As of now CMS is sticking with the concept of clubbing all the corresponding ICD-10 codes for a given ICD-9 code under the same DRG group that was associated with the ICD-9 code--basically leading to a payment neutral scenario. The large payers also seem to be following the same pattern. But I wonder how long that will last?

The two primary reasons for the ICD-10 transition are 1) improved quality of care, and 2) reduced cost of care. Currently the CMS focus seems to be on the first while keeping the payments neutral, thereby maintaining the cost of care. But how long will that last? How long, before CMS breaks down the ICD-10 codes for the one ICD-9 code into multiple DRG groups and associated different prices/rates for each of those groups?

Obviously it makes sense. A procedure that had drastically different execution variations had only one code in ICD-9 and hence one could not really distinguish from one variation to the other on the payer side. Given that, there was no choice for payers but to pay up for the procedure using some kind of average rate, which invariably used to lean towards the highest common factor (HCF) of all the variants. Now they don’t have to do that if the granular procedure codes as captured through ICD-10 lists, could be summarized under different (and more granular) DRG groups. So two variants of the same procedure, one using a cheaper stent and smaller length of stay, could be paid at a lower rate compared with the variant of the same procedure that requires a more expensive stent and a longer stay in the hospital.

Now that will make too much sense, wouldn’t it?

Large payers have already started thinking on these lines and hence a lot of interest in tools that model payouts based on ICD-10 DRG groups compared to similar payouts from historical records that had used ICD-9s. We have been seeing a slew of requests for our payout simulator tool that works on those lines. Unfortunately the requests are primarily coming from payers.

Rightly so because the payers are already in some stage or other with their assessment and remediation strategy for I10 and hence can focus more on value-add exercises such as payout simulations/models. What is going to happen to providers who have yet to realize that there is a tsunami moving towards them, and are still running around like headless chickens to figure out what they want to do for meaningful usage?

 Maybe the administration needs to help them a bit here by converging the ICD-10 requirements with meaningful requirements (first step towards which might have been taken when rumors started floating that 2015 meaningful usage matrices will require the EMRs to be using ICD-10 to be considered compliant). That way ICD-10 will become a part of the overall meaningful usage exercise, possibly focusing more attention on ICD-10 from the provider community perspective.

So, if not on Oct. 1, 2013, pretty soon after it, the ICD-10 based DRGs are going to split to accurately represent the cost of the procedure variant and if you are not ready for it, be prepared to take a hit on payout and/or reimbursement, depending upon whether you are a payer or provider.

Rajiv Sabharwal is the chief solution architect in the Healthcare and Life Sciences unit at Infosys Technologies LTD. He can be reached at


Register or login for access to this item and much more

All Health Data Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access