Internal Classification of Diseases (ICD) Code Brief

Internal Classification of Diseases (ICD) codes were originally developed for epidemiological purposes, but have now become an important tool in the reimbursement system. The ICD code is owned by the World Health Organization (WHO) and is managed by The National Center for Health Statistics (NCHS) in the United States. “While ICD codes are still used to track the incidence and spread of diseases and injury, their most important facet today is demonstrating medical necessity in claims. In other words, ICD codes explain to the insurance payer why the doctor performed a certain procedure.” The main goal when using the ICD coding system is to code to the highest level of specificity. In other words, a coder should always get to the most granular level of classification detail.

The United States is currently using the ICD-10 code system, which was adopted in 2015. Ideally, the ICD code is set to be updated every 10-15 years, although adoption of new codes tends to lag well behind their release. The upgrade from ICD-9 to ICD-10, for example, involved an increase in the number of billing codes from 13,000 to 68,000. Along with this tremendous increase in codes, there were also formatting and organization changes. The expansive diagnostic codes were intended to smooth billing processes and assist in population health and cost reduction across the health care delivery system. ICD-10 is also more flexible in allowing for the inclusion of codes for new, recently discovered, or expanded diagnoses. ICD-10 has enabled significant improvements in care management, public health reporting, research, and quality measurement.

In January 2022, WHO released ICD-11 for global use. It is expected that ICD-11 implementation will require a minimum of four to five years due to the time, effort, and resources necessary to address the downstream dependencies across the U.S. health care system. Until that time, ICD-10 will continue to be used.

Each code in ICD-10 can be broken down into sections describing the specific classification (e.g. A01.021S):

• Category: Letter followed by two numbers (general type of injury/disease)
• Decimal Point
  • Subcategory: Simple vs. Complex
    • Subclassifications x2: Further explain cause, manifestation, location, severity, and type of injury/disease
      • Extension: Letter describing type of encounter (initial or subsequent)

The ICD-10 code manual is organized into three volumes:

• Volume I: Tabular Index
• Volume II: Alphabetic Index
• Volume III: Hospital Procedure Codes

Learn More

For more information on ICD-10 medical billing and coding, click here.