hospitals as
management authorizations (including medical necessity and needed.
coverage determination).
• Educate and train your staff on ICD-10-related
Historically, payers carry out these functions. medical policies, benefit determination, and
However, with the advent of Accountable Care eligibility for special programs.
Organizations (ACOs), your hospital should
anticipate the need to institute these functions as
well.
In the short term, your hospital staff should
become familiar with new ICD-10-related payer
requirements regarding provider documentation
and/or reporting.
Long-term ICD-10 codes are far more detailed, which will • Urge your regional and national professional
implications for provide payers with opportunities to develop associations to monitor and report on ICD-10
payers’ network and implement new pricing and reimbursement related reimbursement initiatives.
contracts, fee structures. This includes fee schedules and/or
schedules and capitation levels and hospital and ancillary pricing • Research, understand, and document the
capitation levels scenarios that take into account greater diagnosis- impact of ICD-10 coding on your hospital’s
specificity. costs. This will give you a basis for evaluating
and responding to any related payer initiatives
to alter pricing structures and reimbursement
schedules.
Failure to maintain Ineffective communications with either internal or • Use the Small Hospital ICD-10 Operational
communication with external parties could negatively affect your ICD- Implementation Phase section of this guide and
both internal and 10 implementation schedule and costs. include stakeholders in the planning process to
external parties ensure all parties have the same goals.
Communicating inconsistent messages to staff
and external parties may disrupt timelines and • Develop a communications plan that includes
budgets. details about how communication will occur
between staff and external parties.
• Establish consistent forms of communication
for training or information sessions, including
dashboards, progress meetings, memos, or
presentations.

Failure to identify all Failure to identify affected business areas, • Include all business areas in your impact
affected areas systems, applications, databases, and interfaces assessment.
could compromise your hospital’s ability to meet
planned schedule and costs. • Interview business and project leaders to fully
understand any possible ICD-10 impacts.
Failure to perform exhaustive impact assessments
on all affected ICD-10 systems, interfaces, and • Develop a strategy for maintaining and
business areas could affect the ICD-10 master processing ICD-9 and ICD-10 codes
implementation plan and make it difficult for your simultaneously for two to five years after the
hospital to meet schedule and costs. October 1, 2013, implementation date.
If the ICD-10 business requirements gathered

during the impact assessment phase do not
accurately reflect your hospital’s business needs,
then the development/testing phase could
experience serious setbacks, making it difficult
for your hospital to meet the October 1, 2013,
implementation deadline.
Failure to test Failure to test systems and processes adequately • Develop a testing strategy for both internal and
adequately for ICD-10 before the implementation date may lead to the external testing.
following risks:
• Include the following types of testing in your
• The system may be unable to meet business timeline:
requirements
—Unit testing/base component testing
• Updated business rules may not yield the
expected outcomes —System testing
• Reports using ICD codes do not function —Regression testing

properly with the new ICD-10 codes —Performance testing
• System interfaces do not yield the expected —Privacy/security testing
results
—Internal comprehensive testing
• Test teams are not organized properly to
complete phase testing in a timely manner —External comprehensive testing
• Major reduction in system performance due
to volume transaction through-put, system
capacity limitations, processing rate, and similar
issues

Communication and Awareness Phase
A communication and awareness plan ensures that all your internal and external stakeholders understand their
responsibilities for ICD-10 implementation. The communication plan should identify stakeholders, audiences,
messages, issues, roles and responsibilities, timelines, communication methods, and evaluation techniques.
The degree of planning and documentation in this process will depend on the size of your hospital.
Table 7 identifies the key components your communication and awareness plan may encompass.
Table 7 : Communication Plan Key Components and Details
CoMPoNeNT DeTAILS
Purpose • Provide ICD-10 background information to staff members

• Describe current state of ICD-10 within your hospital
• Ensure awareness of ICD-10 implementation across departments
• Identify end goals for the communication and awareness plan
Audience and stakeholders • Identify the intended audience including stakeholders, external partners,
contractors, and vendors
• Anticipate communication gaps and frequently asked questions regarding
organization, operating structure, roles, and responsibilities
Convey the message to the audience • Convey the intended purpose and outcomes to the audience
• Describe targeted communication toward smaller groups as necessary
Identify issues to overcome • Address implementation issues

• Describe implementation plans
Assign roles and responsibilities for the • Identify the project management structure
communication activities
• Assign roles and responsibilities for the coordination manager, steering committee,
and user groups
• Define roles with clear accountability and authority to make and act on decisions
within any communication
• Consider the intended audience and responsible party for issue and risk
identification and resolution
Timeline • Identify project milestones and compliance dates

• Identify tasks, milestones, and deadlines for project teams
Method of communication and • Identify communication distribution methods

distribution
• Describe communication vehicles to monitor progress including status reports, team
meetings, project reviews
• Distribute as written, oral, visual, electronic, or in-person communication as
appropriate

Table 7 : Communication Plan Key Components and Details continued
CoMPoNeNT DeTAILS
Internal versus external • Define plans for communicating internally versus externally
communication
• Account for inherent differences between internal and external audiences
Internal communications • Assess staff training needs regarding ICD-10-CM and ICD-10-PCS
external communications • Communicate with vendors, third-party billers, and clearinghouses on ICD-10
readiness
• Communicate with software vendors on updates that will need to be implemented
into the hospital’s software system prior to October 1, 2013
• Identify and communicate with other external stakeholders on ICD-10 readiness,
including state agencies and contractors
Resource Management and Training

To prepare for ICD-10, your hospital will need to identify available resources, assess training needs,
build a training plan, and manage productivity during the transition process.
Assess Training Needs

The ICD-10 coordination manager should prepare a training needs assessment to identify:
• Affected staff members, including physicians, nurse practitioners, physician assistants, clinical
technicians, administrative staff, coders, and vendors
• Staff competence and skills gaps, and how to tailor training to individuals or business user groups
if necessary
• Optimal timing to receive training/certification
• Best approach training methods for your hospital, including webinars, certification courses, and
community courses
Consider a variety of issues when conducting a needs assessment. Using the hospital self-assessment
questions outlined below, your ICD-10 coordination manager may identify factors that suggest internal
and external training needs.

Table 8 lists self assessment questions and factors to consider when conducting a needs assessment.
Table 8: Training Preparation and Needs Assessment
SeLF-ASSeSSMeNT QueSTIoNS
Who must receive training on the ICD-10 code set?
What options are available to train staff (onsite training, vendor training, community courses, webinars, or
certification courses)?
Are there gaps in your staff’s knowledge of medical procedures and anatomy? Are there certification opportunities
in ICD-10 coding that staff can take advantage of to improve accuracy and build “ICD-10 know-how” throughout
the organization?
When should your staff complete the training?
How long will it take to train your staff?
Which training formats will work best for your staff (classroom training, web-based training, or self-guided
materials)?
How much will the training cost?
What resources will you need to support the staff after training, including manuals, system prompts,
troubleshooting guides, or FAQ lists?
Depending on the length of training, how will your staff maintain operations and reduce productivity loss during
training? What is the current staffing level?
• Is there is a business need for additional experienced coding staff to support your team during the ICD-10
transition period? Do you need to outsource some operations? Outsourcing additional coding expertise during
the preparatory stage can allow for just-in-time training and reduce the burden of the transition on staff.
Initiate a Training Plan

The training plan’s purpose is to ensure that your staff and external partners acquire the necessary
skills and knowledge on the processes, procedures, policies, and system updates particular to your
hospital’s ICD-10 implementation. The ICD-10 coordination manager should consider the following
factors when evaluating and determining training content for internal staff and external partners for
ICD-10 implementation:
• Different training formats work in different situations. Potential training sources include: traditional
classroom training, distance education, or webinars. Your hospital can also search for local ICD
10 train-the-trainer seminars or boot camps that provide sessions in a classroom-style setting.
• Check with CMS, the American Academy of Professional Coders (AAPC), American Health Information
Management Association (AHIMA), and Workgroup for Electronic Data Interchange (WEDI) to identify
webinars available for hospitals. Some webinars are free; others have fees attached.

• AAPC hosts an ICD-10-CM Implementation two-day boot camp for employees who are responsible
for their hospital’s coding, health information management, and/or ICD-10 implementation (i.e.,
the ICD-10 Coordinator). The course provides a general overview of:
— ICD-10-CM structure
— Implementation planning, finance and budgeting
— Optimization of business processes
— Information technology
— Working with vendors, crosswalking and General Equivalency Mappings (GEMs)
• The American Health Information Management Association (AHIMA) estimates that coding staff
working outside the hospital inpatient setting will require 16 hours of ICD-10 education. This
training should focus on ICD-10-CM and not ICD-10-PCS. (Hospital inpatient coding staff require
an estimated 50 hours of ICD-10 education because they will need to learn both ICD-10-CM and
ICD-10-PCS3)
• All coding staff should complete their comprehensive ICD-10 education not more than six to nine
months before the compliance date.
• Assess your staff for ICD-10 proficiency after training and provide additional training to address
weaknesses. To do this, the ICD-10 coordination manager should identify common inaccurate
code decision-making, clinical documentation errors, and productivity lags.
• To address proficiency issues, identify needs to assist with frequently asked questions about
coding, category quick reference sheets, system user prompts, or refresher courses.
• Not all coding staff will require the same type or amount of ICD-10 education. Training for coding
staff that work for your hospital’s medical specialty area or specialty clinic should focus on the
code categories most applicable to the particular patient mix.
Pre-implementation action steps:

• Plan for intensive education prior to the ICD-10 transition.
• Appropriate staff should complete comprehensive ICD-10 education not more than six to nine
months before the compliance date (October 1, 2013).
Post-implementation action steps:

• Assess your staff’s ICD-10 proficiency after they complete training and provide additional training
to address identified areas of weakness. Identify common inaccurate coding, decision-making,
claim processing errors, and productivity lags.
Table 9 identifies anticipated training needs for potential hospital staff members.
3. http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_034622.hcsp?dDocName=bok1_034622

Table 9: Training Topics, Purpose, and Audience
TRAINING ToPIC PuRPoSe oF TRAINING AuDIeNCe

