Background of the ICD-10-CM and ICD-10-PCS Classification

CHAPTER OVERVIEW 
 ICD-10-CM and ICD-10-PCS have been developed to take the place of
ICD-9-CM.
 The change to ICD-10 was needed for a variety of reasons, including
the following:

-- The ICD-9-CM classification is limited in its ability to expand to include

new technology.

-- Once a category becomes full in ICD-9-CM, several types of diagnoses or

procedures have to be classified within the same code to save space.

-- Many other countries in the world have already made the change. This
situation made it difficult to compare the health data of the United States with
the rest of the world.
 Implementing ICD-10-CM and ICD-10-PCS could improve quality of
care and patient safety and make the reimbursement claims process run more
smoothly.
 Every application and database in which diagnosis or procedure codes
are captured, stored, analyzed, or reported now uses the new classification
system.
 ICD-10-CM has many similarities to ICD-9-CM, especially with
regard to the classification format and conventions. The code structure has
changed slightly to accommodate code expansion and improvements to the
classification.
 ICD-10-PCS is a replacement for volume 3 of ICD-9-CM, but it bears
little resemblance to its predecessor.

LEARNING OUTCOMES
 
After studying this chapter you should be able to:
 
Explain the improvements that make the ICD-10 system more efficient and useful
than the ICD-9 system.
 
Explain why a change to ICD-10-CM and ICD-10-PCS is beneficial.
 
Make an initial comparison between the ICD-9 and ICD-10 systems.

TERMS TO KNOW
 
ICD-10-CM
International Classification of Diseases, T enth Revision, Clinical
Modification; consists of diagnosis codes
 
ICD-10-PCS
International Classification of Diseases, Tenth Revision, Procedure Coding
System; consists of procedure codes
REMEMBER
 
Coding professionals must understand the basic principles behind the classification
system in order to use ICD-10-CM and ICD-10-PCS appropriately and effectively.

INTRODUCTION
 
The International Classification of Diseases, Tenth Revision, Clinical
Modification (ICD-10-CM) and the International Classification of Diseases, Tenth
Revision, Procedure Coding System (ICD-10-PCS) have been developed as a
replacement for ICD-9-CM. ICD-10-CM consists of a clinical modification of the
World Health Organization's (WHO) ICD-10. ICD-10-CM consists of diagnosis
codes, while ICD-10-PCS consists of procedure codes. The clinical modification
expands ICD-10 codes to facilitate more precise coding of clinical diagnoses. ICD-10-
PCS is a classification of operations and procedures developed for use in the United
States; it is not a part of the WHO classification.
     A classification system is an arrangement of elements into groups according to
established criteria. In ICD-10-CM and ICD-10-PCS these elements are diseases,
injuries, surgeries, and procedures, which are grouped into appropriate chapters and
sections. Three-character categories are used in ICD-10-CM, and seven-character
codes are used in ICD-10-PCS. These groups are the common basis of classification
for general medical statistical use. They help to answer questions about groups of
related causes and provide the capacity for the systematic tabulation, storage, and
retrieval of disease-related data. Each alphanumeric code represents a counting unit,
with the three-character ICD-10-CM categories forming the basis for data tabulation.
In ICD-10-CM many disease and injury categories have been expanded by fourth,
fifth, or sixth characters that provide additional specificity but remain collapsible to
the three-character category. In addition, in ICD-10-CM some categories use a
seventh-character value to provide additional information regarding the encounter.
     ICD-10-CM and ICD-10-PCS are closed classification systems--they provide one
and only one place to classify each condition and procedure. Despite the large number
of different conditions to be classified, the system must limit its size in order to be
usable. Certain conditions that occur infrequently or are of low importance are often
grouped together in residual codes labeled "other" or "not elsewhere classified." A
final residual category is provided for diagnoses not stated specifically enough to
permit more precise classification. Occasionally these two residual groups are
combined in one code.
     Medical coding professionals must understand the basic principles behind the
classification system in order to use ICD-10-CM and ICD-10-PCS appropriately and
effectively. This knowledge is also the basis for understanding and applying the
official coding advice provided through the AHA Coding Clinic®, published by the
Central Office of the American Hospital Association. It is important all health care
settings to keep current with the ICD-10-CM Official Guidelines for Coding and
Reporting and the ICD-10-PCS Official Coding Guidelines, as well as with
the Coding Clinic. This official advice is developed through the editorial board for
the Coding Clinic and is approved by the four cooperating parties, which include the
American Hospital Association, the American Health Information Management
Association, the Centers for Medicare & Medicaid Services (CMS), and the Centers
for Disease Control and Prevention's (CDC) National Center for Health Statistics
(NCHS). In addition, representatives from several physician specialty groups provide
the Coding Clinic editorial advisory board with clinical input. ICD-10-CM and ICD-
10-PCS coding advice was published in Coding Clinic for ICD-9-CM from the Fourth
Quarter 2012 through Fourth Quarter 2013 issues. Coding Clinic for ICD-10-CM and
ICD-10-PCS was launched in 2014 as a stand-alone publication.

