HCIM

According to the RAND Science and Technology Policy Institute’s comprehensive technical report on The Costs and Benefits of Moving to the ICD-10 Code Sets, providers will incur costs for computer reprogramming, the training of coders, physicians, and code users, and for the initial and long-term loss of productivity among coders and physicians. The cost of sequential conversion (10-CM then 10-PCS) is estimated to run around $425M to $1.15B in one-time costs, plus somewhere between $5 and $40 million a year in lost productivity.

RAND calculated many of its cost savings estimates on the benefits resulting from the additional detail that ICD-10-CM and ICD-10-PCS will offer. The estimated savings from more accurate payments to hospitals for new procedures ranges from $100M to $1.2B. Benefits from fewer rejected claims range between $200M and $2.5B, and an estimated $100M to $1B will be saved due to fewer exaggerated claims. The identification of more cost-effective services and direction of care to specific populations would result in a benefit of $100M to $1.5B. This is in addition to any benefits that would come from better total disease management and better directed preventive care.

Blue Cross and Blue Shield sponsored a study to determine costs to the health care industry in adopting ICD-10-CM and ICD-10-PCS. The study indicated a cost range of $5.5-13.5B for systems implementation, training, loss of productivity, re-work, and contract re-negotiations during a 2-3 year implementation period. Over half of the costs would be borne by health care providers. Long term recurring costs for loss of productivity were estimated at $150-380M.

CMS Progress in Implementing the New Standards
CMS is well into the process of readying its FFS Medicare systems to handle the 5010/D.0 standards. All Medicare systems will be ready to handle the new standards by January 1, 2011. Medicare plans for its systems to handle the current 4010A standard and the new 5010/D.0 standards for incoming claims and inquiries and for outgoing replies and remittances from January 1, 2011 until January 1, 2012. This will allow providers to begin using the new standards on January 1, 2011, while providing an additional year for providers who are not ready.

In addition, where possible, CMS will be making system enhancements concurrent with the 5010/D.0 changes. These enhancements include capabilities such as:
• Implementing standard acknowledgement and rejection transactions across all jurisdictions (TA1, 999 and 277CA transactions)
• Improving claims receipt, control, and balancing procedures
• Increasing consistency of claims editing and error handling
• Returning claims needing correction earlier in the process
• Assigning claim numbers closer to the time of receipt

What do Providers need to know about the Administrative Simplification Act?
The Administrative Simplification Act (ASCA) requires the use of electronic claims (except for certain rare exceptions) in order for providers to receive Medicare payment. Therefore, effective January 1, 2012, providers must be ready to submit your claims electronically using the X12 Version 5010 and NCPDP Version D.0 standards. This also is a prerequisite for implementing the new ICD-10 codes. The HIPAA standards, including the X12 Version 5010 and Version D.0 standards, are national standards and apply to transactions with all payers, not just with Fee-for-Service (FFS) Medicare. Providers must be prepared to implement these transactions with regard to their non-FFS Medicare business as well. Medicare expects to begin transitioning to the new formats January 1, 2011 and ending the exchange of current formats on January 1, 2012.

Why the change from 4010A to 5010?
Key issues for adapting HIPAA 5010 rules are:

• To accommodate ICD-10 coding.
• 4010 technology is outdated. It has been in use for five years and was written three years prior to that.
• Many of the situational and required rules did not fit health care industry practices. This is especially true for the 278, where many entities had reply on companion guides and thus became non-standard.
• Over 500 change requests are included in 5010.
• Most rules in 5010 are the same in all transactions and are more consistent.
• Includes D.0 of the NCPDP transactions for retail pharmacies.
• Adapts version 3.0 of the NCPDP for subrogation of Medicaid pharmacy payments.
• Clear rules will reduce analysis, time and minimize need for companion guides.
• Improved eligibility responses and better search options will improve efficiency and reduce phone calls.
• Clarification of misunderstood areas resulting in consistent implementation of 835 (Remittance Advice).

The X12 5010 transactions are meant for administrative communications between trading partners. These administrative communications include Claims, Enrollment, Eligibility, Claim Status, and Auths and Referrals.

5010 ushers in improvements in structural, front matter, technical, and data content (such as improved eligibility responses and better search options). The adjustments required for the 5010 transactions to enable them to facilitate the ICD-10 codes are simple. Space for expanded code length and additional instances of diagnoses need to be added. Space for a single digit code indicating the version of ICD codes being billed needs to be added also.