Basic understanding • Understand the differences between ICD-9 and Physicians, nurse practitioners, physician
of the ICD-10 ICD-10 assistants, administrative staff, clinical technicians,
code set and clinical researchers, HIM, coders, billers, research
implementation • Understand rationale for ICD-10 adoption staff, and vendors
• Understand existing tools, risks, and industry
updates
• Clarify roles and responsibilities
Clinical definitions • Explain ICD-10 terminology Physicians, nurse practitioners, physician

and terms in ICD-10: assistants, administrative staff, clinical technicians,
ICD-10-CM and ICD • Emphasize clinical terms and meanings clinical researchers, coders, and vendors
10-PCS
ICD-10 coding • Review ICD-10 coding knowledge of medical HIM staff, administrative staff, and coders
procedures and anatomy, including clinical
specificity of the new code sets
• Refresh anatomy knowledge, if needed
ICD-10 impacts • Describe how ICD-10 affects business Physicians, nurse practitioners, physician
on clinical processes assistants, compliance and administrative staff,
documentation clinical technicians, finance staff, coders, and
• Describe clinical documentation requirements vendors
as a result of ICD-10 adoption
Partner and • Explain roles and responsibilities in ICD-10 Partners and contractors
contractor implementation process
using systems • Review ICD-10 system impacts IT, administrative and compliance staffs
updated for ICD-10
• Focus on system updates

Assessment Phase
Your hospital must assess and monitor all processes and systems affected by ICD-10. Complete the
steps shown in Figure 3 to monitor progress throughout your hospital’s ICD-10 implementation.
Figure 4: Readiness Assessment Method

Figure 3: Readiness Assessment Method
Calendar Year (CY) for whiCh eP reCeives an
Sponsor NCHICA, WEDI,

Ongoing
Operational ICD-10 CMS 5010/
InPuTS Configuration
Health Care
Committee & ICD-10 Best
Initiatives
Stakeholders Practices
Identification of Key Factors Dissemination & Completion of Data Analysis & Reporting
Readiness Survey
Identify Score
Gather Review
ICD-10 Assessments
Stakeholder Risk
Operational & Share
Input Assessment
Requirements Results
POCs
Submit Survey
ACTIVITIES
Understand Refine Gather Gather
Ongoing Key Stakeholder Stakeholder
Initiatives Factors Input Input
Disseminate Compile
Identify CHS Executive
Readiness
Key Factors Readiness
Assessment Dashboard &
for Readiness
to POCs Report
Initial & Baseline & Baseline

OuTPuTS Ongoing Ongoing Readiness
Readiness Readiness Report
Survey Dashboard
Business Processes Affected by ICD-10

ICD-10 implementation will affect nearly all core operations of health care organizations. This section
identifies potential ICD-10 impacts on your hospital’s business processes and systems. Figure 4
highlights the high-level business areas that will be affected by ICD-10.

Figure 5: Core Figure
Hospital Departments Affected by ICD-10
4: Core Hospital Departments Affected by ICD-10
Information
Systems
Admissions
Ancillary
Departments
Patient
Health Access
Registration
Information
Systems
Accounts
Receivable Scheduling
Insurance
Billing Verification
Financial
Services
Clinical Affairs
Finance
Medical Patient Care

Records units
Quality/
Mortality &
Morbidity Data
Medical
Management
To identify how ICD-10 will affect your hospital, determine which policies, processes, and systems refer
to or use ICD-10 codes. You will need to complete three major activities as part of the impact analysis.
First, acquire operational data about your hospital. It may be helpful to use reference information and
interview various parties. Next, your hospital will need to identify the work effort and actions needed
to implement the policies, processes, and systems. Finally, analyze and share the results. Figure 5
illustrates a recommended method for conducting an impact analysis.

Figure 6: Impact Analysis Method
Figure 5: Impact Analysis Method
IT System Sponsor NCHICA, WEDI,

Governing Ongoing
Operational Health Care Architecture, ICD-10 Steering CMS 5010/
InPuTS Configuration
Health Care
Processes Modules,
Health Care
Committee & ICD-10 Best
Policies Initiatives
Interfaces Stakeholders Practices
Acquire Additional Identify Work Effort, Complete Analysis &

Operational Data Action Plans Share Results
Organize Establish
Conduct Impact Indentify
Reference Interviews Risk Action
Information Analysis
Framework Plans
Refine Gather
Results as Stakeholder
Needed Input
ACTIVITIES
Create Score Impact
Interview Aggregate Gather
Information by Facility &
Questions Input
Department
Complete Finalize
Report Report
Develop Identify
Operational Work Validate
Documentation Effort Results
Impact Dashboard by
OuTPuTS Analysis Facility &
Report Department
High-level Hospital Business Impacts

Small hospital administrative and delivery systems are generally integrated so that all system
components must perform properly in order to achieve the desired results. During the impact
assessment phase of the ICD-10 implementation process, your hospital should identify systems,
applications, interfaces, and business areas posing the greatest risk to the ICD-10 implementation
effort. Once the major risk areas have been identified, assess their likely impact, and discuss strategies
to minimize overall risk.
Table 10 provides a generic impact assessment of business areas commonly found in small hospitals.

Table 10: Hospital Business Impacts
BuSINeSS AReA & ASSoCIATeD FuNCTIoNAL RISKS & PReVeNTIVe ACTIoN

IMPACT AReAS
Information Systems • Core health information • Risk: Limited access to patient data and test results and
systems scheduling challenges
Very High
• EHR, billing, clinical, coding • Preventive Action: Update systems to support patient
systems flow processes and background operations and execute
comprehensive testing
• Vendor management
Finance/Revenue • Admissions & registration • Risk: Increase in A/R days, claim denials, and lost or deferred
Cycle revenue
• Scheduling
Very High • Preventive Action: Create mitigation plans to address billing
• Contracting delays, denials, coding error rates
• Billing, A/R days
Medical Records/HIM • Coding • Risk: Increase in coding turnaround time after initial ICD-10 go-
live
Very High • Physician chart completion
• Preventive Action: Develop response to new information
demands
Clinical • Physician orders/clinical • Risks:

documentation – Clinicians may resist providing more detailed documentation to
Very High
• Results reporting support coding for increased ICD-10 data analysis, leading to
need for more queries to physicians
• Nursing care
– Terminology changes will significantly affect coder interpretation
of clinical record and could be confusing to clinicians
• Preventive Actions:
– Proactive education on the value of the enhanced definitive
terminology of ICD-10
– Develop an implementation strategy that includes collaboration
between coder and clinicians
Quality • Clinical benchmarking • Risks:

High • Performance improvement – Data analysis may be disrupted, especially quality data and
historical trends
• Risk management
– Substantial potential impacts to coding productivity and coding
• Infection control quality
• Payment initiatives • Preventive Actions:
– Develop a strategy for mapping historical data to ICD-10
conversion
– Plan for sufficient coder training and transition time to minimize
any productivity loss

Table 10: Hospital Business Impacts continued
BuSINeSS AReA & ASSoCIATeD FuNCTIoNAL RISKS & PReVeNTIVe ACTIoN

IMPACT AReAS
Ancillary Support • Surgery • Risks:
Moderate • Behavioral health – Changes in terminology may affect clinician rationales for
ordering tests and procedures
• Lab, radiology, pharmacy,
cardiology, therapies – Changes in interfaces for ICD-10 from main HIS to any ancillary
system
• Other ancillary
– Plan for adequate physician training and orientation to the
improved and more descriptive terminology of ICD-10
– Plan and develop a strategy for adequate system testing
Research • Research • Risks:

Moderate • Clinical trials – Potential disruption in data due to mapping from ICD-9 to ICD
10
– Significant effect on trending comparability and other time-
based comparative analysis methods during the transition
period
• Preventive Action: Develop strategy for mapping historical data
and analyzing information
Administrative • Medical staff • Risks:

Low – Documentation and requirements and increased physician
querying may adversely affect physician relationships
– Definition of procedure-specific credentialing and privileges may
be affected
– Plan for adequate training and orientation that includes
physician/staff collaboration
– Plan a strategy that includes communication with credentialing
and privileges staff on any transitions to ICD-10 terminology
and enrollment requirements
As discussed in the section on business processes affected by ICD-10, your hospital will need to
conduct its own impact analysis. The following sections will detail the general business areas and their
components common to most small hospitals.
Patient Flow and Revenue Cycle

ICD-10 will affect a number of processes associated with patient flow through the hospital as well as
the revenue cycle, which is driven by data associated with various aspects of that patient flow.
Table 11 discusses major processes in this area potentially impacted by ICD-10.

Table 11: Patient Access/Finance/Revenue Cycle Impacts
PRoCeSS SuB-PRoCeSS DeFINITIoN ICD-10 IMPACT

Patient intake • Scheduling Process of registering new • Update patient registration
or existing patients with the process to accommodate
• Referral hospital, including scheduling, ICD-10 codes
• New patient registration, and initial health
history. • Update decision support
• Established patient system business rules to
Hospital Scheduling: process capture ICD-10 codes
• Eligibility of planning appointments and
processing referrals. • Capture clinical
• Scheduling requests documentation
• Encounter definition Patient Registration: process requirements to support
of receiving forms from ICD-10
• Domain-specific IT patient.
• Update existing business
• Registration Initial Health History: policies to determine
includes data and notes from coverage (deductibles,
• Contract information a patient’s previous medical copays)
• Family relationships, roles, visits, including any patient
observations provided to the • Update business policies
and responsibilities to determine patient
physician.
eligibility for dual eligibility/
Supplemental Security
Income (SSI)/Coordination
of Benefits (COB) for
special clinical programs
including end stage renal
disease and black lung
disease
• May affect triage routines
Referral Not applicable Recommendations from a • Update referral process

primary care or other physician to accommodate ICD-10
to see any practitioner or codes where appropriate
specialist.
• Capture clinical
documentation
requirements to support
ICD-10
Authorization Not applicable The process of obtaining • Update authorization

permission from a managed process to accommodate
health plan for routine ICD-10 codes
inpatient hospital admissions
or outpatient therapy. • Capture clinical
documentation
requirements per ICD-10
• Test with payers wherever
possible to avoid
experiencing problems
processing authorization
under ICD-10
Pre-admission • Health Status Assessment The process of gathering • Update pre-admission

as much information as process to accommodate
• Insurance and eligibility possible to streamline both ICD-10 codes for such
updates administration and patient things as admission
care upon admission. encounter interface
transactions

