What You Need to Know About the New ICD-10-CM Codes and Their Focus on Severity

The healthcare landscape is constantly evolving, and staying ahead of regulatory and coding changes is essential for providers and billing professionals alike. One of the most significant developments this year is the update to the ICD-10-CM codes, particularly the shift toward more detailed severity documentation. These ICD-10-CM updates are not just about new codes—they’re about improving diagnosis coding accuracy, reflecting patient complexity, and aligning with value-based care initiatives.

Whether you're a physician, coding specialist, or practice manager, understanding how these medical coding changesimpact documentation, billing, and reimbursements is critical. In this blog post, we’ll break down what you need to know about the latest ICD-10-CM updates and how to prepare for the increased focus on severity.

The Shift Toward Greater Specificity in ICD-10-CM Updates

Each year, the Centers for Disease Control and Prevention (CDC) releases updates to the ICD-10-CM code set, and the 2025 revisions mark a continued emphasis on capturing the severity of illness more accurately. With over 395 new codes, 25 deletions, and 13 revisions, these changes reflect the growing importance of documenting patient complexity.

The new codes target a wide array of specialties, from cardiology and neurology to orthopedics and mental health. However, what sets this year's update apart is the intentional design of codes to reflect clinical severity, comorbidities, and risk factors that directly influence patient care and cost.

For example, new codes now allow for better differentiation between types and severities of dementia, substance abuse disorders, and infections. This aligns with the broader healthcare industry's transition to value-based care, where outcomes and patient acuity play a larger role in reimbursement decisions.

Why Severity Documentation Matters More Than Ever

The focus on severity isn't new, but the pressure to get it right is growing. Healthcare payers—including Medicare and commercial insurers—are using severity documentation to determine patient risk levels, allocate appropriate resources, and assess provider performance.

Accurate documentation of disease severity ensures:

Proper reimbursement
Appropriate risk adjustment
Reduced claim denials
Better alignment with HCC (Hierarchical Condition Categories)

Shoreline Medical Billing Company emphasizes this point in its ongoing provider training and audits. “The new ICD-10-CM updates are raising the bar for specificity. You can no longer afford to use vague diagnosis codes. Precision is not just preferred—it’s required,” says a senior coding consultant at Shoreline Medical Billing Company.

Key Diagnosis Coding Changes to Watch

Here are a few of the notable changes in the 2025 ICD-10-CM updates that are centered around diagnosis coding and clinical severity:

Neurological Conditions
Expanded coding for different forms and severities of epilepsy and cognitive impairment.

New codes for mild, moderate, and severe dementia with behavioral disturbances.
Infectious Diseases
Additional specificity for fungal infections and post-viral syndromes, including those linked to long-COVID cases.
Mental Health
Refined codes for mood disorders, including specific designations for bipolar subtypes and associated symptoms.
Substance Use Disorders
Better classification of use, abuse, and dependence for substances like opioids, alcohol, and stimulants.

These updates are more than just administrative changes—they’re a directive to medical providers to document patient conditions thoroughly and with clinical accuracy.

The Documentation-Coding Connection

Even with the best coders on your team, if the clinical documentation isn’t there, coders can’t assign the appropriate codes. This is where providers often fall short. The new ICD-10-CM codes demand that clinicians describe not just the condition but also its severity, progression, and any complications.

Shoreline Medical Billing Company offers clinical documentation improvement (CDI) services to bridge the gap between what providers write and what payers require. “We work closely with physicians to educate them on how their documentation influences coding, which in turn affects revenue. It’s a team effort,” the company states.

How to Prepare for ICD-10-CM 2025 Changes

Preparing for these medical coding changes involves a multi-pronged approach that includes education, process updates, and system audits. Here’s how to get started:

Provider Education
Conduct specialty-specific training sessions to explain how the new codes apply to your area of practice. Focus on the nuances of severity and comorbidities.
Update EHR Templates
Review and revise your electronic health record (EHR) templates to prompt providers for the level of detail required by the new codes.
Conduct Coding Audits
Have your existing charts audited for compliance with the updated ICD-10-CM codes. Shoreline Medical Billing Company recommends quarterly audits to catch errors before they become billing issues.
Improve CDI Processes
Partner with a company like Shoreline Medical Billing Company to establish a strong CDI workflow that supports your coders and educates your providers simultaneously.
Use Technology Wisely
Leverage computer-assisted coding tools and artificial intelligence where possible to streamline code selection and reduce errors.

Consequences of Inadequate Severity Documentation

Failing to document and code appropriately can have significant financial and compliance consequences:

Underpayment due to under-coded risk
Overpayment audits if coding exceeds documentation
Denied claims for vague or unspecified diagnoses
Reduced quality scores in payer and public health reports

Medical practices that partner with experts like Shoreline Medical Billing Company can proactively address these issues before they lead to audit risks or lost revenue.

Conclusion

The latest ICD-10-CM updates for 2025 represent more than just an expansion of the code set—they reflect a broader trend in healthcare toward data-driven decision-making, risk adjustment, and outcome-based reimbursement. Accurate diagnosis coding and detailed severity documentation are now non-negotiable components of modern medical practice.

To ensure your organization is ready, stay informed, train your team, and consider working with experienced billing partners who understand the nuances of ICD-10-CM and can provide strategic guidance. Shoreline Medical Billing Company is committed to helping providers adapt to coding changes with precision and confidence.

Don’t let complexity derail your compliance and reimbursement. Stay ahead with proper documentation and coding strategies.