Assessment of Final HIPAA ICD 10 Rule
Compliance Requirements
January 23, 2009
Introduction.............................................................................................................................................. 1
Summary.................................................................................................................................................. 1
What Is In The Final Rule? ....................................................................................................................... 2
Compliance Date .................................................................................................................................. 2
Compliance Approach .......................................................................................................................... 2
Impact on Current Payment Systems ..................................................................................................... 2
Other Impacts of ICD 10....................................................................................................................... 3
How are ICD 10 codes formatted?......................................................................................................... 3
Problems with ICD 9 ............................................................................................................................ 4
Benefits of ICD 10................................................................................................................................ 4
Reference ................................................................................................................................................. 5
Introduction
On January 16, 2009, the Department of Health and Human Services (DHHS) published the final rule for
update of the Medical Code Set requirements for the Health Insurance Portability and Accountability Act
(HIPAA) Electronic Data Interchange (EDI) standards. Under the final rule, ICD 10 will be required for the
coding of both diagnosis (ICD-10-CM) and procedures (ICD-10-PCS) for all HIPAA EDI standard
transactions.
Summary
The following are the key points for attention for the requirements of the final rule and its applicability to
Millennium:
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The final rule calls for adoption of ICD 10 CM (diagnosis coding) and ICD 10 PCS (procedure
coding) by October 1, 2013
The compliance date is a “big bang” in that all HIPAA covered entities must adopt ICD 10 for all
HIPAA EDI standard transactions by the above date
o DHHS does not want covered entities (providers, health plans and clearinghouses) to
voluntarily adopt ICD 10 ahead of the compliance date
The largest impact is on hospital inpatient services coding of diagnosis and procedures
ICD 10 adoption DOES NOT affect procedure coding for physician services and hospital
outpatient services
o HCPCS codes will continue to be used for Medicare part B hospital outpatient services
for procedure and services coding
o CPT codes will continue to be used for Medicare part B physician services for procedure
and services coding
The impact also will be upon all hospital departments, information systems, databases, content,
decision support processes and business processes that rely on diagnosis or procedure coding data
based on ICD 9 – presumably all must be updated
There is an available “generalized equivalency map” available from CMS that provides a mapping
between ICD 9 and ICD 10 CM and ICD 10 PCS
o In most cases, the mapping works to be a one to many mapping from ICD 9 to ICD 10
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CMS suggests in their guidance on the use of the mappings that users either use the
concept represented by the ICD 9 code as a basis for rolling up all equivalent ICD 10
codes in presenting data or select the ICD 10 code that most appropriately represents the
use of the ICD 9 code for purpose of crosswalk, presenting trended data or for other
translation purposes
Cerner is currently assessing the impact of ICD 10 on Millennium solutions and Cerner content
offerings
o We anticipate this assessment will be complete in the first part of 2009, and more
guidance will be provided as to our strategy during the first half of 2009
o
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What Is In The Final Rule?
The final rule has several key sections in which DHHS outlines their rationale for proposing the ICD 10
requirement. These are summarized below.
Compliance Date
DHHS has adopted a compliance date of October 1, 2013. In this, DHHS is staggering the compliance date
21 months behind the adopted compliance date for the adoption of the next generation of HIPAA EDI
based on ANSI X-12 v 5010 and the NCPDP D.0 transaction sets.
Compliance Approach
DHHS has finalized the requirement that all covered entities under HIPAA (health plans, providers and
clearinghouses) all be subject to the October 1, 2013 compliance date. In this, DHHS stated the following
as reasons why to keep all covered entities working towards a common compliance date:
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To avoid the issues that would come from providers and payers supporting “dual use” of ICD 9
and ICD 10 in overlapping time periods
The eliminate the costs of maintaining production systems that would need to support both
editions of coding systems using old and new versions
The avoid the disruptions and inconsistencies introduced into to workflow for professional coders
having to continue to maintain two distinct coding systems based on different payer requirements
The reduce the costs of maintaining multiple systems of editing coding information based on both
ICD 9 and ICD 10
To avoid possible redundancy in coding values between ICD 9 and ICD 10 if both were in use at
the same time
To prevent confusion over which coding system is in use to file claims or to report data externally
DHHS does not want covered entities to voluntarily adopt the use of ICD 10 ahead of the compliance date.
DHHS believes that this would result in confusion, and contribute greatly to errors in coding that would
result in claims rejection.
Impact on Current Payment Systems
DHHS did not attempt to address the impact of the adoption of ICD 10 on the Inpatient Prospective
Payment System, Outpatient Prospective Payment System or Physician Fee Schedule relative to how
diagnosis and health services are to be coded for grouping purposes for reimbursement by Medicare or by
Medicaid. Those impacts will be dealt with through the rule making process specific to each of those
reimbursement systems. It can be foreseen that the grouping methodologies as well as the classification of
diagnosis into different severity classifications for Medicare Severity adjusted Diagnosis Related Groups
(MS-DRGs) will eventually have to be completely redone as a result of an adoption of ICD 10. In the
proposed rule for ICD 10 published in August of 2008, DHHS indicated that CMS will make use of a
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crosswalk from ICD 9 to ICD 10 to avoid issues with disruption to the payment system for hospital
inpatient services. CMS will look to use the claims data coded with ICD 10 from the first few years after
ICD 10 implementation to review the severity classifications of the diagnosis codes, and the grouping
impact on DRGs for both diagnosis codes and procedure codes. The impact on the payment system for
hospital outpatient services and physician services will be less as the procedure coding systems for those
payment systems will remain in place based on HCPCS codes and CPT codes respectively. Editing rules
for those payment systems for correct coding edits, medical necessity determination and for claims edits
based on diagnosis and procedure coding information will have to be updated for the impact of the changes
in the diagnosis coding medical code set requirement with ICD 10 CM.