Table 11: Patient Access/Finance/Revenue Cycle Impacts continued

Initial health history • Past history The assessment of the • Update data input
patient’s health state and prior to accommodate
• Medication history medical history. documentation to support
• Current medication ICD-10 coding
• Allergies
• Problem list
• Recent studies
Admissions • Patient intake and The process of patient intake • Identify patient’s health
registration systems to the hospital care system. state upon admission
(including admitting
• Insurance and eligibility diagnosis)
updates
• Identify pre-existing
• Determine power of conditions upon admission
attorney (POA)
• Identify reasons for
admission using ICD-10
codes
• Encounter transactions
• Identify planned inpatient
procedures
Clinical • Patient history Assessment and care delivery • Update data input to
in the hospital environment. accommodate ICD-10
• Problem lists codes
• Medication history • Update templates
• Current medication and other clinical
documentation interfaces
• Allergies to support ICD-10
• Patient examination documentation
• Treatment services • Re-evaluate potential

documentation and logic
changes for:
• Clinical protocols
• Nursing care plans
• Reasons for orders
• Order interface
transactions
Discharge • Medical record coding The process of ensuring that • Update to support ICD-9
the patient’s transition out of and ICD-10 code capture
• Discharge diagnoses the hospital environment is definition and display
• Bill creation safe and supportive.
• Re-evaluate templates
• Coverage determination and documentation
requirements to support
• Scheduling ICD-10
• Discharge instructions • Update to support ICD-10
• Rules/algorithms based groupers
• Evaluate potential impact
on discharge instructions

Table 11: Patient Access/Finance/Revenue Cycle Impacts continued

Post-discharge • Condition-driven follow up Engagement with patients to • Identify patients who
verify that post-discharge care are candidates for post
• Patient information and is progressing as planned. discharge support
follow-up care
Billing/Financial Systems • Charge masters The process of managing the • Update to support ICD-10
entire reimbursement revenue based groupers
• DRG and other payment- cycle to ensure appropriate
related groupers reimbursement for services • Update charge masters and
delivered. all other financial systems
• Bundled payment systems to support ICD-10
• Billing IT systems • Update all denial
• Initial billing management processes
due to the risk of significant
• Re-billing increases in denials and
• Payment reconciliation changes in the adjudication
rules
• Denial management
• Payment appeals
Medical Records/Health Information Management

ICD-10 will greatly impact your hospital’s medical records department. All processes dealing with
medical records will need to be investigated to determine the extent of the ICD-10 transition’s effects.
Table 12 describes the impact of ICD-10 on the medical records department.
Table 12: Medical Records Impacts
PRoCeSS SuB PRoCeSS DeFINITIoN ICD-10 IMPACT

Medical Records • Clinical documentation The business area responsible • Update medical records
for ensuring that all relevant systems used by
• Templates and forms information about the patient’s physicians, including forms,
• Electronic Health Record health state and services templates, interfaces, and
systems delivered to improve or decision supports
maintain that health state
• Coding is complete, accurate, and • Train staff on clinical
available. documentation
• Encoder/grouper tools requirements per ICD-10
• Expect productivity to be
affected for four to six
months following ICD-10
implementation

Quality
Quality metrics have become increasingly important in contracting and payment decisions. The ICD
10 implementation will dramatically change quality metrics in ways that are difficult to predict since
there has been no historical experience with these codes in the United States. ICD-10 implementation
will change measures of health care based solely on coding changes, not necessarily on any change
in the actual delivery of services.
Consider the following factors when looking at quality measures during the ICD-10 transition period:
1. Changed code definitions may result in an apparent change in treatment behavior, when actually
the change is only in the definition of the code.
• For example: “Acute myocardial infarction” is defined in ICD-10 with a duration of four weeks
as compared to eight weeks in ICD-9. The definition of “subsequent” in ICD-9 refers to a
subsequent episode of care where in ICD-10 the term “subsequent” refers specifically to a
subsequent myocardial infarction.
2. Crosswalking efforts will result in inaccurate translation in a significant number of cases since
there is not an exact match between ICD-9 and ICD-10.
3. The ability to consistently measure the quality “intent” is unknown because there is no historical
basis with ICD-10 codes.
4. The nature of a number of diagnoses and procedures cannot be defined in ICD-9 with the amount
of specificity and level of detail as can be provided with ICD-10.
• For example: If a patient had two successive wrist fractures, in ICD-9-CM each injury would be
assigned the same code (814.00) not identifying specific information about each injury. With
ICD-10 however, the codes used will provide specific details including: initial or subsequent
encounter, if subsequent encounter, the cause (delayed-healing, malunion, non-union), the
exact bone(s) that are fractured, the side of the body where the fracture is located, whether
it is a non-displaced or displaced fracture, and whether it is a closed or open fracture.
5. Benchmarking and trending measures will be difficult to determine during the transition period
based on the factors noted above.
These considerations should be factored into any contracting or pay-for-performance payment models
that may be considered during the next several years.
Analytics and Research

ICD-10 will affect your hospital’s research activities. Evaluate all processes dealing with research or
clinical trials to determine how the ICD-10 transition will affect them.
Table 13 identifies how ICD-10 may affect research activities in your hospital.

Table 13: Research Impacts
PRoCeSS SuB-PRoCeSS DeFINITIoN ACTIoN STePS To

ADDReSS IMPACT
Data warehouse processes • Data architecture Input, storage, and output of • Update all code reference
data to support all operational tables to support both
• Data aggregation models and analytic business ICD-10 and ICD-9 with
• Crosswalk structure functions. date of service and date of
discharge validation rules
• Data validation
• Educate IT and analyst staff
• Data dictionary and data
file specifications • Update file specifications
• File imports • Update data dictionaries
• File export • Update data validation
• System data access • Update input and output

interfaces data rules
Analytic interface • Dashboards User system interfaces that • Update all aggregation
provide information used to intelligence built into
• Other aggregation or analyze business processes. interfaces to ensure proper
individual code system reporting due to the
displays increased level of detail in
ICD-10
• Update all documentation
and support materials for
ICD-10
• Test all analytic solutions
Report definition • Standard reports Reports delivered by data • Update existing data
warehouses and data warehouse and data mart
• Ad hoc reports marts for accounting and interfaces and reports with
receiving, prescription volume, ICD-10 codes
categories of illness and
treatment, and malpractice. • Train staff
Trend analysis • Identification of data Analysis of data over time. • Update existing interfaces
sources to be analyzed and reports with ICD
10 codes and ensure
capability to capture
increased level of detail for
trend analysis
Crosswalks/mapping • Reporting Diagnosis code/service-driven • Establish how to

ICD research used to support incorporate data searches
• Analytics research and evaluate trends. for specific diseases/
• Trend analysis grouping across the ICD-10
implementation date
Clinical trials Includes internal clinical • Patient eligibility for

research or contracting programs may vary based
with drug companies to on ICD-10-CM codes
administer and report on
patient responses and external
research conducted by
clinicians who are part of a
university- or hospital-based
research project.

Medical Staff Functions
ICD-10 will affect administrative functions in your hospital. Use Table 14 to determine the level of ICD
10 impact.
Table 14: Administration
PRoCeSS AReAS DeFINITIoN ICD-10 IMPACT

Medical staff • Hospital-based Administrative tasks • Possible impact on procedure-specific
functions concerning hospital-based credentialing and privileges
• External staff physicians and external
medical staff. • Medical staff may have grievances
• Medical director about documentation requirements and
• Physician credentialing increased physician querying
• Physician recruitment
• Assignment of
physician privileges
Information Systems
Information systems support the processes identified in previous sections. There will be major ICD
10 impacts on many of these systems, including updates to all the components listed in Table 15.
Additionally, you will need to establish mapping tools for cross-implementation date analysis.
Table 15 shows the information systems affected by ICD-10, including:

• Business Area: The business area affected by ICD-10
• Systems that Require updating to ICD-10: The systems within the business areas that are
affected by ICD-10

Table 15: Information Systems Impacts
BuSINeSS AReA SySTeMS THAT ReQuIRe uPDATING To ICD-10

Finance/revenue • Main health information systems (HIS)
• Admissions/discharge/transfer and registration modules
• Readmission business logic
• Authorization modules
• Encounter, orders, and results interfaces
• Charge transactions
• Billing and accounts receivable
• Electronic data interchange (EDI) transactions
Health information management (HIM) • Groupers and encoding software

• Abstracting software
Quality • Risk management software

• Quality system software
• Infection control software
• Case/utilization management software
• Quality reporting
Clinical • Clinical documentation templates including problem lists and physician notes
• EHR, including business rules and alerts
• Nursing documentation templates
• Order entry and order sets, including interfaces
• Results interfaces
Research • Databases and data marts

• Business rules
• Search algorithms for disease groups
• Mapping tools for cross-implementation date analysis
Ancillary support • Ancillary system databases, including cardiology, radiology, and laboratory
• Encounter, order, and result interfaces
• Charge transactions
Figure 6 presents a high level systems diagram depicting potential impacts of ICD-10 on a generic
hospital information system. The diagram highlights key data inputs, such as hospitals, clinics, and
physician offices, in and out of network. The diagram captures data flow to and from major processing
modules and key files within the hospital information systems and modules. It also displays key
outputs including billing, health information, and results. An ICD symbol indicates potential ICD-10
impacts and ICDT refers to a text or paper file containing ICD-10. The diagram is meant as a general
representation and not the actual environment for every small hospital.

