Fact Sheets

CMS-0013-P: MODIFICATIONS TO HIPAA CODE SETS (ICD-10)

FACT SHEET

OVERVIEW

The U.S. Department of Health and Human Services (HHS) proposed new code sets to be used for reporting diagnoses and procedures on health care transactions.  Under the proposal, the ICD-9-CM code sets would be replaced with the ICD-10 code sets, effective October 1, 2011.  ICD-9, which is 27-years old, is currently used for reporting health care diagnoses and procedure codes in the United States. 

BACKGROUND

The proposed rule would concurrently adopt the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) for diagnosis coding, and the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding.  The new codes would replace the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) Volumes 1 and 2, and the International Classification of Diseases, Ninth Revision, Clinical Modification (CM) Volume 3 for diagnosis and procedure codes, respectively.  Covered entities that use these code sets include health plans, health care clearinghouses, and health care providers who transmit any health information in electronic form in connection with a transaction for which HHS has adopted a standard.

Electronic transactions involve the transmission of health care information for specific purposes.  Code sets are collections of codes that providers use to identify specific diagnoses and clinical procedures in claims and other transactions.

The ICD-10-CM code set is maintained by the National Center for Health Statistics (NCHS) of the Centers for Disease Control and Prevention (CDC) for use in the United States.  It is based on ICD-10, which was developed by the World Health Organization (WHO) and is used internationally.  The ICD-10-PCS code set is maintained by CMS.

RATIONALE

ICD-9-CM is the current code sets standard adopted by the Secretary of HHS under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  ICD-9 is used by all covered entities to report diagnoses and inpatient hospital procedures on health care transactions for which HHS has adopted a standard.  There are a number of shortcomings of ICD-9:

• ICD-9 is outdated, with only a limited ability to accommodate new procedures and diagnoses.
• ICD-9 lacks the precision needed for a number of emerging uses (for example, pay-for-performance and biosurveillance).
• ICD-9 limits the precision of diagnosis-related groups (DRGs) as a result of very different procedures being grouped together in one code.
• ICD-9 lacks specificity and detail, uses terminology inconsistently, cannot capture new technology, and lacks codes for preventive services. 
• ICD-9 will eventually run out of space, particularly for procedure codes.

Adoption of the ICD-10 code sets would be expected to:

• Support value-based purchasing by accurately defining services and providing specific diagnosis and treatment information, such as identifying cases of MRSA and other specific conditions, and would further Medicare’s ability to detect and prevent program abuse.
• Support comprehensive reporting of quality data.
• Ensure more accurate payments for new procedures, fewer rejected claims, improved disease management, and harmonization of disease monitoring and reporting worldwide.
• Allow the United States to compare its data with international data to track the incidence and spread of disease and treatment outcomes because the United States is one of the few developed countries not using ICD-10.

HHS is soliciting comments on the cost/benefit assumptions in the proposed rule, as well as the proposed timeline for covered entity compliance.

Updated versions of current HIPAA electronic transaction standards will be needed in order to accommodate the ICD-10 code sets for claims, remittance advice, eligibility inquiries, referral authorization, and other transactions.  The currently adopted standard, Version 4010/4010A1 of the Accredited Standards Committee X12 group, cannot accommodate the much larger ICD-10 code sets.  Therefore, HHS has also proposed the adoption of Version 5010, which is an update of Version 4010/4010A1, for certain electronic health care transactions.  A fact sheet on the updated electronic transactions standards proposed rule may be viewed at http://www.cms.gov/About-CMS/Public-Affairs/MediaReleaseDatabase/Fact-Sheets/index.html

Both regulations may be viewed at www.cms.hhs.gov/TransactionCodeSetsStands/02_TransactionsandCodeSetsRegulations.asp#TopOfPage.

Comments on the ICD-10 code sets proposed rule are due by 5:00 p.m. Eastern time on Oct. 21, 2008.

Comments on the updated transaction standards proposed rule are due by 5:00 p.m. Eastern time on Oct. 21, 2008.

A news release on both proposed rules may be viewed at http://www.hhs.gov/news/press/2008pres/08/20080815a.html.

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