By now you have probably heard that the required switch to using ICD-10 codes for filing claims has been delayed by a few years until October 2013. You can breathe a little easier for now, but you may want to consider how your office will implement the changes now. And what do these changes mean to you anyway?

First, some background…as you know, medical insurance companies do not pay for “benign hypertension” and “15 minute office visits for an established patient” – health insurers pay for diagnosis codes like 307.81 and procedure CPT codes such as 81001. Diagnosis codes, CPT and HCPCS all describe patient complaints, illness, procedures and supplies for a submitted claim. The ICD-9 codes currently in use were adopted in the 1960s by the U.S. Since then there have been many advances in the medical industry. Under the current ICD-9 system, the room to expand is limited. By adding room under the new system, there will be space to expand and it will allow for more specific tracking.

How much so? Think there are too many codes now? Try 68,000 ICD-10 codes, up from 13,000 ICD-9 codes now. For CPT codes we go from 3000 codes now to 87,000 codes! What is more, ICD-9 codes will go from up to 5 digits (ex. 307.81) to up to 7.

The deadline for switching is 2013. In fact, this is not the first time ICD-10 was supposed to be in effect. Many physicians have put off switching, taking a wait and see approach since the mandate has been delayed in the past. However, this time is different as insurers have begun to put processes in place in preparation.

If you currently do your billing in-house and file using on-site software, the switch to ICD-10 could be a large expense for updates to your system as well. What’s more, by January 1, 2012 all physicians must begin using the new version of HIPAA transaction standards known as 5010 in order to file claims. This is because the current 4010 version does not accommodate ICD-10 codes. Even if you believe you can put off switching to ICD-10, it is time to consider what it will take to update to the 5010 transaction standards.

According to a recent article in the Wall Street Journal: “CMS says it expects implementation of the new system initially will boost by as much as 10% the number of claims returned because of coding mistakes. But a study by the Blue Cross and Blue Shield Association of insurers predicts coding errors are likely to rise between 10% and 25% in the first year.”

This is a good time to think about either a switch to outsourcing your billing to reduce your cost, or at least consider an internet based claims filing program. The advantages with internet based electronic claims filing is that the updates are built in to the platform at no cost to you other than your regular fee of using the service. This could potentially save you thousands upfront as well as in the long run. The whole purpose of the switch to ICD-10 is to accommodate the increasing updates in technology and procedures. You can be sure that any in-house software you use for claims filing will require annual updates that can represent an expense to you as well.

You can see why it will be important to have medical coders knowledgeable on the new codes as a part of your practice. Implementation of the new system will be costly, so when the time comes, out-sourcing your coding could be a way to reduce expenses. If that is the route you choose, there are physicians billing services that can assist you.