DEVELOPMENT OF ICD-10-CM
 
ICD-10 was released by the WHO in 1993. In 1994 the NCHS determined that a
clinical modification of ICD-10 would be a significant improvement worth
implementing in the United States. It was needed to include emerging diseases and
more recent medical knowledge, as well as to include new concepts and expand
distinctions for ambulatory and managed care encounters. In response, the WHO
authorized development of an adaptation of ICD-10 for use in the United States. All
modifications to ICD-10 need to conform to the WHO conventions for ICD. ICD-10
contains only diagnosis codes. ICD-10-CM was developed under the leadership of the
NCHS as a replacement for volumes 1 and 2 of ICD-9-CM (diagnosis codes).
     ICD-10-CM is in the public domain. However, neither the codes nor the code titles
may be changed except through the Coordination and Maintenance Process overseen
jointly by the CDC and CMS. ICD-10-CM consists of 21 chapters resulting in more
than 93,000 codes. The classification of external causes of injury and poisoning and
the classification of factors influencing health status and contact with health services
are incorporated within ICD-10-CM.

DEVELOPMENT OF ICD-10-PCS
 
In 1992 the U.S. Health Care Financing Administration (HCFA, now CMS) funded a
preliminary design project for a replacement for volume 3 of ICD-9-CM. In 1995
HCFA awarded a three-year contract to 3M Health Information Systems (3M HIS) to
complete the development of a procedure coding replacement system. The new
system was called ICD-10 Procedure Coding System (ICD-10-PCS). The first year of
the 3M HIS contract involved the completion of the first draft of the system. The
second year was devoted to external review and limited informal testing, and the third
year consisted of formal, independent review and testing. ICD-10-PCS was completed
in 1998 and has been updated annually since then. Proposals for updating ICD-10-
PCS codes are now handled through the Coordination and Maintenance Process
overseen jointly by the NCHS and CMS. The goal of the revisions is to keep current
with medical technology and coding needs. The four main objectives in the
development of ICD-10-PCS were:
 
 Completeness: All substantially different procedures should have a
unique code.
 Expandability: The structure of ICD-10-PCS should allow for the easy
incorporation of unique codes as new procedures are developed.
 Multi-axial structure: The structure of ICD-10-PCS should be multi-
axial, with each code character having the same meaning within a specific
procedure section and across procedure sections, whenever possible.
 Standardized methodology: ICD-10-PCS should include unique
definitions for the terms used, with each term having a specific meaning.
     The guiding principles that were followed in the development of ICD-10-PCS are
these:
 
 Diagnostic information is not included in the procedure description.
 Explicit "not otherwise specified" (NOS) options are not provided.
 "Not elsewhere classified" (NEC) options are provided on a limited
basis.
 All possible procedures are defined regardless of the frequency of
occurrence. If a procedure could be performed, a code was created.

     The 17 sections in ICD-10-PCS represent nearly 80,000 codes. ICD-10-PCS uses a

table structure that permits the specification of a large number of codes on a single
page in the tabular division.

RATIONALE FOR CHANGE

 
ICD-9-CM was in use in the United States from 1979 to 2015. Many improvements in
medical practice and technology have taken place since ICD-9-CM was first
implemented. Although ICD-9-CM was updated on a regular basis, the classification
was limited in its ability to expand enumeration because of the physical numbering
constraints contained in the system. Some categories had vague and imprecise codes.
This lack of specificity created problems such as the inability to collect accurate data
on new technology, increased requirements for submission of documentation to
support claims, lack of quality data to support health outcomes, and less accurate
reimbursement.
     Over the years, many of the ICD-9-CM categories had become full, making it
difficult to create new codes. Once a category was full, several types of similar
diagnoses or procedures were combined under one code, or a place was found in
another section of the classification for a new code. Due to a lack of space in the
classification, several distinct procedures performed in different parts of the body, and
with widely different resource utilization, were allowed to be grouped together under
the same procedure code. Furthermore, the structural integrity of the ICD-9-CM
procedure classification was compromised, with new code numbers being assigned to
"chapter 00" and "chapter 17" when new numbers were not available within the
appropriate body system chapter. More importantly, many other countries had already
converted to ICD-10, making it difficult to compare United States health data with
international data. Thus far, 138 countries have implemented ICD-10 for mortality
reporting, and more than 100 countries have implemented it for morbidity reporting.
Each country has developed its own procedure coding system.

