ICD-10 Transition: Threat or Opportunity?

Chicago, IL — February 12, 2015


On October 1st 2015, the US healthcare system will undergo a switch from ICD-9 codes to the more specific ICD-10 diagnostic and procedural codes.  While many in the healthcare industry feel this system update is long overdue, tangible hurdles currently exist for manufacturers, payers and providers.  Discussions in the industry press suggest that claims backlogs and delayed reimbursement may occur for the period immediately following the October 1st 2015 transition, and this could affect manufacturers’ product sales.  Additionally, manufacturers with drugs in clinical trials will need to update protocols and ensure continuity of diagnosis coding in longitudinal studies across the switch.  Yet despite the challenges precipitated by the ICD-9 to ICD-10 transition, opportunities for pharmaceutical manufacturers do exist:

• By developing transition guides that inform practices of the upcoming switch and that include new relevant codes, manufacturers can generate goodwill and provide practices with the ICD-10 diagnosis codes needed for key products

• As the new ICD-10 codes provide greater diagnosis specificity, future retrospective studies may uncover previously hidden product advantages in distinct patient subtypes

Is your business prepared to take full advantage of this opportunity?

What is happening with the ICD-9 to ICD-10 transition?

The International Statistical Classification of Diseases and Related Health Problems, also known as the International Classification of Diseases (ICD) codes are used throughout the world to standardize disease diagnoses for the purposes of health care reimbursement, clinical records, and epidemiology studies.  The United States is currently using ICD-9 codes that were originally developed in the 1970’s, whereas many other developed countries have switched over to the updated ICD-10 codes.1  ICD-9 contains approximately 14,000 codes that are 3 to 5 characters long compared with over 68,000 ICD-10 codes that are 3 to 7 characters in length.2  This new ICD-10 system allows for greater diagnosis specificity and incorporates medical advances that have occurred since ICD-9 codes were created. 

In 2009 the Department of Health and Human Services published a Final Rule mandating the US switch to ICD-10 codes on October 1st 2013.3  Due to the healthcare system’s lack of preparedness in 2013, and then again in 2014, the transition to ICD-10 was delayed twice.3  Many stakeholders see the transition as inevitable, and some believe it should not be delayed again.3  October 1st 2015 is the current switch date for the US healthcare system to begin using ICD-10 exclusively.  In the time remaining before the transition, healthcare providers and managed health care (MHC) payers need to prepare by training their staff to code ICD-10, updating their computer systems, and preparing for potential claims backlogs or delayed reimbursement.  Pharmaceutical, diagnostic, and medical device manufacturers should act to minimize potential delays and/or reduction in coverage and reimbursement for their products.

How might the ICD-9 to ICD-10 switch affect manufacturers with products on the market?

For manufacturers that currently have products on the market, the ICD-9 to ICD-10 transition could impact product sales.  Due to the increased specificity and number of codes used in ICD-10, coding diagnoses for claims may become more time consuming for providers, slowing the submission process.  Providers may initially code claims improperly, and payers may get backlogged dealing with incorrect claims.  This could result in delayed reimbursement.  If providers are continually experiencing coverage or reimbursement difficulties for certain products, one could speculate that providers may opt for another, easily reimbursed, treatment option (if available).  Together these factors could slow products sales after October 1st 2015, as providers and payers experience increased workload and delayed reimbursement.

What opportunities does the ICD-10 transition present for manufacturers with products on the market?

To prevent potential reimbursement delays, providers can prepare for the ICD-10 transition; however, this can be a daunting task and a role exists for manufacturers to provide assistance.  Manufacturers should identify the ICD-10 codes required for their products to be approved and/or reimbursed and incorporate these into a coding aid that also includes other common diagnoses relevant to that medical specialty.  This would provide a ‘one-stop’ guide for practices to use during their transition preparations, while encouraging correct coding of that manufacturer’s product(s).  Sales representatives and account managers can disseminate this information to relevant practices and payers.  Additionally, manufacturers can provide a reference website or call-in help line for providers trying to obtain approval or reimbursement for a product.  By providing practices with the information they need to correctly code for certain products, manufacturers can increase the chances of timely reimbursements, and ultimately a continuous sales stream for their products. Additionally, proactive engagement with payers and providers could generate goodwill and open up opportunities for future sales promotions.

How will the ICD-9 to ICD-10 transition affect manufacturers with products in development?

For manufacturers that currently have products in development, the ICD-9 to ICD-10 transition may impact ongoing clinical trials.  Study protocols that currently use ICD-9 codes will need to be amended to include ICD-10 codes.  For ongoing longitudinal studies, notations must be made to patient study records in order to indicate the ICD-9 diagnosis switch to ICD-10, because while the new ICD-10 codes may provide additional specificity, the patient’s medical diagnosis did not change purely from the code switch.  The increased specificity will benefit study design in the long run; however, to ensure study continuity and clarity, study administrators should make preparations for the ICD-10 transition.

What opportunities does the ICD-10 transition present for manufacturers with products in development?

The implementation of the ICD-10 diagnosis codes may prove beneficial for clinical trial design and future retrospective studies.  New studies may rely more heavily on ICD-10 codes to communicate inclusion and exclusion criteria for a trial in a more standardized manner.  Additionally, the increased specificity of ICD-10 codes may allow for more insightful retrospective studies to assess outcomes in more narrowly defined subsets of patients. Clinical development staff should consider how ICD-10 diagnosis codes can improve the design and control of their studies.

Where can I learn more about the ICD-9 to ICD-10 transition?

• Centers for Medicare & Medicaid Services http://www.cms.gov/Medicare/Coding/ICD10 
• American Medical Association http://www.ama-assn.org/go/ICD-10 
• Centers for Disease Control and Prevention http://www.cdc.gov/nchs/icd/icd10cm.htm

Please contact bioStrategies Group with any questions you may have about how the ICD-10 transition could impact your business.


1. World Health Organization. International Classification of Diseases (ICD). http://www.who.int/classifications/icd/en/

2. American Medical Society. ICS-10 Code Set to Replace ICD-9. http://www.ama-assn.org/go/ICD-10

3. Department of Health and Human Services Office of the Secretary. HIPAA Administrative Simplification: Modifications to Medical Data Code Set Standards To Adopt ICD-10-CM and ICD-10-PCS. Federal Register Rules and Regulations. Vol. 74, No. 11. Jan 16 2009 http://www.gpo.gov/fdsys/pkg/FR-2009-01-16/pdf/E9-743.pdf

4. iHealth Beat. ICD-10 Delay Could Be Data Disaster. Dec 9 2014 http://www.ihealthbeat.org/perspectives/2014/icd10-delay-could-be-data-disaster