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ICD-10’s Impact on Hospital Payments Expected to Be Zero

May 29, 2015:

The transition to ICD-10 this fall may loom large in terms of systems changes, but the net impact on hospital payments is estimated to be close to zero. Whether that impact will be on the positive or negative side of zero depends in large part on the quality of the coding.

According to Ron Mills of 3M, one of the authors of an American Health Information Management Association white paper on ICD-10 impact who presented at the ICD-10 Coordination and Maintenance Committee meeting in March 2015, hospitals will likely experience negligible shifts in MS-DRGs due to differences between ICD-9 and ICD-10 codes. A study involving 10 million fiscal year 2013 MedPAR records that were grouped using ICD-9 MS-DRG Version 32, converted to ICD-10 codes and grouped with MS-DRG Version 32 found that 0.41 percent of the records were assigned a higher-weighted MS-DRG, and 0.66 percent a lower-weighted MS-DRG after conversion, based on fiscal year 2015 weights. The net effect was $4 per $10,000 in reimbursement, or –0.04 percent.

The results hold for all hospital types, with rural hospitals experiencing the largest impact on net reimbursement: –0.06 percent.

Of the shifts to lower-weighted DRGs, 40 percent are due to the ICD-10 code not reflecting a CC or MCC. When records shift to highter-weighted DRGs, 75 percent of the time it is because the code now reflects a CC or MCC.

Mills notes that human error and expertise are the biggest factors in determining whether records undergo an MS-DRG shift when converted to ICD-10. Out of 100 records the authors of the white paper studied, there were 20 instances of a shift. Upon examination, however, it was clear that only two records had truly undergone a shift because of the difference between ICD-9 and ICD-10. The other 18 cases were due to coders missing clinical details.


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