The Transition to ICD-10

The Transition to ICD-10

Published: October 8th, 2015

On October 1, 2015, the US government moved from the ICD-9 coding system to ICD-10, which is a coding standard already being used by many developed countries around the world. The change expands the number of codes from 20,000 to more than 155,000. Which is nearly eight times as many codes to describe why a patient sought care and how that patient was treated.

The reason behind the change was apparent, as the ICD-9 system was more than 30 years old, contained outdated terms, limited data, and was not aligned with today’s medicine.The new coding system ICD-10 allows physicians to capture more details about the health status of patients which CMS has said will improve patient care and public health surveillance.

Benefits of ICD-10

While there will not be an increase in physician reimbursement with the implementation of ICD-10, it’s ability to reflect more clinical detail will allow physicians to more accurately report the care they do provide, which should lead to more appropriate reimbursement and potentially fewer denials. The transition will also provide higher-quality data for measuring quality, safety, and efficacy.

Other benefits include:

  • Improved quality measurement and patient safety 
  • Improved outcomes measurement 
  • Greater opportunity for research, clinical trials, and epidemiological studies
  • Better performance measurement 
  • Increased health policy planning
  • Improved capabilities for payment systems design and claims processing
  • Increases and improves reporting on new medical technology
  • Provides better data for provider profiling
  • Provides better information for refinements to current reimbursement systems
  • Provides better data for pay-for-performance programs 
  • Improves public health reporting and helps to track and evaluate the risk of adverse public health events
  • Improves ability to manage care and disease processes
  • Improves ability to educate consumers on costs and outcomes of treatment options
  • Decreased claims submission 
  • Fewer rejected claims
  • Reduced coding errors 
  • Reduced labor costs and increased productivity 
  • Reduces potential healthcare fraud and abuse


Over the past few years, CMS, AMA, providers, and payers alike have all been preparing for this transition to ICD-10. One study indicated that ICD-10 implementation costs for small practices ranged anywhere from $56,639 to more than $226,000. Medium practices, between $213,364 and $824,735 and large practices between $2 million and $8 million. A cost/benefits analysis completed for the Department of Health and Human Services stated that the benefits far outweigh the costs of implementation.

The good news for practices is that the CMS has made some concessions that should make the new implementation to ICD-10 a little easier. Physicians who are worried about getting all the new codes exactly right can take comfort from a recent announcement that CMS will not deny claims for the first year, as long as the claims use the proper family. CMS also assured physicians they will receive advance payments in the event that Medicare contractors encounter problems processing claims as a result of the transition.

CMS implementation concessions:

  • A grace period of one year in which Medicare PartB claims will not be denied solely on the specificity of the ICD-10 diagnosis codes provided, as long as the physician submitted an ICD-10 code from appropriate family of codes.
  • Also for one year, CMS said Medicare Administrative Contractors and Recovery Audit Contractors will not audit Medicare Part B claims based on the specificity of the diagnosis codes, as long as they are from the appropriate family of codes.
  • CMS’s new ICD-10 Coordination Center in Baltimore will manage and triage issues relating to the code switch.
  • CMS will also authorize advanced payments if Medicare contractors are unable to process claims within established time limits due to problems with ICD-10 implementation.

The American Medical Association praised the agency for its responsiveness to the transitional concerns of physicians.“This means that Medicare will not deny payment for unintentional errors as practices become familiar with ICD-10 coding,” AMA president Steven
Stack wrote.“We will urge the agency to make any needed adjustments to the grace, period policy and timeline based on new information that surfaces during the implementation process.”

While it is still too early to have any concrete information, CMS has indicated that it will take a few weeks before we will have a complete understanding of the full implementation to ICD-10. For additional questions or concerns, CMS and AMA have free resources, tips and information for practices that are available on their websites.