Figure 6: Hospital Information System Diagram Paper Chart for Paper Chart for Physican
Inpatient Records Ofﬁces (In & Out of Network)
ICD ICDT ICD ICDT
Encounter Info, Results Encounter Info, Results

ICD ICDT ICD ICDT
Physician Third Party Hospital Information System (HIS)

Hospital
Practices Payers Charges
ICD Administrative/Financial Applications Clinical Applications
Scheduling REG ADT HIM SCH MPI Bill/AR Pt. Care OE Lab OR Rx RAD Results EMR CARD Diet Therapies
Info ICD ICD ICD ICD ICD ICD ICD ICD ICD ICD ICD ICD ICD ICD ICD
ICDT
Referral ADT, Rx Health Systems Data

ADT. REG.
Authorization OR, Quality ICDT
ICD Coding
ICD ICD
ICD Orders,
Research Database
Medical Schedule Results Pyxis Warehouse
Order Auth. ICD ICDT
ICD
ICDT
Transciption
Dictation Service
Interfaces ICDT ICDT
Orders, Referrals, ICD ICDT
Schedule
ADT Rehab
Professional Facility
Charges ICD
ICDT ADT. Orders,
Results ADT, Orders,
ICDT Results
Hospital System ADT or ABS
ICD ICD System Notes:
Behavioral • This is a high level representation of an HIS
ADT Coding
Patient ICD • Hospital Charges use ICD codes
ICD ICDT Ancillary System
Intake ICD ADT, BAR (e.g., Lab, Radiology) • Professional and Outpatient charges use
ICD ICDT ICD
Demographics, Quality CPT codes
Encounter Info,
Orders, Auth. ICD • Encounters use ICD Codes
ICD
ICDT • Medical Orders and Results use ICD Text or
ICD
Orders, Referrals, ICDT Encoder, codes
Schedule DRG
ICD
Key:
Physician Ofﬁce Network Hospital HIS System or Module
Finance
Data Warehouse
ICD Non-HIS Vendor System or Module
Medical Emergency
EMR Order Department
ICD ICDT ICDT
Report/Hard Copy Document
Hospital ERP Systems Internal Entity
ICD
ICD-10 Implementation Guide for Small Hospitals

Department
Billing &
External Entity
41
Scheduling Authorizations
ICD ICD Clinic ICD ICD Coded Field Impact
GL HR MM ICDT ICD Text (or hard copy) Impact
Source: Noblis, Inc.

To determine the technical impacts of ICD-10, develop or consult a complete inventory of your
organization’s internal and external systems and applications. Here is a partial list of systems that will
need updates:
• Business rules and system edits
• Data structures, tables, and decision support systems
• System interfaces (inbound and outbound). Pay special attention to ADT, Order Entry, and results
transactions as these key interfaces may include ICD-10 codes passed among your systems
• User interfaces
• Reports
• Field length adjustments
• Storage systems to allow additional ICD-10 occurrences within a transaction
Additionally, your systems may require updates in order to support the collection and maintenance of
both ICD-9 and ICD-10 and to maintain historical data.
• Maintenance of historical data submitted
Once your inventory is complete, you will also need to conduct a present and future needs analysis to
identify technical requirements necessary to support ICD-10 implementation.
How ICD-10 Affects Clinical Documentation

The ICD-10 implementation will impact clinical documentation for your hospital. ICD-10 coding
introduces accurate representation of health care services through complete and precise reporting
of diagnoses and procedures, and specific data for clinical decision-making, performance reporting,
managed care contracting, and financial analysis.
Increased code detail contained in ICD-10-CM means that required documentation will change
substantially. ICD-10-CM includes a more robust definition of severity, comorbidities, complications,
sequelae, manifestations, causes, and a variety of other important parameters that characterize the
patient’s condition.
A large number of ICD-10-CM codes only differ in one parameter. For example, nearly 25 percent of
the ICD-10-CM codes are the same except for indicating the right side of the patient’s body versus the
left. Another 25 percent of the codes differ only in the way they distinguish among “initial encounter,”
versus “subsequent encounter,” versus “sequelae.”
For example, even though there are more than 1,800 available codes for coding fractures of the radius,
there are only approximately 50 distinct recurring concepts. Table 16 shows the type of documentation
the ICD-10-CM will require for a fracture of the radius and includes the following:
• Category: The category for the medical concepts that will need documentation
• Documentation Requirements: The list of individual concepts that should be considered in
documentation to support accurate coding of the patient conditions

Table 16: Sample Documentation Requirements for Fractures of the Radius
CATeGoRy DoCuMeNTATIoN ReQuIReMeNTS

Fracture type • Open
• Closed
• Pathologic
• Physeal (Growth Plate) Fractures
• Neoplastic Disease
• Torus (Buckle) Fractures
• Green Stick Fractures
• Stress Fractures
• Orthopedic Implant (fractures associated with)
• Bent Bone
Healing • Routine
• Delayed
• Nonunion
• Malunion
Localization • Shaft
• Lower End
• Upper End
• Head
• Neck
• Styloid Process
encounter • Initial
• Subsequent
• Sequelae
Displacement • Displaced
• Nondisplaced
Classification • Salter Harris I

• Salter Harris II
• Salter Harris III
• Salter Harris IV
• Gustilo Type I or II
• Gustilo Type IIIA, IIIB, or IIIC
Laterality • Right
• Left
• Unspecified Side
• Unilateral
• Bilateral

Table 16: Sample Documentation Requirements for Fractures of the Radius continued
CATeGoRy DoCuMeNTATIoN ReQuIReMeNTS

Joint Involvement • Intra-articular
• Extra-articular
Fracture Pattern • Transverse

• Oblique
• Spiral
• Comminuted (many pieces)
• Segmental
Named Fractures • Colles’

• Galleazzi’s
• Barton’s
• Smith’s
How ICD-10-PCS Affects Clinical Documentation

The ICD-10-PCS codes represent a different model with new terminology built into the definitions. Unlike
ICD-10-CM codes, ICD-10-PCS codes generally are not combination codes, but rather identify distinct
parts of an operation. For example, a single code in ICD-9 that defines a bunionectomy, soft tissue repair
and osteotomy, will require three codes in ICD-10-PCS, one for each component of the procedure. In
most cases, operative reports should have the documentation required to document an ICD-10-PCS in
compliance with the required level of detail for a procedure. Documentation that lacks this level does not
adhere to best practice standards.
The proper use of ICD-10 codes with ICD-10-PCS terminology changes what information is needed
from the medical record. Professional coders may find it difficult to use existing documentation models
to assess proper coding. For example, if a surgeon dictates in an operative report that he “removed the
left upper lobe of the lung” the coder must recognize that the proper code would include a “resection”
of the “left upper lobe.” The coder must recognize that the “left upper lobe” is a complete body part in
ICD-10-PCS and that removing a complete body part is defined as a “resection.” The term “removal”
now applies only to removing synthetic materials.
ICD-10 Effects on Small Hospital Reimbursement

The transition to ICD-10 will result in changes to most hospital reimbursement models. The nature of
these changes will vary based on each hospital’s individual contracting arrangements. To identify the
impact of revenue, begin by evaluating:
• The current denial process
• The current MS-DRG performance
• Two key thresholds under ICD-10, “Discharge, not final code” (DNFC) and “Discharge, not final
billed” (DNFB)

Table 17 identifies potential affects to hospital reimbursement that should be considered depending
on existing contracting and reimbursement models.
Table 17: How ICD-10 Affects Hospital Reimbursements
CoMMoN ICD-10 IMPLeMeNTATIoN PoTeNTIAL AFFeCTS

ReIMBuRSeMeNT
ARRANGeMeNTS
DRGs and other case • ICD-9 diagnosis and procedure codes are the basis for DRG classifications. The process of redefining
rates the MS-DRG grouper for ICD-10 resulted in changes in the grouper logic that may lead to unanticipated
mapping errors as compared to the ICD-9 grouper experiences.
1. The ICD-10-based MS-DRGs will likely produce different reimbursement results compared to ICD-9
based MS-DRGs due to:
a. Potential changes in coding due to new guidelines and code definitions
b. Potential coding accuracy challenges due to unfamiliarity of coders with these new codes
c. Mapping challenges
d. Changes in Complications Comorbidities/Major Complications Comorbidities (CC/MCC) assignment
may be different in ICD-10 and result in varying payment compared to similar conditions and services
in ICD-9 codes
2. When applying CMS-designed ICD-10 MS-DRGs to a commercial population, MS-DRG assignment
(i.e., case mix) may vary more than in a Medicare population.
DRGs/Inpatient care 1. Significant impact on inpatient coding due to changes in the definitions of inpatient procedures. There
rate carve-out, pass- are also rule changes for processing that may look at both diagnoses and procedure codes.
through or add-on
technology procedure 2. Outpatient Procedures (OP) are reimbursed based on Common Procedure Terminology (CPT) codes
or diagnosis (where additional information is not needed to pay a claim). Diagnoses carve outs are typically paid by
broad category with little reliance on coding specifics to differentiate payment levels.
episode-based 1. Episode grouper logic will need to be totally rewritten. There is no historical data to test grouping
reimbursement (used baselines, so possibly reliable groupers for native ICD-10 may not come out until 2015.
in demonstrations
(ACe – Acute Care
episode) & other pilots)
Performance-based 1. Lack of comparability across codes will complicate reporting from historical data stores that contain
reimbursement both ICD-9 and ICD-10.
2. Trending measures will be problematic since similar performance may result in different measure values
based on ICD-9 versus ICD-10 codes.
Hospital-billed charges 1. Rev codes, CPT, HCPCS and other outpatient-related codes are not directly affected by the transition
to ICD-10; however, linkage to ICD-10 codes may factor into payment determination based on payer
medical policy, adjudication rules, and benefit determinations.
2. Future payments under value-based accountable care models are likely to leverage the increased
severity identification in ICD-10 codes to adjust traditional fee-based models.
Inpatient rehabilitation 1. Diagnosis codes are used to help determine the payment rate and whether facilities qualify as inpatient
facility prospective rehabilitation facilities (IRFs).The initial conversion to ICD-10 will have some effect on reimbursement
payment based on the IRF-Prospective Payment System (PPS). The challenge will be in determining which ICD
10 codes are the qualifying codes that should be included in the IRF logic.
2. The increased specificity of ICD-10 will influence the IRF-PPS model in the future.
other reimbursement 1. Resource Utilization Groups: Minimal if any impact on Skilled Nursing Facilities (SNFs) and Resource
arrangements Utilization Groups (RUGs).
2. Home Health Resource Groups (HHRG): Although many of the HHRG diagnostic categories are broad,
there will be some instances where HHRG assignment for the same condition may vary under ICD-10
compared to ICD-9 diagnosis codes.

