HHS Announces Proposed Rules Implementing Transition to ICD-10 Code Sets and Updated Electronic Transaction Standards

On August 15, 2008, the Department of Health and Human Services (HHS) announced a proposed regulation that would convert the current ICD-9-CM code sets to the expanded ICD-10 code system, effective October 1, 2011. ICD-10 is the updated version of the ICD-9-CM code sets now used in both the public and private sectors to report diagnoses on all health care standard administrative transactions, and for coding procedures on standard inpatient hospital transactions.

In a separate proposed regulation, HHS also proposed to adopt the updated X12 standard, Version 5010, and the National Council for Prescription Drug Programs standard, Version D.0, for electronic transactions of health claims. Under the proposal, compliance with the transaction sets would be required by April 1, 2010. Version 5010 is the next version of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) electronic transaction standards and is essential to use the ICD-10 system, as the current HIPAA electronic transaction standards Version 4010 is not compatible with ICD-10.

The ICD-9-CM code sets, developed nearly 30 years ago, contain 17,000 codes and can no longer be adequately expanded. The ICD-10 code system would replace ICD-9-CM Volumes 1 and 2 for diagnosis coding and Volume 3 for procedure codes. The new system has more than 155,000 codes to accommodate advances in diagnoses and procedures and will facilitate more granular data collection and reporting.

Individually these two regulations represent significant changes to practicing physicians, hospitals, third-party payers, clearinghouses, and software vendors. The transition to ICD-10 system will increase the number of possible codes ten-fold. Moreover, Version 5010 differs significantly from Version 4010. Even more burdensome will be the simultaneous implementation of ICD-10 and 5010.

Both of these regulations have been long anticipated. The Heart Rhythm Society and the broader medical community strongly advocated for HHS to thoughtfully analyze the implementation logistics of both regulations, noting that simultaneous adoption of ICD-10 and 5010 will be an extremely complex and costly endeavor for all industry stakeholders.

The Heart Rhythm Society has long advocated for a workable timeframe that would allow for testing and verification of 5010 before ICD-10 is implemented, and has requested that HHS complete a comprehensive pilot test of ICD-10 prior to a national roll-out to identify potential problems and develop solutions to assist in the national transition process. The Society also urged HHS to include in the transition process adequate time to train coders and has asked the agency share the implementation timeframe so that industry stakeholders can prepare and budget for the changes accordingly.

Comments on the both ICD-10 and the updated transaction standards proposed rules will be accepted until October 21, 2008. Both regulations are available for viewing on CMS’ website until published in the Federal Register. CMS is expected to post fact sheets on its website to describe both proposed rules