The transition to ICD-10 in 2015 saw the number of available procedure codes increase from roughly 3,000 to more than 70,000. This change gives clinicians the ability to code procedures to a much higher degree of specificity and provides health systems the ability to unlock powerful clinical insights into how inpatient procedural care is delivered. This article covers the benefits and drawback of ICD-10 PCS, as well as concrete ways health systems can use these procedure codes to provide new clinical insights. The article also walks through the anatomy of the seven-digit alphanumeric codes and provides specific clinical examples of how healthcare organizations can slice and dice this data.

1. ICD-10 PCS: Harnessing the
Power of Procedure Codes

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When the U.S. healthcare system transitioned
from ICD-9 to ICD-10 codes in 2015, this
brought the number of available *PCS codes
from roughly 3,000 to more than 70,000.
This drastic increase means clinicians can
code procedures with a much higher degree
of specificity.
And, ICD-10-CM diagnosis codes also
increased from 13,000 to 68,000.
Harnessing the Power of Procedure Codes
*Procedure Coding System, a U.S. classification system
referring to procedures in an inpatient setting

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Although the shift to ICD-10 required
healthcare organizations to change how
medical encounters are documented,
doing so gives organizations the ability
to harness powerful analytics behind
ICD-10 PCS codes.
Armed with new insights into how
inpatient procedural care is delivered,
health systems can improve patient
outcomes and value.
Harnessing the Power of Procedure Codes

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Health Catalyst uses a Clinical Integration
Hierarchy, which allows for more precise analysis
of the care provided and more actionable data
for clinicians or administrators to review
The Clinical Integration Hierarchy heavily
utilizes ICD diagnosis codes to organize and
analyze data according to care processes.
This hierarchy groups healthcare into
work processes that reflect how care is
actually delivered, across departments
and care settings, and provides a
relevant, focused structure for prioritizing
and implementing improvement initiatives.
Building Procedural Integration Hierarchies
for Analytic Insights

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By organizing and analyzing data according to
care processes, health systems can determine
which of these processes offer the greatest
opportunity for improving quality and reducing
unnecessary cost.
Similarly, Health Catalyst is now building a
Procedural Integration Hierarchy utilizing
procedure-based code.
This allows healthcare organizations the
ability to glean important analytic insights
using procedure data as well as leveraging the
higher degree of specificity that ICD-10 allows.
Building Procedural Integration Hierarchies
for Analytic Insights

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The addition of a procedural integration hierarchy
will complement the clinical integration hierarchy
and allow clinicians and hospital leaders more
contextual information.
For instance, in looking at transplant patients
by diagnosis codes, we are currently unable
to identify if they had the transplant on the
current encounter, or was the admission
related to underlying management of their
medical condition.
Building Procedural Integration Hierarchies
for Analytic Insights

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This is crucial information when looking at
variation in costs, length of stay and/or rates
for readmission.
There’s the potential for significant variation in
surgical costs and medical management from
one patient to the next by simply looking at
diagnosis codes.
Similarly, when looking at procedure codes,
three different patients may have had a portion
of their colon removed for varying reasons
(e.g. a gun shot, colorectal cancer, severe
irritable bowel syndrome (IBS), etc.).
Building Procedural Integration Hierarchies
for Analytic Insights

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All three patients would show as having colectomies
but the length of stay (LOS), processes, and
outcomes could be intentionally different.
Neither coding tool provides a full picture as we
are looking at single variables when classifying
a patient stay, which is why the procedural
hierarchy will help add content and context
to the data available.
The ICD-10 system is structured for an analytics
platform, such as the Health Catalyst® Data
Operating System (DOS™), to harness
information about a health system’s patients.
Building Procedural Integration Hierarchies
for Analytic Insights

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The International Classification of Diseases (ICD)
was initially developed and published by the
World Health Organization (WHO) to standardize
healthcare reporting worldwide.
According to the WHO, “ICD is the foundation for
the identification of health trends and statistics
globally, and the international standard for
reporting diseases and health conditions.”
Many revisions of ICD have been made and
ICD-9 was not expansive enough for future
healthcare needs with its limited number of
codes and outdated information.
Benefits of ICD-10 PCS Codes

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Even though the transition to ICD-10 in 2015 disrupted the healthcare
industry, the potential analytic benefits likely outweighed the disruption:
Benefits of ICD-10 PCS Codes
Specificity – Allows for higher degree of specificity with
codes composed of seven alphanumeric characters (as
opposed to three to five numerals with a decimal point in
ICD-9). ICD-10 precisely defines procedures with detail
regarding body part, approach, medical devices used, and
other qualifying information.
Scalable – The structure is designed to be scalable as new
procedures are added or new technologies come into play.
Standardized Terminology – Provides precise and stable
definitions of all procedures performed and reflects current
usage of medical terminology and devices.
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Figure 1: The structure of ICD-10 PCS allows for a very high-degree of specificity about
medical procedures with seven alphanumeric characters.
Benefits of ICD-10 PCS Codes