COMPLIANCE DATE
 
The U.S. Department of Health and Human Services (HHS) has adopted ICD-10-CM
and ICD-10-PCS as medical data code sets under the Health Insurance Portability and
Accountability Act, replacing the ICD-9-CM volumes 1 and 2 code sets for reporting
diagnoses and the volume 3 code set for reporting procedures--including the official
coding guidelines--when conducting standard transactions. Because ICD-10-PCS
codes are used only by hospitals for inpatient procedures, ICD-10-PCS codes would
not be used in outpatient transactions or by physicians.
     Full compliance is required for claims submitted for encounters and discharges
occurring on or after October 1, 2015 (FY 2016). HHS believed it was in the best
interests of the health care field to have a single compliance date for ICD-10-CM and
ICD-10-PCS to ensure the accuracy and timeliness of claims and transaction
processing. The compliance date was based on the date of discharge for inpatient
claims and the date of service for outpatient claims. The date is consistent with the
long-standing practice of inpatient facilities using the version of ICD codes in effect
on the date of discharge.
     ICD-10 compliance affected a large number of provider and health plan databases,
as well as every application in which diagnosis or procedure codes are captured,
stored, analyzed, or reported. ICD-10-CM and ICD-10-PCS were successfully
implemented due to the careful planning and coordination of resources, including the
training of large numbers of health information coding professionals across the
country. This change was welcomed and long overdue because ICD-9-CM was no
longer able to meet the pressing requirements for increased granularity and specificity
in a hospital coding system.

COMPARISON OF ICD-9-CM AND ICD-10-CM

 
ICD-10-CM has many similarities to ICD-9-CM, especially with regard to the
classification format and conventions. The code structure has changed slightly to
accommodate code expansion and improvements to the classification.

Code Structure
 
     Table 1.1 shows the major differences between the code structures of the ICD-9-
CM and ICD-10-CM systems.
 
     Figure 1.1 shows the difference in the code structure between ICD-9-CM and ICD-
10-CM for the same diagnosis: closed cervical fracture.
 
Format
 
     ICD-9-CM diagnoses and ICD-10-CM are divided into the Index and the Tabular
List.
     The Alphabetic Index is divided into two sections: the Index to Diseases and
Injuries and the Index to External Causes. There is also a Neoplasm Table and a Table
of Drugs and Chemicals. However, unlike ICD-9-CM, ICD-10-CM does not have a
"Hypertension" Table. In general, the same indention pattern and alphabetization rules
are found in both systems. A new feature in the ICD-10-CM Index not found in ICD-
9-CM is the use of a dash (-) at the end of an index entry to indicate that additional
characters are required.

Conventions
 
     ICD-10-CM has retained several conventions already familiar to users of ICD-9-
CM, such as instructional notes, abbreviations, cross-reference notes, punctuation
marks, and relational terms ("and"). One of the more significant changes for ICD-10-
CM is the clarification of the exclusion notes. ICD-9-CM provides a single type of
exclusion note, whereas ICD-10-CM has two types of exclusion notes--each one with
a different use. Both types of exclusion notes in ICD-10-CM indicate that excluded
codes are independent of each other. The ICD-10-CM conventions are covered in
chapter 3 of this handbook.
Improvements and Major Modifications
 
     ICD-10-CM includes the following improvements and major modifications to
ICD-9-CM:
 
 Significant improvements in coding primary care encounters, external
causes of injury, mental disorders, neoplasms, and preventive health
 Inclusion of codes for advances in medicine that have occurred since
the last revision
 Codes with more detail on socioeconomic conditions, family
relationships, ambulatory care conditions, problems related to lifestyle, and the
results of screening tests
 More space to accommodate future expansions (alphanumeric
structure)
 New categories for postprocedural disorders
 The addition of laterality--specifying which organ or part of the body
is involved when the location could be on the right, the left, or bilateral
 Expanded distinctions for ambulatory and managed care encounters
 Expansion of diabetes and injury codes
 Creation of combination diagnosis/symptom codes to reduce the
number of codes needed to fully describe a condition
 Greater specificity in code assignment
 Inclusion of trimester information in pregnancy codes