Client Alerts
January 18, 2011

Are you prepared for the upcoming implementation of ICD-10?

Stites & Harbison, PLLC, Client Alert, January 18, 2011

This month—January 2011—is the time Covered Entities should begin internal testing of Version 5010 standards for electronic claims of the new ICD-10 coding system. All payers, providers, and other Covered Entities under the Health Insurance Portability and Accountability Act (HIPAA) must move to ICD-10-PCS for inpatient hospital procedure coding by the October 1, 2013 deadline.

ICD-10 will allow for the collection of detailed information and has been used to code and classify mortality data in the United States from death certificates since January 1999.

With the current focus on electronic health records and collecting data to determine quality and cost in the health care system, ICD-10 is believed to be a better coding system to capture this information. With more than 68,000 available diagnosis codes and 72,600 available procedure codes, ICD-10 will provide very specific information, improve coding accuracy, and enriches the data available. Since many other countries currently use ICD-10, the movement to ICD-10 in the United States will allow for interoperability and the exchange of health data between the United States and other countries. The United Kingdom, Denmark, France, Australia, Belgium, Germany, and Canada have been using ICD-10 for reimbursement or case mix for more than 10 years.

On January 16, 2009, the Department of Health and Human Services (DHHS) published a final rule that will require all payers, providers, and other Covered Entities under the Health Insurance Portability and Accountability Act (HIPAA) of 1996 to move from ICD-9-CM Volumes 1 and 2 and ICD-9-CM Volume 3 that were first adopted as HIPAA code sets in 2000 to ICD-10-CM diagnosis coding and ICD-10-PCS for inpatient hospital procedure coding.

The ICD-9-CM code set is more than 30-years-old and the DHHS determined that the 16,000 procedure and diagnosis codes are insufficient to continue to allow for the addition of new codes and therefore concluded that ICD-9 is not a fully functioning code set. The ICD-9-CM codes do not allow for detailed information to support programs such as pay-for-performance (P4P) and other quality based measurements.

The important date to remember for all covered entities is October 1, 2013 because claims for services provided on or after this date must use ICD-10 codes for medical diagnosis and inpatient procedures. Failure to implement ICD-10 timely may cause billing delays, increase claim rejections, and cash flow problems for some providers. However, payers, providers, and other covered entities should already be in the planning and testing stages for the October 1, 2013 deadline. January 2011 is the month that Covered Entities should begin internal testing because the current 4010/4010A1 standard cannot accommodate the use of the greatly expanded ICD-10 code sets. The final rule for 5010 implementation was published simultaneously with the ICD-10 final rule.

ICD-10 and 5010 resources are available from the Centers for Medicare and Medicaid Services at

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