Some Thoughts on X12 5010 and ICD-10

The ICD-10 code set has 200,000 codes, almost 10 times the 24,000 codes in the ICD-9 code set. Providers and payers will need to completely redesign their business processes and systems to handle these hundreds of thousands of new codes. Before the transition to ICD-10 can begin, industry must move to the next generation of HIPAA transactions (version 5010) because the current version (4010) will not work with ICD-10. Version 5010 is a major re-write of the HIPAA transaction standards, with more than 850 individual changes.

The Department of Health and Human Services recently proposed rules to implement 5010 by April 2010 and ICD-10 by October 2011. This may appear to be a staggered implementation of these daunting initiatives but in reality, it is not quite that easy. There is no debate as to whether or not 5010 must be implemented prior to conversion to ICD-10 as the expanded diagnosis codes cannot be worked into the standard HIPAA transactions until the appropriate fields have been expanded. The question becomes, is 18 months enough time to have the standard transactions modified, tested, and implemented prior to moving to the enhanced code set? Many think that the timeline is not realistic.

Preparing for 5010 and ICD-10 can hardly be classified under regular system maintenance and operations. Carrying the hefty estimated price tag of $10-20 million, preparing for these changes really falls into to the category of major system modification. As such, many States will be asking for contracted help to perform this work. The feds have hinted that they will pay enhanced (90%) funding for the 5010/ICD-10 work; qualifying for this funding will require an APD and then either a contract modification or an RFP. If a State were to begin today by writing and submitting a planning APD to explain to the feds their approach and plans for 5010/ICD-10 compliance, it would likely be a full year before the final implementation APD and contract mod were approved. If an RFP is involved, add 6-8 months for the award process. On this schedule, work would not even begin until late 2009/early 2010, hardly in time to meet the first deadline of April 2010.

The National Committee for Vital and Health Statistics--an advisory body to HHS—made a recommendation to implement HIPAA 5010 first followed by ICD-10. If the NCVHS process were followed and started now, the soonest ICD-10 could be completed is late 2013, this seems like a more realistic timeframe.

Another consideration is the provider side of the equation. A key lesson learned from HIPAA is that provider education and outreach is critical to ensure providers are aware of the changes that must be made and adequate time is given to make those changes. Providers are looking at a vastly expanded set of options for assigning diagnosis codes. This means that they all must be trained in the awareness and use of the codes and many practice management systems will need to be enhanced, or likely replaced in order to comply with use of the expanded codes. Will this occur on schedule currently presented for payer system compliance? Probably not. The enhancements for 5010 and ICD-10 are not “backward compatible” and so we are looking at the potential for crippling claims backlogs, inaccurate and delayed payments, and an inability to detect fraud and abuse. Is the accelerated timeline worth all of this?

The MITA community needs to give some serious thought into how MITA fits with these two initiatives. How can resources be integrated in such a way that states are moving toward both HIPAA II and MITA compliance in a combined effort? Can MITA business services at level three maturity be built as 5010/ICD-10 compliant? It doesn’t seem practical to keep MITA and HIPAA II as separate activities; there must be a way to kill two birds with one stone here.

Thoughts?