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Specificity
The structure of the ICD-10 PCS system is
designed in a way that has the potential to drive
powerful analytic insights.
Each character can be one of any 34 possible
values (numbers 0-9, and letters A-Z, excluding
letters O and I to avoid confusion with numbers
zero and one).
Additionally, characters have a hierarchical
relationship and the same character placed in
a different position has a different meaning.
(See figure 1)
Benefits of ICD-10 PCS Codes

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Specificity
The following example identifies the meaning of
each character of the code:
Right knee joint replacement = 0SRD0JZ
0 = Medical and Surgical Section
S = Lower Joints
R = Replacement
D = Knee Joint, Right
0 = Open
J = Synthetic Substitute
Z = No Qualifier
Benefits of ICD-10 PCS Codes

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Specificity
Benefits of ICD-10 PCS Codes
Figure 2: Sample Root Operation Table. Source: CMS data.

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Precision and Laterality
Going hand-in-hand with specificity, ICD-10
procedure codes precisely define procedures
with detail regarding body part, approach,
medical devices used, and other qualifying
information.
The addition of laterality, such as right-knee
replacement vs. left-knee replacement can
add additional clinical insights to data.
Additionally, the definition of each character is
a function of its physical position in the code.
Benefits of ICD-10 PCS Codes

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Precision and Laterality
For example, the fifth character of the procedure
code refers to the approach type, so a hospital
administrator could look at the total volume of
open procedures or the total volume of minimally
invasive surgeries using just the fifth character.
Adding the seventh character, an administrator
could look at the total number of biopsies
performed across the system on a specific
body part, for example.
These examples help highlight the powerful
level of specificity available for analysis using
procedure codes.
Benefits of ICD-10 PCS Codes

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Scalable
ICD-9 procedure codes contained only three
to five numeric characters, limiting space for
adding new codes.
ICD-10 PCS was designed to have the
flexibility for adding new codes as new
procedures are added or new technologies
come into play.
Benefits of ICD-10 PCS Codes

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Standardized Terminology
With the release of ICD-10 procedure codes,
CMS standardized the definitions of all
procedure codes.
ICD-10 PCS provides precise and stable
definitions of all procedures performed where
ICD-9 procedure codes were based on
outdated technology and lacked current,
accepted definitions.
While this standardization is in many ways
a benefit of ICD-10 PCS, there are also
some drawbacks.
Benefits of ICD-10 PCS Codes

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Drawbacks include the following:
ICD-10 PCS is specific to the U.S. (not used in
either England or Canada).
ICD-10 does not include eponyms, common
procedure names, terms, or acronyms.
It can be necessary to look at secondary
procedure codes in order to correctly identify
the type of surgery performed.
Drawbacks of ICD-10 PCS
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The standardization of procedure codes
brought stability and eliminated outdated
terminology but did result in the limitations
noted above.
A good example is the elimination of eponyms,
which resulted in the elimination of some well-
known procedures like the Whipple, defined by
the Mayo Clinic as:
…an operation to remove the head of the
pancreas, the first part of the small intestine
(duodenum), the gallbladder and the bile duct.”
Drawbacks of ICD-10 PCS

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With ICD-9, the Whipple was coded as Radical Pancreaticoduodenectomy,
better known as a 52.7. With ICD-10 PCS, the Whipple procedure is now
often defined by the use of the following seven unique procedure codes:
Excision of pancreas, open approach (0FBG0ZZ).
Resection of duodenum, open approach (0DT90ZZ).
Resection of gallbladder, open approach (0FT40ZZ).
Excision of common bile duct, open approach (0FB90ZZ).
Bypass of common bile duct to small intestine, open approach (0F190ZB).
Excision of stomach, open approach (0DB60ZZ).
Resection of stomach, pylorus, open approach (0DT70ZZ).
Drawbacks of ICD-10 PCS
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Similarly, ICD-10 PCS does not include common
procedure names, terms or acronyms, such as
appendectomy, coronary artery bypass grafting
(CABG), or total knee arthroplasty (TKA).
As a result of increased specificity, with some
complex procedures or multiple step surgeries, it
can be difficult to determine what procedure was
performed by looking at just the primary
procedure code.
In many cases, it may be necessary to look at
secondary procedure codes in relationship to
the entire procedure in order to correctly identify
the type of surgery that was performed.
Drawbacks of ICD-10 PCS

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A good example of this is with a total knee
replacement. A total knee revision is often coded
the same as the initial replacement, with the
addition of a secondary procedure code.
Drawbacks of ICD-10 PCS
Total Knee Replacement
Primary Procedure Code:
Replacement of right knee
joint with synthetic substitute,
cemented, open approach
(0SRC0J9).
Total Knee Revision
Primary Procedure Code:
Replacement of right knee
joint with synthetic substitute,
cemented, open approach
(0SRC0J9)
Secondary Procedure Code:
Removal of synthetic
substitute from right knee
joint, open approach
(0SPCOJZ)

