The transition to ICD-10 codes, which has widespread implications for health care transactions and quality measurement in the United States, offers the potential for several improvements over the current ICD-9 code set. Medicare and Medicaid will incorporate the ICD-10 codes into multiple program functions that currently use ICD-9 codes, including payment systems and quality measurement programs. ICD-9 codes were initially adopted in the United States as the standard for documenting morbidity and mortality information for statistical purposes, but was expanded and adopted in 2000 through HIPAA as the standard code set for use in all electronic transactions by covered entities. Specifically, ICD-9 codes are used in all U.S. health care settings to code diagnoses and are also used in all U.S. inpatient hospital settings to code procedures. Beginning on October 1, 2015, all health care transactions that include ICD codes must use ICD-10 codes for dates of service that occur on or after that date. Transactions with dates of service that occur prior to the transition date of October 1, 2015, must continue to be coded with ICD-9 codes. The vendors whose goods or services health care providers may utilize to help them code and process claims, such as electronic health record vendors and practice management system vendors, are not covered entities, but they must respond to HIPAA standards in order to support their HIPAA-covered customers. Figure 1 illustrates the flow of health care transactions that include ICD codes from the health care provider to payers, and identifies which types of organizations are and are not covered entities. The Centers for Disease Control and Prevention’s (CDC) National Center for Health Statistics is responsible for developing the ICD-10 diagnosis codes with input from medical specialty societies, and CMS is responsible for developing the ICD-10 procedure codes. Representatives from CMS and the National Center for Health Statistics comprise the Coordination and Maintenance Committee, which is responsible for approving coding changes and making modifications, based upon input from the public. CDC and CMS, assisted by the American Hospital Association (AHA) and the American Health Information Management Association (AHIMA)— collectively known as the Cooperating Parties—are responsible for supporting covered entities’ transitions to ICD-10. The Cooperating Parties’ responsibilities include developing and maintaining guidelines for ICD-10 codes and developing ICD-10-related educational programs. In addition to the Cooperating Parties, other organizations are helping to prepare covered entities for the ICD-10 transition. For example, officials with the Workgroup for Electronic Data Interchange (WEDI), a coalition of covered entities, vendors, and other members of the health care industry, hold regular meetings with industry members to discuss how to address ICD-10 transition issues. Additionally, WEDI and other stakeholders have made educational materials available on their websites.the Healthcare Information and Management Systems Society’s ICD-10 Playbook contains tools, guidelines, and information to help covered entities prepare for the transition to ICD-10 codes. Stakeholders have also held sessions on ICD-10 transition-related issues during their member conferences. There are several differences between ICD-9 and ICD-10 codes. For example, ICD-10 codes can include up to seven alphanumeric digits, while ICD-9 codes can only include up to five alphanumeric digits. The additional digits in ICD-10 codes allow for the inclusion of more codes. Specifically, there are approximately 15,000 ICD-9 diagnosis codes compared to approximately 70,000 ICD-10 diagnosis codes, and approximately 4,000 ICD-9 procedure codes compared to approximately 72,000 ICD-10 procedure codes. Despite the dramatic increase in the number of ICD-10 codes, according to CMS and others, most physician practices use a relatively small number of diagnosis codes that are generally related to a specific type of specialty. The additional number of ICD-10 codes enables providers and payers to capture greater specificity and clinical information in medical claims. For example, ICD-10 codes enable providers to report on the body part and the side of the body subject to the evaluation or procedure. More specifically, while there was 1 ICD-9 code for angioplasty—a procedure to restore blood flow through an artery—there are 854 ICD-10 codes for angioplasty, with codes including additional detail on the body part, approach, and device used for the procedure. Another difference between ICD-9 and ICD-10 codes is the terminology and disease classifications, which have been updated so that they are consistent with new technology and current clinical practice. For example, under ICD-9, there was a single code to reflect tobacco use or dependence. Under ICD-10, there is a category for nicotine dependence with subcategories to identify the specific tobacco product and nicotine-induced disorder. The updated disease classifications for nicotine disorders reflect the increased knowledge of the effects of nicotine. Other differences between ICD-9 and ICD-10 codes include the addition of new concepts that did not exist in ICD-9 diagnosis codes, such as the expansion of postoperative codes to distinguish between intraoperative and post-procedural complications; and