Methodology to Evaluate ICD-10 Vendors and Tools
Any outside vendor your hospital uses plays an important role in a smooth transition to ICD-10.
Hospitals depend on vendors to upgrade their systems, modify their existing programs, or provide
support during the ICD-10 transition. Take time to evaluate upfront the impact of ICD-10 on your
vendors, their performance capabilities, and their plans to update systems for ICD-10.
The following steps are important in both selecting new vendors as well as evaluating existing vendor
capabilities in light of the ICD-10 transition.
1. Create an inventory of existing vendors, tools, and possible vendor candidates. The inventory
should include the following components:
• Unique identifier for the vendor
• Vendor corporate name
• Vendor products names
• Description of the products offered
• Type of products offered, including coding applications, search engine, and crosswalking
tool
• Products’ underlying logic, including GEM and terminology engines
• List of customers for each product
• Vendor contact information
2. establish a tracking system to ensure that you address and monitor key questions, concerns,
and that the vendor meets project timelines.
3. Identify “Plan B” options in case your vendor does not progress fast enough, including
operational work-arounds and vendor replacement alternatives.
4. Review contracts to clarify existing vendor contractual requirements, and factor key requirements
into contracts with new vendors.
5. Analyze interfaces or dependencies between systems to avoid failures from cross-system
dependencies.
6. Define acceptance criteria to measure vendor performance. These may include the following:
• Features matched to your business needs (this assumes a process to prioritize these features
to meet the organization’s specific functional priorities)
• Appropriate customer lists and references
• Comparable industry experience
• Vendor financial and longevity stability
• System architecture that supports integration with other systems and provides easy access
• Alignment of workflow interfaces with organizational workflow
• Expected results to testing against defined business and data test scenarios
• Acceptable ongoing support commitments

7. ensure that vendor capabilities meet your organization’s expectations. Your contracting
processes should consider:
• Functions of all required features
• System performance requirements
— Concurrent users
— Throughput
— Processing time
— Reporting time
• Upgrade policies (number of versions supported or latest version supported, along with
number of upgrades per year)
• Error remediation and new feature response requirements
• Support requirements
— Degree of support
• Expected response time
• Clear and acceptable licensing agreements
— Favored Nation status
— Business associate and data use agreements
— Coverage for federal mandate changes
— Updates for standards version changes
• Remedies in the event of failure
— Remediation requirements
— Penalties
— Disaster recovery requirements
— Data and concept ownership
Assessing Vendor Functional Capabilities

Assuming you have assessed the functional needs of your hospital, you should match those needs
with vendor capabilities. The list below identifies key functions to consider when evaluating vendors
as well as questions to ask vendors in the evaluation process.
• Code set maintenance — Notification of updates, data files maintain valid begin and end dates
and change maintenance, and value add fields
• Ability to search for codes
— Robust term-based search: The ability to search for codes based on terms defined within
the code description. Includes the ability to search for multiple terms, partial strings with wild
card and nested ‘and’, ‘or’ and ‘not’ logic.

— Code-based search: This includes the ability to search by multiple code ranges as well
as multiple individual codes. It should also support partial code searches or searches for
characters in different positions. For example the ability to search for codes with the first
three characters = ‘nnn’ and the 7th character = ‘n’.
— Tabular-based search: The ability to search for codes based on the published tabular index.
— Alphabetical index search: The ability to search for codes based on the published
alphabetical index.
— Concept-based search (evolving vendor capability): The ability to search based on clinical
concepts, for example, the concepts of “fracture,” “distal,” and “radius” and identify codes
for “Colles,” “Smith’s,” and “Barton’s” fractures since these are fractures of the distal radius.
This search ability requires considerable sophistication in the underlying data engine. Current
vendor ability to support this level of concept searching appears limited.
• Code Crosswalking – Crosswalks provide important information that help link codes of one
system (ICD-9) with another (ICD-10). Vendor systems should have features to develop, maintain,
and document crosswalk specification development, including the following:
— Workflow: The ability to support the workflow involved with defining the crosswalk, approval,
output, maintenance, and governance. The workflow should support the selection of one or
more codes in the crosswalk from any search method or from candidate codes from either
GEM or reimbursement maps.
— A robust search engine: The ability to effectively search for a code based on a robust set
of search criteria. A level of search engine sophistication is needed to provide support to
independent research of crosswalk candidates.
— Reimbursement map support: The ability to demonstrate mapping as defined from ICD
10 to ICD-9 in the reimbursement files. This will provide a comparison in ICD-10 to ICD-9
mapping to those crosswalks reported to maintain revenue neutrality.
— GeM support: The ability to identify GEM-based matches in both directions. This should
include the ability to identify codes where ICD-9 or ICD-10 codes are either the ‘source’ or
‘target’ of the crosswalk, or both.
— Crosswalking quality (ideal vendor capability): The ability to provide measures of the
quality of the match based on concepts that are lost or assumed in the match. Currently there
do not appear to be any vendors that can rate the quality of the match in definitive terms.
— Crosswalking financial modeling (evolving vendor capability): The ability to test the
financial implications of the crosswalked code on payment as well as the volume and extent
of claim impacted by the crosswalk.
• Definition of code set aggregation or grouping – Most policies, rules, and analytics are based
on groups or categories of codes. These groups of codes are critical to drive business intelligence
and business decision algorithms for many health care information systems. Features necessary
to support this effort of redefining code based policies, rules, and categories include the following:
— Code set aggregation database system: The ability to support an unlimited number of
aggregation schemes and ad hoc aggregation sets for selected purposes. The database must
support appropriate metadata for each aggregation set and scheme. In other words, once you
create and define groups of codes, there must be a way to manage and retrieve those groups

for any number of purposes. The metadata needed to accomplish this include:
• A name for the aggregation or set of codes
• A definition of the intent of the code set
• A unique identifier for the code set
• Data about versioning, modification, access, and approval
• Other metadata as needed that will help manage create, read, update, and delete
function for the code set files
— Workflow: Workflow capabilities should include research and identification of the appropriate
grouping of codes, an approval process and maintenance interface, and the ability to name,
date, and apply other metadata to the set of codes for use in downstream analysis and
algorithms. Some basic workflow steps might include:
• Definition of the purpose and intended uses of the code set
• Searching for the appropriate codes to include or exclude in the data set by terms,
concepts, tabular listings, index listings, code value searches, or any number of other
parameters
• Naming and cataloging the code set for use in rules, policies, and analytic categories
• Creating the link between these defined codes and rules, policies, and categories
• Retrieval and modification of existing code sets
• Approval processes
— Analytics: Analytics that use ICD procedure and/or diagnosis codes will change dramatically
under ICD-10. Any software vendors that provide business intelligence solutions should
support ICD-9 and ICD-10 codes simultaneously during the transition. Additionally, business
intelligence schemas should support ‘n’ number of ICD codes per record with a definition of
code type (ICD-9 or ICD-10). Any defined reporting models such as quality (HEDIS), efficiency
(episode groupers), population risk models or other aggregation schemes should be fully
remediated to support native ICD-10 as well as native ICD-9 codes.
• Considerable research will be required to ensure that defined categorization models
are appropriate for both the ICD-9 and ICD-10 environments. There should be a clear
definition of the plan for fully using ICD-10 analytic capabilities in future releases.
— Database structural requirements:
• Will the database support the increased number of codes supported in the 5010 claims
transition?
• Will the database support both ICD-9 and ICD-10 codes simultaneously?
• Does the database include a “Code Type” field that can distinguish between ICD-9
and ICD-10 codes?
• How will code set updates be managed? (An initial code freeze will be effective until
October 1, 2014, but updates will occur after this date.)

— user interfaces:
• Have captions and field validations been updated to support ICD-10?
• Have user interface data sources for ICD-9 and ICD-10 been updated?
• Are there prompts and edits for date of service-based validation of ICD-9 and ICD-10
codes?
• Will user interfaces support lookup and entry of both ICD-9 and ICD-10 codes?
• How will user interfaces support the new documentation required for ICD-10 coding?
— Inbound and outbound transactions:
• Has the vendor updated system support for outbound claims and other outbound
transactions consistent with 5010 and ICD-10 standards, including date of service-
based validation?
• What is the vendor’s plan for transaction testing across payers and other trading
partners?
— Internal system interfaces:
• Have interfaces between systems been updated to support ICD-10?
— Clinical decision support (CDS) and business rules:
• If clinical decision support systems are in place, what is the plan to update CDS logic?
• Which other rules and edits are driven by ICD-9 and what is the plan for remediating
those rules?
— Measures and reporting:
• Which reports are affected by ICD-10 and what are the plans for updating reporting
logic code-related categories?
• If clinical reporting systems are used, how will vendors update these systems?
• How will vendors update logic for quality and efficiency measures?
• How will vendors handle reporting on historical data over the transition period?
• other key questions for your vendor:
— Beyond assessing functional capabilities, there are some additional questions to ask your
vendor:
• Will there be a charge for ICD-10-related updates?
• Will training be provided for new ICD-10-related functionality?
• How can issues be logged and how will they be addressed?
• How often will code set updates occur and how will they be delivered?
• Will you continue to support applications or are you discontinuing some products in
the wake of the ICD-10 transition?
• What is your roadmap for helping us extract the increased information capabilities
of ICD-10?

Scenario-Based Vendor Assessment
Simply asking your vendors about implementation planning and execution is not enough to prevent
system failures during the ICD-10 transition. As a hospital, you need to develop clinical test scenarios
to see how the system will work and to ensure that you get the results you need for your quality-of
care and business-efficiency standards.
Steps in developing scenarios for vendor assessment:

1. Review existing hospital data to identify high-volume and high-revenue clinical areas. For
example, if your hospital sees a high volume of patients with renal conditions, look at the
typical procedures and activities associated with those patients.
2. Review the relevant codes in these common clinical areas to identify significant changes
between ICD-9 and ICD-10 that could result in issues with coding or translation.
3. Create fictitious patient encounters in these areas. Include sufficient documentation to code
and create claims for these encounters.
4. Based on these defined scenarios, walk through all typical system operations, including:
• Patient assessment
• Documentation
• Patient communications
• Clinical decision processes
• Referrals
• Authorizations
• Diagnostic and treatment orders
• Internal and external scheduling
• Eligibility
• Data sharing
• Billing - Claims
• Payment
• Reconciliation
• Analysis
• Quality measures
• Other important functions of your hospital’s operations
5. Identify all of the areas where the transition from ICD-9 to ICD-10 has implications and the
document requirements for successful transition.
6. Run these scenarios using documentation, codes, claims, and other artifacts to test each of
your vendor’s abilities to support your hospital.

