The ICD-10 Transition


Hello I’m Ira Shapiro, Chairman and Chief Executive Officer of CodeSmart Holdings, Inc. (OTCQB:ITEN). I am eager to share information and updates about CodeSmart Group with our investor community via The Chairman’s Blog platform. The company will continue issuing regular press releases, however the intention behind this blog is to create a conversational environment among shareholders and investors as well as keep the company aware of CodeSmart’s progress in the ICD-10 transition and medical coding field.

CodeSmart Capitalizes on ICD-10 Transition

For my first blog I will be taking the opportunity to discuss the significant changes between ICD-9 and ICD-10, the potential of ICD-10 implementation, and how the change is creating opportunities for companies like CodeSmart.

On October 1, 2014, the ICD-9 code sets used to report medical diagnosis and inpatient procedures will be replaced by ICD-10 code sets. The transition will be required for everyone who provides care and is federally mandated. The International Statistical Classification of Diseases and Related Health Problems (“ICD”) is a standard diagnostic tool developed by the World Health Organization (“WHO”) for epidemiology, health management, and clinical purposes. While the tenth iteration, ICD-10, was endorsed in 1990 and came into use back in 1994, the U.S. has been slow to adopt the new standards and continues to use the outdated ICD-9 version to this day.

ICD-10 Involves Significant Changes

The differences between ICD-9 and ICD-10 are significant, for example, ICD-10 has seven alpha-numeric characters and totals over 155,000 possible codes, while ICD-9-CM codes are only three to five numeric digits and total approximately 14,000 codes. Given these increased number of codes, greater number of potential characters per code, and increased code specificity, it will require significant planning, training, and upgrades industry-wide for the transition to be made by the October 1, 2014 deadline. The penalty providers will receive for submitting an incorrect code for reimbursement: non-payment of the claim.

ICD10 will impact every aspect of a healthcare provider’s organization. It will require a massive wave of system reviews, new medical coding or extensive updates to existing software, and changes to many system interfaces.

ICD-10 implementation has the potential to be so profound that it will touch all operational systems and procedures of the core payer administration process and the provider revenue cycle. Also, there will be huge talent gap because of ICD-10. Productivity of coders will drop by over 50% like it did in other countries who transitioned to ICD-10. Additionally, 40 million new patients are coming into the system because of the Patient Protection and Affordable Care Act (Obamacare). All of this results in a huge vacuum of talent in medical coding and there will be a shortage of over 4 million medical coders over the next few years.

The need to educate the entire healthcare industry and bring over 4 million people into coding will create an ongoing and sustainable business for on-line ICD-10 education programs like CodeSmart University and create the need for outsourced coding in a big way. In addition, to remain certified, coders will need continuing education every year and there will be constant changes to ICD-10 over the next 10 plus years.

A study recently conducted on 63 hospitals by The Lott QA Group, one of CodeSmart’s strategic partners, revealed that 73% of the ICD-9 coding was inaccurate. ICD-10 will only multiply the problem exponentially.  The OIG (Office of the Inspector General) says medical coding needs to be 95% accurate, this all translates into loss of revenue or a compliance problem, the shortage of coders will be monumental as many will retire and the remaining coders will have to specialize. Every healthcare provider will have to outsource a portion or all of their ICD-10 transition to a consulting company who specializes in ICD-10. CodeSmart is a leader of only a handful of companies uniquely positioned to provide the whole continuum of necessary solutions in ICD-10 to healthcare providers.

Thank you for taking the time to read this blog. I look forward to sharing news and updates with the CodeSmart community. We will also be utilizing our new official social channels as a means to connect with stakeholders. You can find us on Facebook, Twitter, LinkedIn and Google+.


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