Health Language Blog

How to Mitigate Risks Associated with the ICD-10 Conversion

Posted on 05/21/15


The inability of your healthcare delivery organization to adequately adopt the new ICD-10 coding structure could mean you’re administrative staff will be faced with a large amount of denied claims to fix.  Even worse, payment delays for rejected claims could take months to sort out. Many organizations are ramping up their clinical documentation improvement program, coder education and engaging in discussions with payers to ensure that they have their bases covered for October 1st.

Failure to meet the ICD-10 compliance deadline would mean your organization will be one of the many that the Centers of Medicare & Medicaid Services (CMS) estimate will expe rience increases in their claims error rates ranging from 6 percent to 10 percent. The average today with ICD -9 is about 3 percent. Increased error rates will directly affect your accounts receivable days. 

As a vendor working with many healthcare delivery organizations, health plans and other entities involved in ICD-10 conversion work we understand the importance of mitigating financial risk. However, many healthcare organizations still need to create a plan that gives clearer guidance on how to achieve this goal. Through proper risk mitigation planning, we will create a strategy tailored to meet your needs and help you quickly move through this process.

The first step is finding where you have risk. You need to focus your efforts and this can be done using claims analytics software. Typically our clients review 6-12 months of historical 837I claims data. We have found that on average about 10% of the claims shift. This is good news, as 10% is a manageable amount for review. However, if you do not use analytics software, there is a 90% chance you are reviewing the wrong data! Specifically, our software can simulate DRG shifts through a process that takes 837I historical claims and simulate ICD-10 837I using the MS and/or APR DRG Grouper.

At Health Language, we have developed a claims analysis methodology – that outline 3 categories identifying why DRGs shift. This methodology allows for repeatability, and reliability amongst the coding analysts.  It also turns insights into meaningful action.

 Let’s review these three categories and I’ll highlight some specific examples:

1. Financial. This first category is where you have true financial risk, true increases or decreases in the DRG weight. For example where you lose or gain a CC/MCC. Also, we are seeing decreases in the DRG weight with certain ICD-10 codes, regardless of specificity in the documentation, or selection of the most precise ICD-10 code.

Ask yourself how your hospital's rehab claims currently reimbursed – per diem or DRG based? We are seeing decreases in the DRG weight with ICD-10 Aftercare codes. In fact several of our clients are in discussions with their payers and plan to change from DRG based payment to per diem.

 2. Coder Education. The next category captures what coders need to know in ICD-10 that is specific to your hospital. Where are there one to many relationships amongst the ICD-10 codes? What coding guidelines, ICD-10 codes, service lines should be reviewed before Oct 2015? 

Here’s a good example of a DRG shift mitigated through Coder Education:

In this example, ICD-9 code 00.66 has 42 potential target codes in I-10 (02733ZZ – 02734ZZ).  It’s VERY EASY to transpose a number and/or letter resulting in the wrong code.

To identify the proper target code, the coders need to answer - was stent drug eluting or not? The DRG states whether a drug-eluting device was used. The coder needs to ensure selection of the ICD-10 codes that include a drug-eluting device, otherwise the DRG will have a negative shift.

Also need to ensure documentation supports number of sites, was it a single vessel or bifurcation, the type of stent and the approach (Open approach not plausible, throw out the increases generated with these codes).

3. Clinical Documentation Improvement. The final category highlights areas of documentation need to be improved to ensure selection of the most specific ICD-10 code?  To validate these efforts leading up to October, you can use these items to identify what charts needs to be reviewed for documentation. Customize CDI training by Provider and inform each provider what they need to know to be successful with the transition to ICD-10.


Here’s an example of a specific area that can be mitigated through clinical documentation:


This example demonstrates the importance of selecting the most specific ICD-10 code, as the shift can be mitigated by more specificity.  For example, quite often unspecified codes as a principle diagnosis will cause a decrease in DRG weight. In the case of the F32 (major depressive disorder) codes in ICD-10, you’ll need to tell your provider to indicate the severity of illness (mild, moderate, severe, etc.) to avoid the unspecified code. Documenting severity of illness is a common theme with ICD-10. 

Message to Providers, based on your clinical findings, include severity of illness. With a payment rate of $6000 this becomes a $2000 word. One word can negatively affect payment! 

If you do not understand where you have financial risk in ICD-10, how do you know what areas will be impacted? How to you know how to plan your remediation efforts?

 As you begin to understand why the DRG’s have shifted turn this insight into meaningful action. Tailor and customize your CDI program and coding education program, identify charts for dual coding, and review. Make your time count.

Our staff of AHIMA-approved ICD-10 trainers and certified coders, medical professionals, PhDs, and medical informaticists will help you with the expertise you need.

ICD-10 Transition for Providers


Topics: ICD-10 implementation

About the Author

Deborah Szymanski Deborah Szymanski RN, BSN is an Account Manager and Clinical Specialist at Health Language. Deborah started her healthcare career as a nurse in the Emergency Department. Deborah has spent the last six years working in medical software, yet still is very involved in the ER nursing field.