Deadline Debate

Citing significant IT modifications and investment, health insurers request a deadline extension for bill requiring upgrade of HIPAA codes.

Health insurers will need until 2012 to transition from the International Classification of Diseases, 9th revision (ICD-9) code set to the ICD-10 code set, according to an IBM (Armonk, N.Y.) study published by America's Health Insurance Plans (AHIP; Washington, D.C.), a national association representing health insurers. ICD-10 is an update to the international standard for recording all actions taken for diseases, injuries and impairments to patients for HIPAA transactions.

The Health Information Technology Promotion Act of 2006 (HR 4157), which is awaiting a vote by the House Ways and Means Committee, recommends the replacement of ICD-9 with ICD-10 by 2009. The benefits of ICD-10 as outlined in the Act include providing carriers and physicians with more-detailed information about a patient's condition and helping to deter claims fraud.

"[ICD-10] has a more-detailed level of analysis and diagnosis that will improve the quality of care a physician can provide," says Mohit Ghose, VP of public relations for AHIP. "If a patient breaks his right leg, the code will capture that [it is the right leg that is broken] as well as the degree of the fracture. The specificity will also prevent fraud."

So Much to Do, So Little Time

HR 4157 includes a recommendation that Congress require providers and payers to switch to ICD-10 by 2009. However, because insurers first must implement a new version of the HIPAA electronic transaction standards -- version 5010 -- to support the expanded code sets, AHIP and several insurance carriers, including Humana (Louisville, Ky.; $6.9 billion in total assets), are requesting the deadline be extended to 2012. "It will be a challenge to implement [ICD-10] by 2009 because we will need to adopt the new version of the HIPAA electronic transaction standards first, which will require at least two years," says Joyce Daugherty, Humana's VP of information technology.

The challenge and the expense of moving ICD-9's 24,000 codes to ICD-10's 207,000 codes by the deadline also has health insurance carriers concerned, according to Kenneth Fody, managing consultant at IBM's Global Business Services and author of the AHIP study. Undertaking the project will affect every system, especially claims systems, because these systems will be directly processing the codes, he explains.

Insurers' IT departments will also have to map out the new code to the old code, and vendors will have to make modifications to insurers' systems before carriers can make the switch, Fody continues. Plus, all implementation must be completed without any interruption in the flow of data so business will go on as usual, he stresses. "Every business process and application will be affected by the change," says Fody.

Further, all companies that deal with the ICD-9 codes -- such as P&C insurers, producers and pharmacies -- will have to modify systems to handle the new codes. A Rand (Santa Monica, Calif.) study commissioned by the National Committee on Vital and Health Statistics (Washington, D.C.) found that hospital implementation of ICD-10 could cost from $425 million to $1.5 billion, and a report released in 2003 by the Blue Cross Blue Shield Association (Chicago) claimed it could cost the healthcare industry up to $14 billion over the next two to three years.

"This is a big IT expense across the board," says Alissa Fox, VP, legislative and regulatory policy, BCBS Association. "By just evaluating insurers we determined it would cost $14 billion across the industry. Since this is a huge expense, carriers should take their time implementing it."

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