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Risk in Context

New Injury and Illness Coding System May Help Reduce Workers’ Comp. Costs

Posted by Thomas F. Ryan October 05, 2015

A required change to how workplace injuries and illnesses are reported could help employers improve safety, which would ultimately help control workers’ compensation costs. As of October 1, employers, insurers, and claims administrators are required to use the International Classification of Diseases, Modification, and Procedural Coding Systems (ICD-10) to report workplace injuries and illnesses to the Centers for Medicare & Medicaid Services (CMS).

Compliance with the new rule may be costly and time-consuming for some. But the more detailed injury and illness data captured via ICD-10 can help employers enhance workplace safety programs.

What’s New in ICD-10

ICD-10 increases the number of possible codes to about 68,000 from 14,000 in ICD-9, enabling greater specificity of diagnoses. Using ICD-10, hospitals and other providers will be able to provide more detailed descriptions of patient conditions in medical records and other documentation. For example, medical records can include more information about the severity of a patient’s injury, comorbidities and complications, and cause of injury.

Analytics Opportunities

With that greater level of detail, employers and their advisors have an opportunity to more fully report and track injuries, and thus improve their reimbursement from CMS. The new system should also enable better decisions about caring for injured workers and preventing injuries from happening in the first place.

For example, under ICD-9, an injury might be vaguely recorded as pain in the soft tissue of an employee’s limb. But ICD-10 codes are more specific. Among other things, ICD-10 codes can record which limb or part of a limb is affected (hand, fingers, wrist, forearm, upper arm, thigh, lower leg, foot, or toes) and whether the injured limb is on the employee’s dominant side. This can help inform decisions about:

  • Return-to-work programs: Knowing whether an injury affects an employee’s dominant hand can help case managers make better decisions about the transition duty an employee can perform during recovery.
  • Medical diagnostics and treatment: Knowing which body part is injured can help nurse case managers pre-certify certain tests or diagnostics.
  • Safety programs: Aggregate data showing that employees are more frequently injuring fingers rather than wrists can help employers make smarter decisions about training, protective equipment, ergonomics, and job design.

Employers that embrace the new standard and incorporate the data into their overall safety program are likely to promote workplace safety and gain a competitive advantage over those that see it only as a burden.

For more on this topic, read New Workers' Compensation Coding System Goes Into Effect Oct. 1: Are You Ready? or listen to the replay of our recent webcast, Creating Safer Workplaces and Reducing Costs through Predictive Analytics and Technology.

Thomas F. Ryan

Tom Ryan is a managing director and Market Research Leader in Marsh’s Workers’ Compensation Center of Excellence. He is responsible for developing market research, insight, and other content on emerging issues, trends, regulatory, and other changes that affect the workers’ compensation market.