Breaking News: HHS proposes 1-year delay in ICD-10 implementation deadline

Carl Natale
by Carl Natale

The Department of Health and Human Services (HHS) proposed a rule that would extend the ICD-10 compliance deadline until Oct. 1, 2014.

It is part of  a proposed rule that would establish a unique health plan identifier (HPID) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). That proposal is supposed to save the healthcare industry $4.6 billion. I think the federal government is going to repeat that whenever someone complains about the cost of ICD-10 implementation.

[Vote in our poll: Does the one-year extension of ICD-10 implementation give you enough time to comply?]

You can download the proposed rule as it will be published in the Federal Register. Note there will be a 30-day commenting period on it. Details to follow.

The Centers for Medicare & Medicaid Services (CMS) has a fact sheet that focuses on the deadline change. It's important to note this is a deadline for everyone. Not a staggered deadline. Here's why:

"All covered entities must transition to ICD-10 at the same time to ensure a smooth transition to the updated medical data code sets.   Failure of any one industry segment to achieve compliance with ICD-10 would negatively impact all other industry segments and result in rejected claims and provider payment delays.   HHS believes the change in the compliance date for ICD-10, as proposed in this rule, would give providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition among all industry segments. "

The CMS believes it has to happen all at once. And the extra year should be all that's needed to test appropriately.

This proposed rule is almost 200 pages. I'm assuming that's mostly due to the HPID provisions. The fact sheet explains the need for uniform identifiers:

"Currently, health plans are identified in standard transactions using multiple identifiers that differ in length and format.   Health care providers are frustrated by the following problems associated with the lack of a standard identifier: the routing of transactions, rejected transactions due to insurance identification errors, and difficulty determining patient eligibility."

And HHS wants to create an “other entity” identifier (OEID) because:

"The primary purpose of the HPID and the OEID is for use in the HIPAA standard transactions.   The most significant benefit of the HPID and the OEID is that they will increase standardization within the HIPAA standard transactions."

There is a lot here. Stay tuned for more information and analysis.