Health Information Management

Transition to ICD-10 to include HIPAA electronic transaction standards update

HIM-HIPAA Insider, September 1, 2008

On August 22, HHS announced a proposed regulation to replace the ICD-9 code sets now used to report healthcare diagnoses and inpatient procedures with the more advanced ICD-10-CM code set. The proposal calls for implementation to occur October 1, 2011. Reasons for the transition include:
  • ICD-9 lacks preventive service codes and the ability to adopt new procedure and diagnosis codes, use terminology consistently, and implement new technology
  • ICD-9 is running out of space, especially for procedure codes.
  • ICD-10 will pinpoint services, diagnoses, and treatment information that will support value-based purchasing and expand Medicare’s resources in detecting and preventing program abuse
  • ICD-10 will ensure accurate payments for new procedures, reporting of quality data, fewer rejected claims, greater disease management, monitoring, and worldwide reporting
  • The United States is one of the last countries still not using ICD-10, and when adopted, the ICD-10 facilitate comparison and sharing of  global data and tracking of  international diseases, remedies, and outcomes
Current HIPAA electronic transaction standards will require updating for claims and other transactions, according to a second proposed rule. ”The currently standard, Version 4010/4010A1 of the Accredited Standards Committee X12 group, cannot accommodate the much larger ICD-10 code sets. Therefore, HHS has also proposed the adoption of Version 5010, which is an update of Version 4010/4010A1, for certain electronic health care transactions,” according to the CMS Web site. 
The two rules, enacted in response to recent HIPPA standard updates, will apply to all HIPPA covered entities, including health plans, clearinghouses, and certain healthcare providers.
Click on the following links to read the proposed rules:
Fact Sheets for both proposed rules are available at


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