Regulatory Developments

Industry Prepares for ICD-10 Changeover — Again

The WC industry is not required to convert to ICD-10 codes, but so much of the health care industry and payer community is impacted that comp must be prepared to follow suit.
By: | August 10, 2015 • 5 min read

Oct. 1 is the scheduled implementation date for the latest version of the International Classification of Diseases codes. While the workers’ comp industry is not a covered entity under the Health Insurance Portability and Accountability Act and therefore not required to convert from ICD-9 to ICD-10 codes, many practitioners have heeded the advice of experts and have begun preparing.


But questions abound about the transition, and physicians have criticized the costs involved. The American Medical Association continues to raise concerns about the impending transition from ICD-9 to ICD-10 codes.

When the latest compliance date of October 2015 was announced, AMA responded: “While the AMA appreciates that physicians have additional time to comply with ICD-10, we continue to have fundamental concerns about ICD-10 and its implementation, which will not be resolved by the extra time,” said AMA president-elect Steven J. Stack.

“The AMA has long considered ICD-10 to be a massive unfunded mandate that comes at a time when physicians are trying to meet several other federal technology requirements and risk penalties if they fail to do so.”

Payers and others are also questioning the impact on the system once the conversion takes effect.

“ICD-10 [codes] are very detailed. There is one for someone who jumps off water skis after they caught on fire! Who would ever need that code?” — Phil LeFevre, director of business development, Work Loss Data Institute

However, several experts say that while there will be some costs and training involved, things are not as dire as many think.

“The truth is, organizations don’t have to be that scared,” said Phil LeFevre, director of business development for the Work Loss Data Institute, which publishes the Official Disability Guidelines. “I’m the first one to tell you the ICD-10 codes are more detailed than needed. There are 65,000 codes vs. 15,000 [in ICD-9]. Much of the detail is unnecessary from a disability duration and medical management standpoint.”

ICD Background

ICD has been revised for all entities covered by HIPAA. The 10th revision of the diagnostic and procedure coding system was endorsed by the World Health Organization in 1990 to replace the decades old ICD-9 codes.

The codes are used to study health conditions and will also serve as the foundation for documenting diagnoses and associated services provided by health care settings in the U.S.

In October, medical providers will be required to make the conversion to ICD-10 codes despite concerns of the American Medical Association. In one report, the association estimated the cost for small provider practices to convert would be between $56,639 and $226,105 because of the costs of software and training.


Opponents have successfully delayed implementation of ICD-10 a number of times in the last decade. But workers’ comp stakeholders are fairly confident this year’s planned conversion will occur.

“My crystal ball says there will be continued attempts to delay, but the closer we get, the less successful they will be,” said Jennifer Wolf Horejsh, executive director of the International Association of Industrial Accident Boards and Commissions. “The sense I get is that there is a lot of active preparation [among workers’ comp stakeholders]; so people are really cognizant that it is coming up and making sure they can manage that transition as smoothly as possible.”

The Transition

The multitude of delays in implementing the ICD-10 codes has provided organizations with more time to get ready for the conversion. However, many expect snags.

Ohio, which has a monopolistic workers’ comp system, is requiring providers involved in the workers’ comp system to switch to ICD-10. The effort has been ongoing since last year.

“It will definitely slow down the process of bills being submitted and getting paid,” said Noel C. Shepard, an attorney with Frost Brown Todd LLC in Ohio. “Self-insurers are exempt, but realistically, third-party administrators will probably switch eventually. They will probably all switch over. It will delay the billing process, but not of actual allowances.”

TPA Sedgwick, in fact, recently announced it was finalizing changes to its systems “to ensure our readiness for the conversion.” The company is also providing training to its clients on the proper use of the ICD-10 codes with the ODG.

The Work Loss Data Institute began preparing its clients for the conversion about 10 years ago, according to LeFevre. “ICD-10 [codes] are very detailed,” he said. “There is one for someone who jumps off water skis after they caught on fire! Who would ever need that code?”

Since 2011, the ODG have been set up to allow users to toggle between ICD-9 and ICD-10 to understand what is needed.

“For example, [one of the ICD-10 codes] is a lumbar sprain. There are a bunch of codes below that one that are valid, but they don’t change the disability duration or medical management scenario,” LeFevre said. “What we’ve tried to do is highlight in bold the level of detail they need to focus on.”

All of ODG’s tools are set up to be run in both ICD-9 and ICD-10. CPT codes can also be searched through both.

“It’s a lot, especially for the provider, to get the billing right, for claims and medical staff in workers’ comp,” LeFevre said. “We try to accommodate [users] so no matter what you get from your physician, you can find it — either way.”


“I think there is a broad awareness of ICD-10, and people recognize that, yes, even though workers’ comp is exempt from HIPAA so they are exempt, so much of the health care industry and payer community is so impacted by ICD-10 that it certainly impacts workers’ comp, even if indirectly,” Wolf Horejsh said. “I know our state members have the infrastructure that is tied to national health care standards. So things even like fee schedules will be impacted.”


For workers’ comp practitioners, the best advice is to become comfortable with the new codes. The Work Loss Data Institute is providing online training for its clients.

“It doesn’t have to be as daunting as it sounds,” LeFevre said. “You don’t have to unload 65,000 codes on the adjuster. Just go back to the lumbar sprain. There are 15 codes and only one that [relates to] return to work.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

Robotics Risk

Rise of the Cobots

Collaborative robots, known as cobots, are rapidly expanding in the workforce due to their versatility. But they bring with them liability concerns.
By: | May 2, 2017 • 5 min read

When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.

Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.


For some reason,  a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.

The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.

Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.

Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.

“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.

“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).

When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.

Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.

More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.

Cobots Rapidly Gain Popularity

Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.

Bob Doyle, director of communications, Robotic Industry Association

Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.

While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.

“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.

“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.

“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”

If something goes amiss, exposure may fall to many different parties:  the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.

Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?

“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh

Is it a workers’ compensation case or a liability issue?

“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.

But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.

Garry Mathiason, co-chair, robotics, AI and automation industry group, Littler Mendelson PC

In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.

“It’s going to be unique each time,” Kyte said.

“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.

Privacy is another consideration.

If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.

A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.

Growing Pains in the Industry

There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.

He suggests companies take several mitigation steps before introducing cobots to the workplace.

First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.

Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.

The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.

“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.


“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.

“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.

Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.

AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.

Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.

“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]