Accurate and precise coding is extremely important in the health care industry. In addition to reimbursement, it is the key to benchmarking, quality assessment, research, public health reporting, and strategic planning. The current coding system in the United States, ICD-9-CM (International Classification of Diseases, 9th edition, Clinical Modification), has become outdated and obsolete. It is no longer capable of addressing the increasing pressure for more specific codes, particularly codes that can keep up with new technology and advances in medical knowledge.

Due to these constraints, there has been increasing pressure to implement ICD-10-CM (International Classification of Diseases, 10th edition, Clinical Modification) and ICD-10-PCS (International Classification of Diseases, 10th edition, Procedure Coding System), which provide greater specificity in reporting medical conditions and procedures. ICD-10-CM is a clinical modification of the World Health Organization's ICD-10 for use in the United States, one of the last of the developed countries to make the decision to move to ICD-10.

The need to replace ICD-9-CM was originally identified in 1993, when the National Committee on Vital and Health Statistics (NCVHS) reported that ICD-9-CM was rapidly becoming outdated and recommended immediate US commitment to developing a migration to ICD-10 for morbidity and mortality coding. Similarly, the Health Care Financing Administration, now the Centers for Medicare and Medicaid Services, recommended that steps should be taken to improve the flexibility of ICD-9-CM or replace it after the year 2000.

In November, NCVHS voted to recommended that the Secretary of the Department of Health and Human Services take steps to adopt ICD-10-CM and ICD-10-PCS as the Health Insurance Portability and Accountability Act (HIPAA) standards for national implementation as a replacement for current uses of ICD-9-CM, Volumes 1, 2, and 3. A notice of proposed rule making is the next formal step in the process.

Estimated costs of implementation of ICD-10-CM and ICD-10-PCS are between $425 million and $1.15 billion, according to "The Costs and Benefits of Moving to the ICD-10 Code Sets," a report commissioned by RAND at the request of NCVHS. These costs are far outweighed by future benefits, which include facilitating improvements to the quality of care and patient safety, fewer rejected claims, improved information for disease management, and more accurate reimbursement rates for emerging technologies. Additionally, a field study conducted by American Health Information Management Association and the American Hospital Association earlier this year not only shows that ICD-10-CM is a significant improvement over ICD-9-CM, but can actually be implemented without excessive staff training costs or changes in documentation.

Any delay in adoption of ICD-10-CM and ICD-10-PCS will only cause an increase in future implementation costs. Significant costs, both direct and indirect, are being incurred by continued use of severely outdated and limited coding systems. For example, failure of our coding systems to keep pace with medical advances results in the use of vague or incorrect codes and excessive reliance on supporting paper documentation. Considerable cost savings and improved patient care can be achieved through more accurate, complete, and detailed data provided by better coding systems. This will improve the ability to measure the quality, safety, and efficacy of health care and enhance health policy decision-making.

Linda Kloss, MA, RHIA, is executive vice president and CEO, American Health Information Management Association, Chicago.