Implementation Phase
Once you have completed the assessment of your hospital’s ICD-10 transition needs and you have
planned for the tasks required to complete this transition, the next step is to determine what changes
you need to make to your operations and systems in order to limit business risks and take advantage
of opportunities.
Most hospitals depend on their vendors to provide support for the ICD-10 transition. However, you
should not assume that your vendors would address the effects of the ICD-10 implementation on key
functional areas, including:
• Patient registration
• Clinical documentation/health records
• Referrals and authorization
• Coding
• Order entry
• Billing
• Reporting and analysis
• Other diagnosis-related functions, depending on the nature of the hospital
You must verify that the vendors you depend on are prepared to meet your critical ICD-10 transition
needs.
operational Implementation Activities

The operational implementation strategy you developed earlier during the assessment phase provides
direction for the operational implementation activities. The strategy addresses the method and
approach to actually implementing ICD-10 within your organization. This strategy also addresses the
methodology the hospital has selected for mapping ICD-9 codes to ICD-10 codes and the reverse.
The operational implementation phase of the ICD-10 transition process will include the following
key activities:
• Determine your vendors’ capabilities to install their updated systems for ICD-10 by October 2013
• Coordinate update of internal policies affected by ICD-10
• Coordinate update of internal processes affected by ICD-10, including clinical, financial, actuarial,
and reporting
• Finalize system and technical requirements
• Coordinate update of identified test data requirements
• Coordinate update of approved code design to remediate system changes/updates
• Coordinate and conduct testing based on updated system logic

Resources Available to ease ICD-10 Transition
Table 18 below identifies some of the industry tools available to hospitals. Please note that the list is
not exhaustive nor does it indicate a partnership between CMS and any particular vendor.
Table 18 contains the following elements:

• Resource Name: The entity providing the tool (e.g., AHIMA, WEDI)
• Service(s) Provided: The services the tool or vendor provides
• Stakeholders: Stakeholders within the hospital that might benefit from the tool
Table 18: Industry Tools for Hospitals
ReSouRCe SeRVICe(S) PRoVIDeD STAKeHoLDeRS

Healthcare • Assists users in predicting the financial impact Health care providers and payer organizations
Information & of the ICD-10 transition.
Management Systems
Society (HIMSS) ICD • Developed in Excel. Helps users understand
10 Cost Prediction the impact of ICD-10 in four key areas: coding,
Modeling Tool revenue cycle, project management, and
information technology.
HIMSS ICD-10 • Provides a rich, well-structured index to a All stakeholders

Playbook variety of white papers and other resources
from a variety of organizations.
American Medical • A series of resources/artifacts to help Physicians, payer organizations

Association (AMA) physicians implement ICD-10-CM into their
– educational hospitals:
Resources
— ICD-10 Fact Sheets
— ICD-10 Project Plan Template
— ICD-10 Checklist
• Provides links to other associations and specific
resources tailored to physicians’ needs.
American Academy of • Compares ICD-9 to ICD-10 codes. (Note: this Medical coders
Professional Coders tool only converts ICD-10-CM codes, not ICD
(AAPC) – ICD-10 Code 10-PCS)
Translator
Workgroup for • Provides an assortment of white papers related All stakeholders

electronic Data to ICD-10.
Interchange (WeDI)
– Vendor Resource • Listservs and conference calls by various
Directory and other subject areas allow collaboration among
resources different parts of the industry.

General Equivalency Mappings (GEMs)
General Equivalence Mappings (GEMs) attempt to include all valid relationships between the codes
in the ICD-9-CM diagnosis classification and the ICD-10-CM diagnosis classification. The tool allows
coders to look up an ICD-9 code and be provided with the most appropriate ICD-10 matches and
vice versa. GEMs are not a “crosswalk” and are merely meant to be a guide. Users should exercise
clinical judgment when choosing the appropriate code or codes to map between ICD-9 and ICD
10 in either direction. GEMs are a very useful tool, but it is not a substitute for a complete system
changeover to ICD-10.
For most hospitals, GEMs will be of limited use and may not be appropriate since coding should occur
directly to ICD-10 based on actual clinical documentation, rather than a mapping from existing ICD-9
codes. In some instances, GEMs can be helpful in validating your coding practices to help identify
some codes in ICD-10 relative to existing ICD-9 for the purpose of training and validation. The ICD-10
codes will be increasing from approximately 15,000 ICD-9 codes to 150,000 ICD-10 codes, although
coders will not need to know every code. GEMs can be compared to a phone book, coders will not
use every number, but it is nice to know they are all there. Visit the CMS website at, http://www.cms.
gov/ICD10 for more information on GEMs.
Testing Phase
Testing—the process of proving that a system or process meets requirements and produces
consistent and correct results—is critical to successful implementation of ICD-10. Testing will ensure
ICD-10 compliance across internal policies, processes, and systems, as well as external trading
partners and vendors.
After making ICD-10 changes to systems, your hospital will need to complete several types of tests.
First, you may decide to complete individual components unit testing, system testing, and performance
testing. Many of these tests will be similar to ones performed for other IT changes.
Second, you will need to complete specific ICD-10 end-to-end testing as described in the ICD-10
Final Rule.
Table 19 provides testing considerations that are recommended in anticipation of ICD-10 testing and
includes test types, descriptions of the test, and key considerations.

Table 19: ICD-10 Testing Types
TeSTING TyPe DeSCRIPTIoN Key ICD-10 CoNSIDeRATIoNS

unit testing/basic Confirms that updates meet the requirements of • Unit testing should verify that:
component testing each individual component in a system. Hospitals
will first need to test each component updated for —Expanded data structures can store the
ICD-10. longer ICD-10 codes and their qualifiers
—Edits and business rules based on ICD-9-CM
codes work correctly with ICD-10
• Since reports frequently use diagnosis and
procedure codes, testing report updates are
critical. Critical report elements to evaluate
include:
—Input filters: Do all filters produce the
anticipated outcome?
—Categorization: Do categories represent the
user’s intent as defined by aggregations of
codes?
—Calculations: Do all calculations balance and
result in the anticipated values considering
the filter applied and the definition of
categories?
—Consistency: Do similar concepts across
reports or analytic models remain consistent
given a new definition of code aggregations?
System testing Verifies that an integrated system meets • Plan to test ICD-based business rules and
requirements for the ICD-10 transition. After edits that are shared between multiple system
completing unit testing, providers will need to components
integrate related components and ensure that ICD
10 functionality produces the desired results. • Identify, update, and test all system interfaces
that include ICD codes
Regression testing Focuses on identifying potential unintended • The complexity of ICD-9-CM to ICD-10
consequences of ICD-10 changes. Test modified code translation may result in unintended
system components to ensure that ICD-10 consequences to business processes. Identify
changes do not cause faults in other system these unintended consequences through varied
functionality. testing scenarios that anticipate risk areas.
Nonfunctional Testing Performance testing includes an evaluation of • A number of changes related to ICD-10
- Performance nonfunctional requirements4 such as transaction may result in significant impact on system
throughput, system capacity, processing rate, and performance, including increased:
similar requirements.
—Number of available diagnosis and procedure
codes
—Number of codes submitted per claim
—Complexity of rules logic
—Volume of re-submission due to rejected
claims, at least initially
—Storage capacity requirements
4 http://www.csee.umbc.edu/courses/undergraduate/345/spring04/mitchell/nfr.html

Table 19: ICD-10 Testing Types continued
TeSTING TyPe DeSCRIPTIoN Key ICD-10 CoNSIDeRATIoNS

Nonfunctional testing Federal and state legislation defines specific • Update the definition of these sensitive
privacy/security requirements for data handling related to conditions components or conditions based on ICD-10-CM
associated with mental illness5, substance abuse,
and other privacy-sensitive conditions. To identify • The definition of certain institutional procedures
these sensitive data components or conditions, that may fall under these sensitive requirements
payers often use ICD-9-CM codes. will be significantly different under ICD-10-PCS
Internal testing The ICD-10 Final Rule requires Level I compliance • Transactions should maintain the integrity of
testing. content as they move through systems and
processes
Level I compliance indicates that entities covered
by HIPAA can create and receive compliant • Transformations, translations, or other changes
transactions. in data can be tracked and audited
external testing The ICD-10 Final Rule requires Level II compliance • Establish trading partners testing portals
testing.
• Define and communicate transaction
Level II compliance indicates that a covered entity specification changes
has completed comprehensive testing with each
of its external trading partners and is prepared to • Determine the need for inbound and outbound
move into production mode with the new versions transaction training
of the standards by the end of that period. • Determine the need for a certification process for
inbound transactions
• Determine the process for rejections and re-
submissions related to invalid codes at the
transaction level
• Determine if parallel testing systems need to be
created to test external transactions
Test Plan Implications

Your hospital may use a test plan to document the strategy and to verify that a business process and
system will meet future design specifications. The test plan should do the following:
• Identify acceptance criteria based on the business and system functional requirements that were
defined during the analysis/design phase
• Determine the business sponsor responsible for approving the scope of test plans
Test Case Implications

Define test cases to ensure that the system updates meet your business requirements and that
the system components function efficiently. Test case design should include both anticipated and
unexpected outcomes. Test cases should also include high-risk scenarios.
Test Data Implications

Test data ensures that several key system functions are producing data as expected and include data to:
• Validate (data validation)
• Trigger errors
• Test high risk scenarios
5 http://www.dshs.state.tx.us/hipaa/privacynoticesmh.shtm

