HHS postpones ICD-10 compliance date
Roy Franco
March 14, 2012

On February 16, 2012, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced the postponement of the International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10) compliance date of October 1, 2013. Although a new date has not been announced, this postponement period will provide health care entities and Non-Group Health Plan (NGHP) insurers additional time to manage the tremendous administrative burden of shifting from the use of International Classification of Diseases 9th Edition diagnosis and procedure codes (ICD-9) to ICD-10 diagnosis and procedure codes.

ICD-9 codes are well known to payers in the health care system partially because the new Section 111 Reporting Rules require the use of ICD-9 codes to standardize injury reporting. As you may well know, Section 111 added mandatory reporting requirements for liability insurers, no-fault insurers and workers compensation insurers providing coverage to Medicare beneficiaries.

In January 2009, HHS announced the intention of using ICD-10 codes as the health care industry standard, with the original compliance date set for just under four years later. Even with the lengthy preparation period, the transition from ICD-9 to ICD-10 is not an easy one. ICD-10 codes add more specific information, including side of the body and/or limb (right/left), type of encounter (initial/subsequent), and so forth. Due to this specificity, the number of codes has increased over five fold, from 13,000 to 68,000. Additionally, ICD-10 codes can be up to 7 characters in length, with both alpha and numeric digits. The ICD-10 codes are also more flexible, allowing for new diseases to be incorporated as they emerge. Find out more about the differences here.

Although the ICD-10 allows for greater precision and accuracy in recording diagnoses and procedures, it may also be an administrative headache for health care entities and insurers. All health care entities that are covered under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) are required to use ICD-10 codes by the compliance date. Some providers, in anticipation of the original compliance date less than two years from now, have already begun the transition to ICD-10. An online survey done by the Centers for Medicare & Medicaid Services (CMS) in December 2011 indicated that out of the 401 health care providers (including hospital and pharmacy chain administrators and health care practice managers) who participated, Eighty-seven percent (87%) of providers were aware of the transition from ICD-9 to ICD-10 codes and seventy-eight percent (78%) were aware of the specific deadline for compliance. Seventy-nine percent (79%) of providers were actively taking steps to transition to ICD-10, and eighty-two percent (82%) believed they would be compliant by the deadline. Find out more about this survey here.

The MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation User Guide Version 3.3 of December 16 2011 indicates that the CMS plans to implement the new ICD-10 diagnosis codes by October 2013, and that complete instructions and requirements for the use of ICD-10 codes would be provided at a later date. At the current time, ICD-10 codes are not accepted. The CMS has not provided any further guidance since the announcement from the HHS regarding the plans to postpone the compliance date, but it is anticipated that Section 111 reporting requirements will mandate the use of ICD-10 codes at the time of the new compliance date. Click here for the User Guide.

Despite the postponed compliance date, HHS has not made any indication that the transition will not go forward in the eventual future. Franco Signor recommends that insurers continue to consider this transition and move forward with the plan of implementing ICD-10 codes. While the ICD-10 procedure and diagnosis codes may be complicated and a bit daunting, this new set of procedure and diagnosis codes will benefit Franco Signor clients in the long run. The increased specificity of the ICD-10 codes will allow for injuries related to the claim to be more appropriately characterized at every step of the recovery process. Additionally, the use of these new codes will reduce any confusion caused by the COBC when suspending benefits that may have been erroneously related to the underlying tort.

Franco Signor will help its clients by ensuring that the proper codes are used at the time the claim is reported, on a Conditional Payment Letter and the Final Demand Letter. This will reduce the risk of unnecessary exposure for our clients or interruption of future benefits to Medicare beneficiaries that are not part of the settlement.

There are several free tools available on the internet that may be helpful in converting ICD-9 codes to ICD-10 format. One such ICD-10 conversion tool can be found on the AAPC website along with a helpful section devoted to information regarding ICD-10. However, as mentioned in the disclaimer, a clinical analysis may be needed to determine which code is appropriate for the sake of accuracy in reporting.

For updated information and announcements regarding ICD-10 compliance and Section 111 please visit the Department of Health and Human Services website, the CMS ICD-10 website and the CMS website regarding Section 111 reporting.