HIPAA Medical Data Code Sets

In 2000, HHS adopted the International Classification of Diseases (ICD), 9th Revision, Clinical Modification — known as the ICD-9 — for use in HIPAA standard transactions as the method for coding diseases, their manifestations and their causes. The ICD is developed and maintained by the World Health Organization (WHO), and the ICD-9 has been used in the United States for nearly 30 years. At the time, HHS considered but ultimately rejected the adoption of the version that was then the most current (the ICD-10), opting instead to stay with the ICD-9.

Some of the shortcomings of the ICD-9 include the limited total number of codes (13,000 for diagnoses and 3,000 for procedures) and the inability to support emerging needs such as quality measurements linked to provider reimbursement (generally known as pay-for-performance). As a result, HHS is now proposing that the ICD-9 be replaced by the newer version, the ICD-10, which was adopted in 1990 by the WHO and is widely used outside the United States. The ICD-10 supports 68,000 diagnosis codes and 87,000 procedure codes, and it is based on current usage of medical terminology and devices.

HHS is proposing that covered entities³ comply with the ICD-10 standard by October 1, 2011. It proposes that internal testing begin in December 2009. Some in the industry have applauded both the adoption of the ICD-10, as well as the quick timeframe, while others have been more critical and skeptical that compliance can reached by 2011. HHS asks that any proposals for alternatives to the ICD-10 that may be more effective or less costly be discussed in comments to HHS.

HIPAA Standard Transactions

The new proposed rule updates the EDI transaction standards (the ASC X12 format⁴) from Version 4010/4010A to Version 5010. According to HHS, the new version has many advantages over the existing version. For example, for the Health Care Claims standard (ASC X12 837), the new version separates diagnosis code reporting by principal diagnosis, admitting diagnosis, external cause of injury and reason for visit. For the Enrollment and Disenrollment standard (ASC X12 834), the new version adds codes to explain coverage changes, such as changes in student status, age limitation, life partner changes and other changes in coverage status.

The new proposed rule also updates the retail pharmacy format from Version 5.1 to Version D.0. According to HHS, among other advantages, the new version responds to changing business needs necessitated by the creation of the Medicare Part D outpatient prescription drug program.

The proposed compliance date for the updates to the transaction standards would be April 2010, with testing of system changes beginning in April 2009.

Implications for Plan Sponsors

No immediate action is required by plan sponsors because this is a proposed rule. However, it is important for plan sponsors to be generally aware of these potential changes, especially if HHS retains a fast compliance timeline in the final rules. In the short term, discussions and contract negotiations with system vendors and third-party administrators may be affected as these entities begin to consider the cost and difficulty of complying with these new requirements on behalf of their group health plan clients.

As with all issues involving the interpretation or application of laws, plan sponsors should rely on their legal counsel for authoritative advice on HIPAA and related guidance. Sibson Consulting can be retained to work with plan sponsors and their attorneys on compliance with HIPAA.

---

1	Two proposed rules were published in the Federal Register on August 22, 2008. They are available at http://edocket.access.gpo.gov/2008/pdf/E8-19296.pdf and http://edocket.access.gpo.gov/2008/pdf/E8-19298.pdf. (Click on the following text to return to Capital Checkup.)
2	A table on page 3 of The Segal Company’s September 2000 In Depth, “Final HIPAA Rules Will Require Health Plans to Accept Electronic Claims by October 2002” describes the EDI standards. (Click on the following text to return to Capital Checkup.)
3	Covered Entities include health plans, health care providers, and health care clearinghouses. (Click on the following text to return to Capital Checkup.)
4	The ASC X12 format was created by the Accredited Standards Committee (ASC) of the American National Standards Institute (ANSI), a private organization that helps sets standards for governing business relationships. The ASC specializes in standards for the insurance industry. (Click on the following text to return to Capital Checkup.)

 

Capital Checkup is Sibson Consulting's periodic electronic newsletter summarizing activity in Washington with respect to health care and related subjects. Capital Checkup is for informational purposes only. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice. A separate web page lists back issues of Capital Checkup.

Back to Top