• Test volume
• Test all types of domains and categories
• Simulate a standard environmental model over time
• Test comparisons, ranking, trending variation, and other key analytic models
Error Testing
All testing will result in errors. Correcting the errors before the go-live date is the objective of the
testing phase. Hospitals should include the following in their error testing plan:
• Multiple testing layers to support various iterations of re-testing in parallel tracks
• Effective detection and repair of blocking errors that limit testing activities
• An error-tracking system with standard alerts to report to stakeholders
• Prioritization model for error remediation designed to focus on business-critical requirements
• Set of acceptance criteria
• Model for reporting known issues
• Developing a schedule for fixing known issues in the future
Internal Testing
Some larger hospitals develop and maintain internal systems that are not traditional commercial,
off-the-shelf products (COTS). In these cases, the hospital takes on the ICD-10 implementation
responsibility. Hospitals that choose COTS products should work directly with their vendor to monitor
the testing process for their system. When creating testing scenarios, consider all of the usual testing
requirements for any internal system undergoing significant architectural and system logic changes
and focus on testing key business risks. Evaluate each technical area individually as well as integration
testing across components including:
• Database architecture
• User interfaces
• Algorithms based on diagnosis or institutional procedure codes
• Code aggregations (grouping) models
• Key metrics related to diagnosis or institutional procedure codes
• All reporting logic based on diagnosis or institutional procedure codes
• Coordinate with your vendors as necessary to support testing execution and issue resolution.
Identify testing workflows and scenarios for your hospital that apply including use cases, test
cases, test reports, and test data
• Identify a target date when your hospital will be able to run test claims using ICD-10
• Develop a project plan that recognizes dependencies on tasks and resources and prioritizes and
sequences efforts to support critical paths

External Testing
Your hospital should create an inventory of external organizations with whom you exchange data and
work with each vendor to coordinate ICD-10 testing to ensure a smooth transition.
In some cases ICD-10 submissions can be tested in your hospital’s management software,
clearinghouse, and payers all using the same data set(s) using ICD-10 codes for:
• 5010 transactions
• Outbound claims
• Inbound transactions/claim responses with clearinghouses/payers
Examples of external testing areas include:

• Payers: Payers are critical to the financial viability of your hospital. Denials or payment delays
may result in a substantial decline in revenues or cash flow. Payers may struggle with the ICD-10
transition due to the significant system changes needed to support policies, benefit/coverage
rules, risk analysis, operations, and a host of other critical business functions affected by this
change. Payer testing should identify and resolve any issues prior to go-live.
— Determine if the payer has educational programs and collaboration efforts to support
providers through the transition
— Use the high dollar, high volume, high risk scenarios that your hospital has created to produce
test claims
— Work with the payers to look at end to end testing of your test scenarios through their systems
to identify payment results
— Communicate coding practices and scenarios to payers to build better relationships
throughout the testing and transition process
— Identify communication processes to identify and correct issues early with payers
• Physician offices: You will need to test your information exchange capabilities with physician offices
to ensure that condition-or procedure-related information exchange is handled appropriately.
• Health Information exchanges: Test all data exchanges to assure that information sharing
continues as expected.
• outsourced billing or coding: If your hospital outsources coding or billing, you will need to test with
these defined scenarios in order to make sure these business operations continue as expected.
• Government entities: Local and national government entities may require reporting for a variety
of purposes including:
— Public health reporting
— Quality and other metric reporting related to meaningful use
— Medicare and Medicaid reporting and data exchange
— Other mandated or contractually required exchanges of information around services and
patient condition

Transition Phase
Your hospital should develop a transition plan to monitor and track the ICD-10 implementation. The
transition plan should include a master schedule that details all the tasks that will occur within the
implementation. Figure 7 describes the method for developing and implementing a transition plan.
Figure 8: Transition Plan Method

Figure 7: Transition Plan Method
Current Sponsor NCHICA,

ICD-10
Governance Key ICD-10 Initiatives & ICD-10 Steering WEDI, CMS 5010/
InPuTS Practices
Impact
Decisions Mandates Committee & ICD-10 Best
Analysis
(HITECH, etc.) Stakeholders Practices
Create Vision for Develop Enterprises Create Integrated

Implementation Implementation Recommendations Master Schedule
Identify ICD-10 Gather Create Key Generate

Gather Generate
Interdependent Stakeholder Decisions Individual
Stakeholder Critical
Projects/ Input Alternatives Product
Input Path
Decisions Analysis Schedules
ACTIVITIES Create ICD-10 Create Index

Generate Key Validate
Create Mission, of ICD-10 Compile
Schematics of Decisions Schedules Integrated
Vision, Projects w/
Relationships Recommen Based on CHS Master
Guiding Interdepen
dations Timing Schedule
Principles dencies
Define Key Identify Create Draft

Decisions Economies of Transition Plan Integrated
List Scale Options Report Master
Schedule
Transition Integrated
OuTPuTS Plan Master
Report Schedule
During the transition period, your hospital should monitor the impact of the ICD-10 transition on your
business operations and revenue. Table 20 identifies a series of operational impacts and how your
hospital may monitor and alleviate these impacts and includes the following columns:
• operational Impact: ICD-10 business impact or consideration
• Description and Strategy: Explanation of the impact and opportunities to monitor and alleviate
the impact

Table 20: operational Impacts and Strategies for Monitoring
oPeRATIoNAL DeSCRIPTIoN AND STRATeGy

IMPACTS
Problems with Triggers and rules for evaluating prior authorizations and referrals are based on ICD-9 procedure and
authorization and diagnosis codes. After the ICD-10 implementation, expect changes in payers’ prior authorizations/
referrals; referrals trigger or approvals as they refine medical policies.
Claim delays or
denials Hospitals may also see a significant increase in denials as a result of coding challenges the ICD-10
transition will present to hospitals. These denials may result from changes in payer remediation of
medical policies. They may also occur after the transition due to refinements in processing rules based on
the increased data ICD-10-CM codes provide.
If payers rely on crosswalks to convert submitted ICD-10 codes to ICD-9 codes, there might be
unintended consequences in processing those claims. Your hospital may be denied service payments
or approval due to policy or rule misinterpretation because of code translation errors. To alleviate this
risk, your hospital must coordinate and communicate with payers to understand their implementation
strategies and identify workarounds for clinical scenarios.
Auditing, fraud and Audits of all types are increasing in depth and breadth, including Recovery Audit Contractors (RAC),
abuse Hierarchical Condition Categories (HCC), fraud, abuse, and others.
After the transition to ICD-10, the specificity and detailed information levels will result in greater
documentation scrutiny. To address these concerns, your hospital should perform regular audits on
clinical documentation during the post-implementation stabilization period.
Pay-for-performance Value-based purchasing and overall trends in quality measurement and performance-based payment
have considerable impact on the delivery system, and are expected to be an even bigger factor on
payment in the future.
Changes in the definition of these measures (specifically ICD-10-CM-related measures) will significantly
affect both quality measurement results and target benchmarks.
Hospitals will need to communicate directly with payers and clearinghouses to understand and identify
trends in their clinical behavior because of ICD-10 implementation. This may also help reduce the
consequences of failing to achieve performance-based payment goals.
Case rates, capitation, Hospitals’ participation in case rates, case mix adjustment, risk-adjusted or condition-related capitation,
and other payment and other payment models may affect payment associated with the ICD-10 migration.
methods
Currently, there is little information to predict the extent of these impacts and whether they will be positive
or negative. Nevertheless, hospitals will need to work with payers and clearinghouses directly to identify
trends during the ICD-10 transition.
Accountable Care Accountable care requires disciplined spending management to ensure that payment is for the correct
organization (ACo) service for the correct conditions. ICD-10 will play a critical role in aligning the definitions of service and
model conditions because of the added detail of the ICD-10 codes.
ICD-10 is critically important to the success of accountable care for a number of reasons:
• ICD-10 codes are a mandated standard across the health care industry for reporting patient conditions
and institutional procedures. The increased detail of ICD-10 codes will lead to the ability to identify and
accurately predict risk based on severity, comorbidities, complications, sequelae, and other parameters.
• ICD-10-CM will provide better analysis of disease patterns and the burden on public health.
• ICD-10-CM will increase the ability to assign resources based on more detailed utilization analysis.
In an effort to prepare for ICD-10 implementation and report on accountable care measures, hospitals will
need to work with industry players to identify and align measures to ICD-10.
Value measurements Measures of quality, efficiency, comparative effectiveness, and other care components will differ
significantly in the ICD-10 environment. The definition of the measures may change significantly based on
the nature of the new ICD-10 codes and the new parameters of diseases and services that these provide.
During the transition period, measures that look over multiyear windows may be significantly affected due
to the mix of ICD-9 and ICD-10 codes in those historical data sets.
In an effort to prepare for ICD-10 implementation and report on value measures, hospitals will need to
work with industry leaders.
Table 21 includes several considerations to plan for transition and includes:
• Component: Subject for consideration
• Transition actions: Tasks hospitals may consider
Table 21: Key Considerations for Transition Phase
CoMPoNeNT TRANSITIoN ACTIoNS

Coding productivity Assess the impact of decreased coding productivity on your hospital’s accounts receivable status:
• How long do you expect the decline in coding productivity to last?
• What steps can you take to reduce the effect of decreased coding productivity?
—Eliminate coding backlogs before ICD-10 implementation.
—Prioritize medical records for coding.
—Provide coding staff with adequate ICD-10education and provide refresher training immediately
before the compliance date to improve confidence levels and minimize productivity declines.
—Assess medical record documentation and implement any necessary improvement strategies before
the ICD-10 transition.
—Use electronic tools to support the coding process.
—Use outsourced coding personnel to assist during the initial period after ICD-10 implementation.
—Identify areas of weakness by evaluating productivity across coding, billing, and reporting functions.
Consider training refresher courses to boost skill sets or build particular clinical scenarios that are
limiting productivity.
Coding accuracy Assess the impact of decreased coding accuracy:

• What is the anticipated effect on coding accuracy?
• How long will it take coding staff to achieve a level of proficiency comparable to that with ICD-9?
• What steps can your hospital take to improve coding accuracy?
—Assess coding knowledge and skills and provide an appropriate level of education.
—Monitor coding accuracy closely during the initial implementation period and provide additional
education as needed.
—Identify areas of weakness by evaluating productivity across coding, billing, and reporting functions.
Consider training refresher courses to boost skill sets or build particular clinical scenarios that are
limiting productivity.
Go-live production Develop strategies to minimize transition problems and maximize opportunities for success.
problems
Identify potential problems or challenges during the transition and implement strategies aimed at
reducing the potential negative effects. For example, develop a process to manage errors and resolve
vendor issues as necessary.
Contingency planning Develop a contingency plan for continuing operations if issues or other problems occur when the ICD
10 implementation goes live. Define and rank risks based on the likelihood and outcome if each event
occurred.
Impact of potential Evaluate potential diagnosis-related group (DRG) shifts.

reimbursement
Evaluate changes in the case mix index.
Communicate with payers about anticipated changes in reimbursement schedules or payment policies.
Contracted coding Communicate with companies supplying contracted coding staff to ensure they have received the
staff training needs necessary education. Ask for documentation confirming the extent of education and the qualifications or
certifications of the educator.