HIPPA5010 – Changes

Enrollment

• Enrollment subtotals and reporting categories
• Improved privacy protections
• New Maintenance Reason Codes and policy amount qualifiers

Premium Payment

• Addition of Outer Adjustment Loop
• Additional deductions and payment reporting
• Added Remittance Delivery Method

Eligibility & Benefits Inquiry Response

• Unique ID to clarify subscriber and dependent relationship
• Subscriber ID required on later translations (278, 837, etc.)
• Requires support of different search options
• 45 Service Type Codes added to support queries

Pre-Authorizations & Referrals

• Event Level Detail Reporting includes info on conditions
• Expanded Service Level Detail
• External Code Set – Rejection Reason
• Reconsideration Process

Claims – Professional, Institutional, and Dental

• Attending Physician defined in new usage rule
• Pay-to Address changed only when different from Billing Provider
• Billing Providers carry NPI as Primary Identifier & must be same for all payers
• Rendering Provider added to Institutional Claims
• Patient/Subscriber reporting changed
• POA indicators on Institutional Claims moved from K3 to HI
• Separate HI segments for Principal, Admitting, E-Codes and Patient Reason Codes

Claims Status Inquiry and Response

• Prescriptions and NDC numbers reporting allowed
• Claim Status Codes and Multiple Claim Identifiers allowed
• Modification of Subscriber and Dependent rules

Remittance

• Policy Information can be reported for Denials, Appeals, and Corrections
• Additional Information on Technical Contact and Payer Website allowed
• Clarity for Claims Overpayment Recovery and Balancing Added
• Remark Code usage in connection with Reason Codes
• HIPAA 5010 Transaction

For side-by-side comparisons between the 4010 and 5010 codes, click here.

What is HIPAA?
HIPAA, which stands for the American Health Insurance Portability and Accountability Act of 1996, is a set of rules to be followed by doctors, hospitals and other health care providers. HIPAA took effect on April 14, 2006. HIPAA helps ensure that all medical records, medical billing, and patient accounts meet certain consistent standards with regard to documentation, handling and privacy.

In addition, HIPAA requires that all patients be able access their own medical records, correct errors or omissions, and be informed how personal information is shared used. Other provisions involve notification of privacy procedures to the patient. HIPAA provisions have led in many cases to extensive overhauling with regard to medical records and billing systems.

HIPAA Mandated Transactions
Before anyone can switch to ICD-10, industry must upgrade all ten HIPAA transactions to a new version (version 5010) because the current version (4010) will not work with ICD-10. This is a major upgrade, a “re-architecture of the HIPAA standards.” Industry needs version 5010 not only to handle ICD-10 codes, but also because the current transaction standards are increasingly out of date. The 4010 version standards were developed in 1998, and the implementation guides that were initially adopted for HIPAA were written in 2000. Over the last 8 years, the Accredited Standards Committee X12 has made numerous changes to the original transaction standards that have not yet been made available to the industry via adoption under HIPAA. 

A copy of the final rule for HIPAA transactions, also released on January 16, 2009, can be found here. The effective date for this transition is January 1, 2012 and for small Health Plans (fewer than 50 participants), the effective date is January 1, 2013. There is no contingency plan. These are hard dates and must be met in order to meet the October 1, 2013 date for ICD-10 conversion.

Timeline
The implementation date for ICD-10 is October 1, 2013, and applies to all encounters and discharges occurring on or after that date. According to data from AHIMMS, one entity cannot force another entity to be compliant prior to the said date, although testing will require a great deal of communication between providers, suppliers, and insurers. HHS believes that this implementation date timeline allows an adequate time frame for both providers and insurers.

Cost of the Transition
HHS estimates the transition will cost the industry (including providers, suppliers, payers, and software firms) approximately $1,878.68 million. As a ROI, over the next 15 years the estimated benefits will be $4,539.63 million. One of the largest costs of the ICD-10 implementation is the revisions required to payer systems. This is greater for those payers who have more than one core system. These systems will need to identify applications that use or are dependent on ICD-9 codes and change methodologies defined. Initial observation identifies benefits, claims processing, provider contracts, fee schedules, authorizations, and referrals as well as HIPAA transactions. Although different systems may have other dependencies not herein identified.