the designation of trimester for pregnancy codes. The ICD codes are used in a variety of ways by payers, including Medicare and Medicaid. For example, payers generally use ICD diagnosis codes to determine whether the care provided by physicians is medically necessary and, therefore, eligible for reimbursement. Additionally, Medicare hospital inpatient payment rates are based on Medicare-Severity Diagnosis-Related Groups (MS-DRG), a system that classifies inpatient stays according to both patients’ diagnoses and the procedures the patients receive, both of which are identified using ICD codes. The MS-DRG signifies the average costliness of inpatient stays assigned to one MS-DRG category relative to another MS-DRG category. All payers will need to update all systems and processes that utilize ICD codes by October 1, 2015, to ensure they are ICD-10 compliant. In addition to claims processing, Medicare, Medicaid, and private payers conduct a variety of quality measurement activities that use quality measures, which will need to be updated to reflect the ICD-10 codes. For example, Medicare providers collect and report quality measures to CMS for the Hospital Inpatient Quality Reporting program, the Physician Quality Reporting System, the Physician Value-based Payment Modifier Program, and the Electronic Health Records program, and many private payers measure their performance using Healthcare Effectiveness Data and Information Set® (HEDIS) measures. In preparation for the transition from ICD-9 to ICD-10 codes, CMS developed various educational materials, conducted outreach, and monitored the readiness of covered entities and the vendors that support them for the transition. In addition, the agency reported modifying its Medicare systems and policies. CMS also provided technical assistance to Medicaid agencies and monitored their readiness for the ICD-10 transition. CMS developed a variety of educational materials for covered entities, available on the agency’s ICD-10 website,transition to ICD-10 codes. Each of the 28 stakeholders we contacted reported that the educational materials CMS made available have been helpful to preparing for the ICD-10 transition. Some of the materials CMS developed are specific to small and medium physician practices, large practices, or small hospitals. CMS officials told us that the agency developed these materials in response to feedback the agency received to help them prepare for the from stakeholders that indicated that these specific groups wanted materials targeted to them. The educational materials include documents that provide information about ICD-10 codes, including how they differ from ICD-9 codes, and explain why the transition is occurring; checklists and timelines that identify the steps necessary to prepare for the transition, including the associated timeframes; tip sheets on how providers should communicate with the vendors that supply their practices with products that utilize ICD coding—such as software vendors and billing services—and vice versa; videos and webinars; and links to stakeholder websites that also feature ICD-10 guidance and training materials. In addition, CMS officials told us that the agency partnered with organizations to enable providers to obtain continuing medical education credit for eight training modules as a way to incentivize providers to prepare for the transition. To help small practices prepare for the ICD-10 transition, and in response to focus group feedback, CMS launched a new website in March 2014 called “Road to 10.” According to CMS documentation dated March 2013, industry feedback received by the agency indicated that small physician practices lag behind other providers in preparing for the transition. Seventeen of the 28 stakeholders we contacted noted that this website was helpful in preparing covered entities for the transition. The Road to 10 website, which can be accessed through CMS’s main ICD-10 website, provides additional training materials not available through CMS’s main ICD-10 website, including training videos describing the clinical documentation needs for the following specialties: cardiology, family practice and internal medicine, obstetrics and gynecology, orthopedics, and pediatrics. The website also provides a customizable action plan based on several criteria: specialty; practice size; types of vendors supporting the practice, such as an electronic health record system vendor; payers to whom the clinician submits claims; and the level of readiness for the ICD-10 transition. Some of CMS’s educational materials are intended to help covered entities determine which ICD-10 codes they may need to use. Specifically, CMS and the other members of the Cooperating Parties developed a tool called the General Equivalence Mappings to assist covered entities in converting ICD-9 codes to ICD-10 codes. Covered entities can use the General Equivalence Mappings tool to identify ICD-10 codes that might be most relevant to them—a practice that CMS advocates in its checklists and action plans. Six of the 28 stakeholders we contacted described this tool as being helpful to their preparatory activities. CMS’s Road to 10 website also identifies common ICD-10 diagnosis codes associated with the following six physician specialties: cardiology, family practice, internal medicine, obstetrics and gynecology, orthopedics, and pediatrics.