Go-Live
This section identifies the process you will use to prepare for going live, including:
• Confirming with system vendors
• Testing the baseline
• Identifying financial targets
• Preparing for productivity declines
• Continuing to assess quality
Table 22 includes the following columns:

• Task: Subject for consideration
• Actions: Steps hospitals may consider
Table 22: Go-Live Tasks and Associated Actions
TASK ACTIoNS
Confirm with system • Identify and resolve issues as early as possible:
vendors
—Identify the plan to report and resolve ICD-10 issues prior to production/go-live, begin monitoring
one year before go-live
—Report resolution of system changes and upgrades
—Determine the appropriate level of ongoing-support
—Identify the point of contact should issues arise
—Resolve any identified problems, including testing failures or identification of business processes or
systems applications affected by the ICD-10 transition but missed during impact assessment
Identify financial • Determine goals for:

targets
—Days not billed
—Claims delayed
—Claims denied
Prepare for • Identify process to track financials/budget

productivity declines
• Establish trending information for performance tracking across staff for coding and billing
• Identify performance targets where possible as well as incentives to keep morale and productivity high
• Evaluate staff for retraining and additional communications and reminders
Continue to assess • Assess medical record documentation quality with respect to demands for increased detail
quality
• Establish processes to ensure necessary documentation
• Implement documentation improvement strategies as needed
• Monitor the effect of documentation improvement strategies

Ongoing Support
During transition, vendors will be expected to monitor ICD-10 implementation and assist in
troubleshooting and resolving post-implementation issues and problems promptly. Your organization
may also use vendors to perform evaluations to identify areas to enhance and recommend for
improving data quality.
Potential Ongoing Support Issues with Vendors

The following list of anticipated and potential vendor issues can be used to help your hospital monitor
and manage your vendor(s) during go-live.
• Identify problems or errors, and take steps to address them
• Monitor coding accuracy and productivity and implement strategies to address identified
problems, such as:
— Additional education on the ICD-10 code sets, biomedical sciences, pharmacology, or
medical terminology
— Additional efforts to improve the quality of medical record documentation
— Additional coding professionals to assist with coding backlogs or reviewing claims denials
and rejections
• Monitor the ICD-10 transition’s impact on reimbursement, claims denials and rejections, coding
productivity and accuracy
• Monitor systems function and correct errors or other identified problems as quickly as possible;
implement contingency plan if needed
• Resolve post-implementation problems as expeditiously as possible
— Follow up promptly on significant post-implementation problems, such as claims denials and
rejections or coding backlogs
— Work with other staff or external entities as appropriate until the identified problem is resolved

Potential Payer Interaction Issues
Use the following list to to help your hospital monitor and manage potential payer issues during go-live:
• Determine how the ICD-10 transition has affected reimbursement. Monitor case mix and
reimbursement group assignment (e.g., DRGs, HHRGs), and provide appropriate education to
staff members about reimbursement issues.
— Work closely with payers to resolve payment issues such as claims denials and rejections
— Analyze changes in case mix index
— Review case mix or reimbursement groups and diagnosis and procedure code assignments
concurrently
— Analyze shifts in reimbursement groups
— Communicate with payers about changes in reimbursement schedules or payment policies
— Provide education and feedback on reimbursement issues to appropriate personnel
Post-Implementation Audit Processes and Procedures

After the ICD-10 implementation, your hospital should review processes to confirm their effectiveness
and sustainability. These include:
• Clinical documentation changes
• Coding practices and processes
• Revenue cycle processes and changes
• Other organization adaptations made during the transition

8
Next Steps
Next Steps
Using this ICD-10 implementation handbook as a guide, your hospital should now be ready to take
the following next steps:
1. Establish awareness among your administrative and physician leadership involved in ICD-10
implementation. This awareness should focus on the breadth of ICD-10 impact across the
industry and communicate a solid understanding of how this will affect business process, policy,
and processes for your hospital. Attention should be directed toward implementation costs,
budget available, staff training needs and impacted vendor tools.
2. Identify an ICD-10 coordination manager who will create an inventory of key tasks for ICD-10
implementation and be in charge of monitoring the daily activities associated with the ICD-10
implementation including:
• Developing an implementation plan and timeline
• Conducting vendor evaluations, monitoring and communication
• Communication and awareness activities both internally and externally
• Training needs assessment and identification
3. Identify vendor support needs for the ICD-10 implementation from vendors and health
associations. In addition, identify other hospitals and agencies from which your hospital may
seek advice, assistance, or materials.

9 Appendix:
Relevant Templates
Appendix: Relevant Templates

The following files are available on the CMS ICD-10 website http://www.cms.gov/ICD10.
The appendix table includes the following columns:

• Template: Name of the template
• Purpose: Description of contents specifically around how this template will assist hospitals
Appendix: Relevant Templates
TeMPLATe PuRPoSe
Project Plan Task List List of both high-level and detailed tasks that hospitals can use to customize to their
unique business processes, policies, and systems. Use this template to identify start
and end dates, predecessor tasks, task owners, estimated work effort, resources, and
dependencies.
Responsible, Useful in clarifying roles and responsibilities in cross functional projects and processes.
Accountable, Support,
Consulted, and
Informed (RASCI)
Matrix
Vendor and Business Tool to assess vendor readiness and plans for ICD-10 implementation. The template
Case Template will allow hospitals to weigh vendor options and assist in identifying the right vendor for
your organization.

This Implementation Guide was prepared as a service to the health care industry and is not intended to grant rights or
impose obligations. The information provided is only intended to be a general summary. It is not intended to take the
place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and
other interpretive materials for a full and accurate statement of their contents.
Official CMS Industry Resources for the ICD-10 Transition

www.cms.gov/ICD10
OCTOBER 2011

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ICD-10 Implementation Guide

for Small Hospitals

2. About ICD-10 .....................................................................................................................................3

3. Limitations of ICD-9 ..........................................................................................................................4

5. Comparing ICD-9 and ICD-10 ..........................................................................................................6

6. ICD-10 Impacts Across the Health Care Industry..........................................................................8

ICD-10 and Small Hospitals ...........................................................................................................10

7. Implementing ICD-10 ......................................................................................................................11

Project Management Process .....................................................................................................15

Risk and Issue Management ........................................................................................................20

Communication And Awareness Phase .......................................................................................24

Resource Management and Training............................................................................................25

Assess Training Needs..................................................................................................................25

Initiate a Training Plan...................................................................................................................26

Business Processes Affected by ICD-10......................................................................................29

High-level Hospital Business Impacts ..........................................................................................31

Patient Flow and Revenue Cycle..................................................................................................33

Medical Records/Health Information Management......................................................................36

Analytics and Research ................................................................................................................37

Medical Staff Functions ................................................................................................................39

How ICD-10 Affects Clinical Documentation ...............................................................................42

How ICD-10-PCS Affects Clinical Documentation.......................................................................44

ICD-10 Effects on Small Hospital Reimbursement ......................................................................44

Methodology to Evaluate ICD-10 Vendors and Tools...................................................................46

Assessing Vendor Functional Capabilities....................................................................................47

Scenario-Based Vendor Assessment ...........................................................................................51

ICD-10 Implementation Guide for Small Hospitals i

Operational Implementation Activities..........................................................................................52

Resources Available to Ease ICD-10 Transition ...........................................................................53

General Equivalency Mappings (GEMs) .......................................................................................54

Testing Phase ..................................................................................................................................54

Test Plan Implications ...................................................................................................................56

Test Case Implications..................................................................................................................56

Test Data Implications...................................................................................................................56

Ongoing Support ..........................................................................................................................63

Potential Ongoing Support Issues with Vendors..........................................................................63

Potential Payer Interaction Issues ................................................................................................64

Post-Implementation Audit Processes and Procedures ..............................................................64

9. Appendix: Relevant Templates ......................................................................................................66

ICD-10 Implementation Guide for Small Hospitals ii

Figure 1: ICD-10 Impacts across the Industry .........................................................................................................8

Figure 2: ICD-10 Implementation Phases ..............................................................................................................11

Figure 3: Readiness Assessment Method .............................................................................................................29

Figure 4: Core Hospital Departments Affected by ICD-10 ....................................................................................30

Figure 5: Impact Analysis Method .........................................................................................................................31

Figure 6: Hospital Information System Diagram ....................................................................................................41

Figure 7: Transition Plan Method ...........................................................................................................................59

Table 1: Diagnosis Code Comparison......................................................................................................................6

Table 2: Inpatient Procedure Code Comparison......................................................................................................7

Table 3: Operational Implementation Options .........................................................................................................9

Table 4: ICD-10 Hospital Implementation Timeline................................................................................................13

Table 6: Hospital Risks...........................................................................................................................................20

Table 7: Communication Plan Key Components and Details ................................................................................24

Table 8: Training Preparation and Needs Assessment ..........................................................................................26

Table 9: Training Topics, Purpose, and Audience ..................................................................................................28

Table 10: Hospitals Business Impacts ...................................................................................................................32

Table 11: Patient Access/Finance/Revenue Cycle Impacts ..................................................................................34

Table 12: Medical Records Impacts.......................................................................................................................36