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With ICD-10, there can be multiple procedure
codes to document and analyze.
In the case of the knee replacement above, if
someone looked at only the primary procedure
code, he could easily misclassify the procedure.
Between the two procedures–total knee
replacement and total knee revision–there
would be intended variation between the two
procedures such as time metrics in the operating
room, difference in length of stays, readmission
rates, or even cost case events.
Drawbacks of ICD-10 PCS

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Health Catalyst’s Clinical Integration Hierarchy
provides access to complete, contextual
information that may bring healthcare systems
new and unique clinical insights.
With the addition of the Procedural Hierarchy,
clinicians and administrators could look at the
procedure codes in conjunction with the principle
discharge diagnosis to gain insight into why the
patient was hospitalized in the first place.
Procedural and Clinical Hierarchy
Combine to Give New Insights

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Or, they could look at what type of surgeon is
performing a procedure and how the outcomes
compare to a different type of surgical specialty
performing the same operation.
Insights can then be shared in order to
improve patient outcomes and analytics can
be used to facilitate such conversations.
The multitude of scenarios this Procedural
Hierarchy can impact are broad.
Procedural and Clinical Hierarchy
Combine to Give New Insights

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A health system could build clinically defined
criteria, based upon current best-practice
recommendations, incorporating procedure-
based logic that can correctly identify patients
who may benefit from a higher hemoglobin
threshold in comparison to a healthy patient
with trauma.
They could create cohorts within a total
joint application to construct population
as to the benefits of uncemented vs.
cemented arthroplasty.
Procedural and Clinical Hierarchy
Combine to Give New Insights

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Clinical leaders could examine outcomes
when robotic instruments are used vs.
when they are not.
There is an almost endless amount of
possible ways that a healthcare system
can use ICD-10 procedure codes to carve,
slice, and examine their data.
The bottom line from an improvement
standpoint is that Health Catalyst is
continuously building insights and
consolidating data in such a manner
that has not previously been available.
Procedural and Clinical Hierarchy
Combine to Give New Insights

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As with other development, Health
Catalyst is employing a pragmatic
approach by using the Pareto principle
in order to provide the logic for 80 percent
of the cases and leaving 20 percent to be
customized to the specific needs of a
health system or improvement project.
And, as the Procedural Integration
Hierarchy is being built, developers are
creating the ability to pull data directly
from the CMS website when changes in
procedure codes are released.
Procedural and Clinical Hierarchy
Combine to Give New Insights

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This is just one example of the benefits of
DOS™ Marts–the ability of healthcare
systems to rely on experts in a variety of
areas, accessing pre-baked content to
reduce the workload on analysts.
Just like the Clinical Integration Hierarchy,
the Procedural Integration Hierarchy ties
back to the three systems approach.
The best way to achieve and sustain quality
and cost improvement is a systematic
approach (the best practice, analytics, and
adoption systems).
Procedural and Clinical Hierarchy
Combine to Give New Insights

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Healthcare organizations must implement all three
systems to achieve ongoing success.
In addition, the three systems must work together.
Health Catalyst is ultimately much more
than an analytics solution, but also an
access point to experts in a variety of
areas who pave the way for all aspects
of healthcare improvement.
Procedural and Clinical Hierarchy
Combine to Give New Insights

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For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

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More about this topic
Link to original article for a more in-depth discussion.
ICD-10 PCS: Harnessing the Power of Procedure Codes
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Josh is a nurse practitioner who has over 20 years of nursing experience. Most recently, Josh
joined Health Catalyst as a Clinical Outcomes Improvement Director. In this role, he helps
healthcare organizations achieve their improvement goals. Prior to joining Health Catalyst,
Josh worked at Intermountain Healthcare in a respiratory and medical intensive care unit as a
nurse practitioner. During this time, he also worked closely with multiple clinical program leads and
clinicians to develop and implement systemwide applications, protocols, and order sets to reduce
variation in care. You will also, on occasion, find him lecturing to nurse practitioner students at the
University of Utah.
Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Josh Ferguson, APRN, ACNP, ANP-BC

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Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Health Catalyst is a mission-driven data warehousing, analytics and outcomes-improvement company
that helps healthcare organizations of all sizes improve clinical, financial, and operational outcomes
needed to improve population health and accountable care. Our proven enterprise data warehouse
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Health Catalyst was recently named as the leader in the enterprise healthcare BI market in
improvement by KLAS, and has received numerous best-place-to work awards including Modern
Healthcare in 2013, 2014, and 2015, as well as other recognitions such as “Best Place to work for
Millenials, and a “Best Perks for Women.”