Requirements
Health Systems will need to be upgraded to handle the new character requirements, they must implement HIPPA 5010, and they will need to access both ICD-9 and ICD-10 codes for a period of two years as the country makes the transition.

Transition Aids
General Equivalency Mappings (GEMs) were developed by CMS and the CDC to translate from ICD-9 to ICD-10 and vice versa. These mappings and crosswalks will be critical, since the differences in ICD-9 and ICD-10 do not allow for a one to one mapping. While in some instances there is a one-to-one match from an ICD-9 code to an ICD-10 code, most of the ICD-9 codes translate to several ICD-10 codes. Once ICD-10 is implemented, a committee will discuss the need to continue updating these mappings for a minimum of three years after the final compliance date. Modified code sets will include instructions on how data elements of health information encoded prior to the modification may be translated to preserve the informational value of the element that existed before the modification. Any modification to a code set will be implemented in a manner that minimizes the disruption and cost of complying with the modification.

ICD–10 consists of:

• tabular lists containing cause-of-death titles and codes (Volume 1)
• inclusion and exclusion terms for cause-of-death titles (Volume 1)
• description, guidelines, and coding rules (Volume 2)
• an alphabetical index to diseases and nature of injury, external causes of injury, table of drugs and chemicals (Volume 3)

ICD–10 Chapter Headings:

• Chapter 1: Certain Infectious and Parasitic Diseases (A00-B99)
• Chapter 2: Neoplasms (C00-D49)
• Chapter 3: Disease of the blood and blood-forming organs and certain disorders involving the immune mechanism (D50-D89)
• Chapter 4: Endocrine, Nutritional, and metabolic Diseases (E00-E90)
• Chapter 5: Mental and behavioral disorders (F01-F99)
• Chapter 6: Diseases of nervous System and Sense Organs (G00-G99)
• Chapter 7: Diseases of Eye and Adnexa (H00-H59)
• Chapter 8: Diseases of the Ear and Mastoid Process (H60-H99)
• Chapter 9: Diseases of Circulatory System
• Chapter 10: Diseases of Respiratory System (J00-J99)
• Chapter 11: Diseases of Digestive System (K00-K94)
• Chapter 12: Disease of Skin and Subcutaneous Tissue
• Chapter 13: Diseases of the Musculoskeletal System and Connective Tissue (M00-M99)
• Chapter 14: Diseases of Genitourinary System (N00-N99)
• Chapter 15: Pregnancy, Childbirth and the Puerperium (O00-O99)
• Chapter 16: Newborn (Perinatal) (P00-P96)
• Chapter 17: Congenital malformations, deformations and chromosomal abnormalities (Q00-Q99)
• Chapter 18: Symptoms, signs and abnormal clinical and laboratory findings, not elsewhere classified (R00-R99)
• Chapter 19: Injury, poisoning, and certain other consequences of external causes (S00-T88)
• Chapter 20: External Causes of Morbidity (V01-Y95)
• Chapter 21: Factors influencing health status and contact with health services (Z00-Z99)

ICD–10–CM Diagnosis Codes
The CDC’s National Center for Health Statistics (NCHS) developed the ICD–10–CM code set, following a voluntary consensus-based process and working closely with specialty societies to ensure clinical utility and subject matter expert input into the process of creating the clinical modifications, with comments from a number of prominent specialty groups and organizations that addressed specific concerns or perceived unmet clinical needs encountered with ICD–9–CM.

NCHS also had discussions with other users of the ICD–10 code set, specifically nursing, rehabilitation, primary care providers, the National Committee for Quality Assurance (NCQA), long-term care and home health care providers, and managed care organizations to solicit their comments about the ICD–10 code set. There are approximately 68,000 ICD–10–CM codes. ICD–10–CM diagnosis codes are three to seven alphanumeric characters. The ICD–10–CM code set provides much more information and detail within the codes than ICD–9–CM, facilitating timely electronic processing of claims by reducing requests for additional information.

ICD–10–PCS Procedure Codes
ICD-10-PCS (Procedure Coding System) is currently designated to replace Volume 3 of ICD-9-CM for hospital inpatient use only. ICD–10–PCS has no direct relationship to the basic ICD–10 diagnostic classification, which does not include procedures, and has a totally different structure from ICD–10–CM. The cooperating parties and especially CMS have made it very clear that there is no intention for ICD-10-PCS to replace CPT for the identification of physician work. Its only intention is to identify inpatient facility services in a way not directly related to physician work, but directed towards allocation of hospital services.