Other Impacts of ICD 10
The adoption of ICD 10 suggests that the coding systems for health services may change for other purposes
as well so that hospital HIM coders may rely on a consistent coding system to underlie all coding and
abstracting requirements. Beyond the Medicare and Medicaid payment systems, and without attempting to
identify an all inclusive list, the change to ICD 10 will have a board set of impacts including but not limited
to
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Restatement of all commercial payer claims adjudication and reimbursement systems that group
based on ICD 9
Redefinition of medical necessity edits, inpatient or outpatient code edits and other coding or
claims edits that use diagnosis and procedure code information based on ICD 9
Restatement of qualification and exclusion criteria for Medicare’s (or any other) quality
measurement requirements for the current pay for reporting programs (or pay for performance
programs) for hospital or physician services
Restatement of the visit coding algorithms of most Evaluation and Management coding assistant
solutions
Restatement of the estimated reimbursement algorithms of most Contract Management solutions
Redefinition of qualification criteria for many care delivery protocols
Redefinition or restatement of criteria used to invoke electronic decision support rules,
documentation forms, patient information/education materials or other electronically delivered
content supplied by electronic medical records systems
Redefinition of algorithms used to classify severity and expected outcomes of a patients condition
Redefinition of coding criteria for the identification of hospital acquired conditions or “never
events”
Breakage of comparability of data for any analytics or reporting that trends over time based on
diagnosis or procedure coding absent use of a crosswalk to convert or re-group the data
Redefinition of qualification parameters and specification requirements for external regulatory
reporting based on diagnosis or procedure codes such as many state discharge or surgical
procedure reporting systems
Redefinition of algorithms used for utilization review and for provider profiling
Redefinition of disease management protocols and algorithms based on diagnosis or patient
condition
Again, this is only a start to a list, but speaks to the kind of impact a change in coding systems can have on
many other operational areas.
How are ICD 10 codes formatted?
ICD 10 CM codes are three to seven alphanumeric characters. The first character is always alpha, and
characters 2-3 are always numeric. Characters 4-7 are alpha or numeric, and a decimal is used after three
characters. The alpha characters are not case sensitive. The characters have the following meaning –
1-3 – Category
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4-6 – Etiology, Anatomic Site and Severity
7 – Extension
ICD 10 PCS codes have seven characters. The characters can be either alpha or numeric in each position.
Alpha characters are not case sensitive, and each code must have seven characters. The characters have the
following meaning 1st – Section/Type of Procedure
2nd – Body System
3rd – Root Operation/Objective of Procedure
4th – Body Part
5th – Approach/Technique Used
6th – Devices That Remain After Completion of the Procedure
7th – Qualifier/Additional Information
The specific meanings of each digit may vary by specialty.
Problems with ICD 9
In general, DHHS offered the following rationale for adopting the ICD 10 medical code set for diagnosis
and procedure codes at this time:
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ICD 9 is running out of space for new codes. CMS has had to begin to assign new codes to
inappropriate sections of ICD-9-CM. An example given in the proposed rule is that for new codes
for heart procedures, CMS has to assign from open ranges of codes from the eye chapter. This
makes for an illogical code assignment given the chapter outlines for available codes.
ICD 9 does not provide appropriate flexibility or specificity for adequate description of medical
procedures given the changes in medical practice that have occurred since its adoption 27 years
ago.
ICD 9 does not support purposes for which coding information is now expected to be used. It was
never designed to support the needs for increased levels of detail for bio-surveillance or pay for
performance programs for quality measures.
ICD 9 does not support definition of new DRGs to an adequate level of specificity to support
definition of new technologies or medical devices.
Many ICD 9 procedure codes are for technologies that are now outdated, and are in need of
retirement.
ICD 9 does not provide for adequate specificity to address descriptive elements of the service such
as bilateral conditions, repeat services or the nature of how a procedure or service was performed
(e.g. by what method)
Multiple ICD 9 procedure codes may be required to delineate how a service was performed
whereas one ICD 10 code could suffice
ICD 9 does not provide for adequate support for mortality reporting or infectious disease reporting
consistent with international coding requirements and needs used to track such statistics across
international boundaries (e.g. most of the rest of the world as well as the World Health
Organization uses ICD 10)
Benefits of ICD 10
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ICD 10 offers significant improvements in coding primary care encounters, external causes of
injury, mental disorders, neoplasms and preventive health
ICD 10 supports coding for advances in medicine and medical technology since the last revision
ICD 10 codes support more detail to be captured on socioeconomic, family relationships,
ambulatory care conditions, problems related to lifestyle and the results of screening exams
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ICD 10 is expandable for future coding needs
ICD 10 supports the concept of laterality allowing for specifying which organ or part of the body
is involved when it could be a bilateral situation
ICD 10 offers new categories for post procedural disorders
ICD 10 offers expanded distinctions for ambulatory and managed care encounters
Reference
The final rule may be accessed at the following location –
http://edocket.access.gpo.gov/2009/pdf/E9-743.pdf
The CMS ICD 10 general equivalency mappings may be found at the following locations –
ICD 10 Procedure Code mapping guide http://www.cms.hhs.gov/ICD10/Downloads/pcs_gemguide_2008.pdf
2. ICD 10 Diagnosis Code mapping guide
http://www.cms.hhs.gov/ICD10/03_ICD_10_CM.asp#TopOfPage
The American Health Information Management Association’s (AHIMA) ICD 10 Preparation checklist may
be found at http://www.ahima.org/icd10/ICD-10PreparationChecklist.mht
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information which may not be reproduced or transmitted without the express written consent of Cerner.