How ICD-10 Will Affect Worker’s Compensation

Health Insurance ICD-10

ID 10058688 ICD-10 is not required for entities and organizations that are not covered by HIPAA, including worker’s compensation programs. However, not adopting ICD-10 and requiring a different billing method can be expected to impose significant hardships, so many worker’s compensations are voluntarily making the switch.

For those that are, ICD-10 offers a number of distinct benefits for their program.

Specific Information

The additional complexity of ICD-10 codes exists primarily for the reason of creating medical codes that are more specific and provide more information on what happened, where it happened, what was done in response, and what the diagnosis actually is.  Under ICD-9, a submitted claim may not have accurately affected the reality of an injury, resulting in payments that were either above or below what should have been paid as compensation.  ICD-10 makes a significant advance towards eliminating this problem, allowing more accurate and useful information to be transmitted and processed.

Benefits for Worker’s Compensation Programs

Having more accurate information is not the only realm in which ICD-10 affects worker’s compensation programs.  A number of other positive effects have been noted, including:

  • More efficient tracking of health trends and observed problems

  • Enhanced detection of abuse, fraud, and false claims

  • Improving overall administrative performance both within and outside the program

  • More effective monitoring of resources and time

  • Streamlined planning of programs and offerings

  • Greater ability for research, clinical trials, and other medical tests

  • Simplified payment systems

  • Thorough measurements for safety, quality, and efficacy

These diverse benefits, allowing better accuracy and control, offer a significant advantage for worker’s compensation programs.  However, the additional complexity of ICD-10 also means that some current plans will have to be modified or eliminated, as they may be unworkable or inefficient under the updated system.  A worker’s compensation program should be ready for the change as soon as possible, if it does plan to convert, and should also be certain that any medical practice it works with is equally prepared.

Paper vs. Electronic

Submitting claims by paper is still possible, but has been recognized as extremely inefficient.  Accepting both paper and electronic formats requires a complete structure for each method, which is significantly more costly than a single method in which paper and electronic claims are aligned in the same system.  The HIPAA system standard does not technically apply to paper submissions, but as they are primarily offered by small providers or in rare cases, most submissions are electronic.

In particular, Medicare will require submissions electronically with ICD-10, and while a few paper claims may still be submitted to worker’s compensation programs, the expertise required to handle them is much more likely to be more expensive than it’s worth.

The Bottom Line

ICD-10 is not required for worker’s compensation programs, but it is highly recommended.  Despite the complexity of additional codes, the need to restructure plans and policies, and the expected troubles of retraining staff to work effectively with a larger and more complicated system, the benefits of switching and the impracticality of remaining the same (including the rapid depletion of support materials for education) means that ICD-10 is both a major change and a major opportunity.  The changes required are not predicted to be easy to implement, but by making full use of the available programs and supporting information, worker’s compensation programs can be ready for the major change in the health industry happening on October 1, 2014.