Current Uses of ICD-10: Medical Reimbursements & More

The International Classification of Diseases helps clinicians and researchers understand the conditions that afflict us. Healthcare supply chain deals with the purchasing of supplies for procedures that treat these ailments, based on classifications through the ICD-10-CM. And these classifications and subclassifications dictate the medical billing and reimbursements. Find out the history behind the ICD-10, how it works, how the coronavirus may have set a precedent for new codes, and how the ICD-10 is leveraged for medical reimbursements.

History of the International Classification of Diseases

Humans have always wanted to know what diseases plague the human race. Classifications for diseases actually started in the middle ages as “Bills of Mortality”.

In those early days, diseases were classified fairly simply. For instance, consumption was a commonplace disease which in today’s modern terms we would describe as tuberculosis; or French Pox known today as Syphilis. Sometimes, the diseases were also simply named “Cold and Cough.” We would now sub classify them into more diseases such as pneumonia.

In modern times, we have the ICD 10 code. It’s the International Classification of Diseases. The full official name is International Statistical Classification of Diseases and Related Health Problems. The ICD 10 was derived from previous versions of the ICD code sets that originated in and around the year 1900 after the first conference to revise the classification took place. The ICD was developed to track morbidity and mortality. The World Health Organization (WHO) is the governing body over the ICD.

How Classification of Diseases Works and Its Processes

When it comes to classification, there are two schools of thought: lumpers and splitters. “Lumpers” want to place items that are of similar nature under one classification. Whereas, “Splitters” want to subclassify every disease down to the smallest of details. There is a balance as you want enough data to be meaningful, but varied enough to see trends. The current ICD-10 has over 60,000 codes, up from 12,000 in ICD-9.

The ICD code is seven characters long and has a hierarchy. 

Take the example of S86.011D

S – Injury to lower joints

86 – Injury of muscle, fascia, tendon of lower leg

011 – Strain of right achilles tendon

D – Subsequent encounter

When determining an ICD code for a condition, the “axis of classification” – the cause or the area affected – is important. For example, if a patient has pneumonia, what type of pneumonia is it? It could range from aspiration, to bacterial, to viral.

New codes are proposed on a regular basis. And then, in a final ruling, the code is either accepted or rejected. If a code has been accepted, it will be implemented on October 1st of that year.

The ICD 10 code set has an overlying classification, referred to as chapters. The chapters include the different diseases, for example diseases of the eye, diseases of the circulatory system, and diseases of pregnancy/childbirth.

ICD in Medical Billing

The classification of diseases in a supply chain sense can help us determine which CPT code or DRG code is assigned to the case so that we can reimburse the providers for the care they give.

The ICD, though not what it was intended to do, has become a methodology for medical billing. Due to the billing aspect, the sequencing of codes is very important. If the wrong sequence of codes is used, the wrong MS-DRG (Diagnosis Related Group) will be assigned to the case. Since reimbursement is based on MS-DRG, the wrong ICD-10 code can potentially impact the reimbursement amount.

It’s worth noting that the ICD-10-CM (Clinical Modifications) is the code set that is used in the United States for medical coding and billing.

Coronavirus and Going Forward

As of March 18, 2020 the novel coronavirus disease, also known as COVID-19, has been assigned an ICD 10 code the code is U07.1. In the description, it’s the (2019-nCoV) acute respiratory disease.

This new code for Covid-19 is a provisional code as it falls under the U block. This new disease will most likely be moved from a provisional code to an A or B Chapter with other coronaviruses such as SARS.

The corona virus code went into effect on April 1, 2020 rather than the usual October 1st date that most new codes come into effect. This was due to the widespread prevalence of the virus and the need to identify it when documented. This quick turnaround could lead to other codes with high significance being implanted faster in the future.

What’s Next for the Classification of Diseases

Supply chain professionals need to stay agile to keep up with new diseases and their demands on healthcare. In the future, we may find that the novel coronavirus will be classified elsewhere. We may even need a new chapter to deal with unknown future health issues. As these changes take place, updates to other codes will be necessary for hospital supply chain functions – as well as to the software and tools they use.