CMS Final Rule Delays ICD-10 Compliance, Creates Standard for Health Plan Identifiers

By James Swann for Bloomberg BNA

The Centers for Medicare & Medicaid Services Aug. 24 released a final rule confirming a one-year delay in compliance for the ICD-10 code set, moving the date from Oct. 1, 2013, to Oct. 1, 2014.

The final rule, which will be published in the Sept. 5 Federal Register, also adopted a standard for a national unique health plan identifier (HPID) for all health plans and other organizations performing health plan functions, including third-party administrators and clearinghouses.

All health plans and organizations, with the exception of small plans, will be required to obtain an HPID by Nov. 5, 2014, while small plans will have until Nov. 7, 2015.

Covered entities will have to begin using the HPIDs in transactions beginning Nov. 7, 2016.

A proposed rule on the delay of the International Classification of Diseases, 10th Revision and the unique HPIDs was published in April (see previous article).

For the most part, the final rule incorporates all of the provisions of the proposed rule, with the exception of some minor revisions, according to CMS.

ICD-10 Delay.

The one-year ICD-10 compliance delay was prompted by concerns that many health care providers and plans were behind in their implementation efforts, and the final rule said “we are allowing more time for covered entities to prepare for the transition to ICD-10 and to conduct thorough testing.”

The final rule also said the one-year delay would result in $3.6 billion to roughly $8 billion in savings from “the avoidance of costs that would occur as a consequence of significant numbers of providers being unprepared for the transition to ICD-10.”

ICD-10 is intended to be used for classifying health care diagnoses and procedures and entails moving from the 13,000 codes of ICD-9 to roughly 68,000 codes. The expanded code set will allow for the inclusion of new conditions and treatments as well as more granular data.

The American Health Information Management Association (AHIMA) was supportive of the finalized ICD-10 delay, as it “gives the healthcare community the certainty and clarity it needs to move forward with implementation, testing and training,” according to an Aug. 24 statement from AHIMA Chief Executive Officer Lynne Thomas Gordon.

Gordon said ICD-10 is an essential component for the future of the American health care system.

Susan Turney, president and CEO of the Medical Group Management Association, said in an Aug. 24 statement that there was still concern that CMS “has mandated this new code set without having undertaken the necessary due diligence to ensure it will not create debilitating cash flow disruptions for physician practices.” Turney said MGMA also was not certain that the one-year delay provided enough time for full ICD-10 testing, and she urged CMS to implement an ICD-10 pilot test program.

Standardizing Identifiers.

In addition to the ICD-10 compliance delay, the final rule created a standard for adopting unique HPIDs, as required by Section 1104 (c)(1) of the Patient Protection and Affordable Care Act.

The unique 10-digit HPIDs will help end confusion in the health care industry stemming from the multiple identifiers currently being used by health plans, the final rule said.

The unique 10-digit HPIDs will help end confusion in the health care industry stemming from the multiple identifiers currently being used by health plans, the final rule said.

Health care providers have encountered numerous problems due to the multiple identifiers, according to the final rule, including:

• improper routing of transactions;
• transactions that are denied due to confusion over the identifier;
• issues over determining patient eligibility; and
• confusion over health plan identification during claims processing.

Commercial and government health plans are expected to spend $650 million to $1.3 billion obtaining HPIDs, but the final rule said expected savings over the next 10 years are expected to be between $1.3 billion and $6 billion.

Furthermore, the final rule said the HPID requirement is not overly burdensome for the health care industry.

The final rule also mandated the adoption of a data element to serve as an “other entity identifier” (OEID), as well as requiring an “organization covered health care provider to require certain noncovered individual health care providers who are prescribers” to obtain a national provider identifier (NPI).

NPIs were first created in 2004, and their inclusion in the final rule is intended to address a situation where pharmacies need to include a prescribing physician’s NPI on a pharmacy claim, but the prescribing physician does not have one.

The OEID, according to the final rule, is intended for organizations that are not health plans, health care providers, or individuals.

The Workgroup for Electronic Data Interchange (WEDI) said the adoption of unique HPIDs will help the health care industry continue its move toward administrative simplification.