CPT remains the procedure coding standard for physicians, regardless of whether the physician services were provided in the inpatient or outpatient setting. Any third party payer asking for Volume 3 procedure codes to be submitted along with CPT codes for outpatient services is in violation of HIPAA regulations and subject to fines by CMS.

Some preliminary inpatient hospital testing of ICD-10-PCS has indicated that the new procedure coding system is problematic to learn for both experienced and inexperienced coders.

ICD–10–PCS is sufficiently detailed to describe complex medical procedures. This becomes increasingly important when assessing and tracking the quality of medical processes and outcomes, and compiling statistics that are valuable tools for research. ICD–10–PCS has unique, precise codes to differentiate body parts, surgical approaches, and devices used. It can be used to identify resource consumption differences and outcomes for different procedures, and describes precisely what is done to the patient. ICD–10–PCS codes have seven alphanumeric characters and group together services into approximately 30 procedures identified by a leading alpha character. There are 16 sections of tables that determine code selection, with each character having a specific meaning. No SSO has developed, adopted, or modified a standard code set that is suitable for reporting medical diagnoses and hospital inpatient procedures for purposes of administrative transactions.

Key issues in adopting ICD-10- CM are:

• ICD-9 is 30 years old and is outdated.
• ICD-9 is running out of spaces for new codes. Codes added in recent years are in the wrong chapters because the correct chapters were full, with nowhere to add new codes.
• ICD-9 codes cannot reflect current and evolving medical technologies.
• The current codes are limited in their descriptions. New codes will allow for a greater level of detail, including etiology, manifestation, and laterality.
• ICD-9 does not provide the increased level of detail needed for emerging needs like biosurveillance and competitive purchasing.
• ICD-9 lacks the ability needed to assign additional detailed classification, new diseases, and other advances.
• ICD-9 uses terminology inconsistently and lacks codes for preventive services.
• ICD-9 limits the precision of diagnosis-related groups, resulting in different procedures grouped together in one code.
• ICD-10 increases the degree of detail that HHS needs to measure quality outcomes, such as the quality of performance measures needed for hospital reporting programs. The exactness and accuracy currently unavailable using ICD-9 will be an integral benefit of claims-based, value-based provider initiatives and payment.
• ICD-10-CM provides much more information and detail within the codes.
• ICD-10-CM facilitates timely electronic processing of claims by reducing requests for more information.
• ICD-10-CM offers an improvement in coding primary care encounters, external causes of injury, mental disorders, neoplasm, and preventative health.
• ICD-10-CM reflects advances in medicine and medical technology.
• ICD-10-CM captures more detail on socioeconomics, ambulatory care conditions, problems related to lifestyle, and results of screening tests.
• ICD-10-CM provides more space for future expansion.
• ICD-10-PCS is detailed enough to describe complex medical procedures.
• ICD-10-PCS uses unique and precise codes to differentiate body parts, surgical approaches, and devices used.
• ICD-10-PCS can be used to identify resource consumption differences, such as outcomes for different procedures and describing precisely what is done to the patient.
• The transition to ICD-10 will enable the use of interoperability standards specified by the Healthcare Information Technology Standards Panel, include the use of SNOMED-CT^® (Systemized Nomenclature of Medicine-Clinical Terms). Benefits of using SNOMED-CT^® are increased when used with ICD-10-CM and ICD-10-PCS. Mapping of these to use these two code sets are underway.

ICD–10 and the Development of ICD–10–CM and PCS
The ICD–10 code sets provide a standard coding convention that is flexible, providing unique codes for all substantially different health conditions. It also allows new procedures and diagnoses to be easily incorporated as new codes for both existing and future clinical protocols. ICD–10–CM and ICD–10–PCS provide specific diagnosis and treatment information that can improve quality measurements and patient safety, and the evaluation of medical processes and outcomes. ICD–10–PCS has the capability to readily expand and capture new procedures and technologies.

Expectations of the new ICD-10 code sets:

• Allow more accurate definition of services and provide specific diagnosis and treatment information for a wider variety of illness and disease
• Provide more accurate data for tracking, reporting, reimbursement, trending, and purchasing decisions
• Reduce claim rejection, improve disease management, and allow for more accurate and comprehensive revenue