One of the biggest changes in healthcare is perhaps no more than two years away, yet state workers’ compensation agencies, mono-line insurers, and bill review companies have largely ignored the issue, warns the International Association of Industrial Accident Boards and Commissions (IAIABC).

ICD-10 is the abbreviated term used to refer to the International Classification of Diseases, Tenth Revision. ICD-10 is a huge step up from the current ICD-9, which is more than 30 years old and outdated. The change to a new coding system will have wide-ranging systemic effects on how hospitals and physicians do business. At the least, it will require a reassessment of clinical, financial and administrative work processes.

Indeed, it is because of the immense complexity involved in making the switch to ICD-10 that the American Medical Association recently succeeded in getting an extension to the implementation deadline of October 1, 2013. The Centers for Medicare & Medicaid Services has said it will extend the deadline but has not announced the new timeline.

As the AMA explains, ICD-10 codes provide greater specificity to identify disease etiology, anatomic site, and severity. The new codes allow for identifying the body system, root operation, body part, approach, and device involved in a procedure.

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All indications are rates are rising or are poised to rise in workers’ compensation after one of the longest soft markets in recent memory. Recently and over the past year or so, the National Council on Compensation Insurance filed for rate increases of 7.3% in South Carolina, 10.5% in Virginia, 2.9% in Georgia, 8.9% in Florida, and 0.4% in Tennessee. Rates in North Carolina went up 0.6% in April 2011.

NCCI says rates are expected to rise in about 20 of the 30 states it covers. The group reports calendar year combined ratios nationally deteriorated from 101 in 2008 to 110 in 2009 to 115 in 2010.

The Council of Insurance Agents & Brokers also reports an unmistakable trend. In the fourth quarter of 2010, workers’ compensation rates declined -3.4%, and declined -1.6% again in the first quarter of 2011. But rates increased 2.6% in the second quarter, 4.1% in the third quarter, and 7.5% in the fourth quarter of 2011.

Standard and Poor’s sees nothing but poor underwriting results for the industry. "All signs are pointing to more unprofitable years ahead for the U.S. workers’ compensation insurance industry, even as the rates are improving in certain states," it noted in January 2012.

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