Health and Human Services (HHS) Secretary Kathleen Sebelius announced Aug. 24 a rule finalizing a one-year proposed delay – from Oct. 1, 2013, to Oct. 1, 2014 – in the compliance date for use of ICD-10 codes, which classify diseases and health problems. 

These code sets, known as the International Classification of Diseases, 10th Edition diagnosis and procedure codes, will include some 155,000 codes for new procedures and diagnoses that officials say will improve the quality of information available for quality improvement and payment purposes.



"We believe the change in the compliance date for ICD-10 gives covered health care providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition by all covered entities," wrote HHS officials in a summary of the final rule.

[See also: Final rules for Stage 2 meaningful use released.]

"We are allowing more time for covered entities to prepare for the transition to ICD-10 and to conduct thorough testing," they added. "By allowing more time to prepare, covered entities may be able to avoid costly obstacles that would otherwise emerge while in production."

In the Regulatory Impact Analysis of this final rule, HHS officials estimated a cost avoidance of $3.6 billion to nearly $8 billion, just from avoiding the costs related to a large number of health care providers being unprepared for ICD-10.

In January of 2009, the HHS finalized a rule to adopt ICD-10, replacing the previously used ICD-9-CM. This rule established an original compliance date of October 1, 2013.

ICD-10 codes differ from ICD-9 codes in that they maintain a completely different structure. ICD-9 codes are predominantly numeric, containing 3 to 5 digits; ICD-10 codes, however, are alphanumeric and contain 3 to 7 characters. 

According to CMS officials, the transition to ICD-10 is due to several factors -- one being that ICD-9 codes lack necessary detail, and contain limited data concerning a patient's medical condition and hospital inpatient procedures.

Moreover, ICD-9 is a 30-year-old code set that officials say is outdated and inconsistent with contemporary medical practices. 

The ICD-10-PCS (Procedure Coding System) contains approximately 87,000 diagnoses codes, up from ICD-9's 13,000 codes. 

The ICD-10-CM (Clinical Modification) contains approximately 68,000 diagnoses codes, up from ICD-9's 4,000 codes. 

CMS offers a comparative code sample, comparing an ICD-9 diagnostic code with an ICD-10 diagnostic code: 

ICD-9-CM diagnosis code: 813.15, open fracture of head of radius

ICD-10-CM diagnosis code: S52123C, Displaced fracture of head of unspecified radius, initial encounter for open fracture type IIIA, IIIB, or IIIC. 

The rule announced Aug. 24 also establishes a unique health plan identifier. This is one of a series of changes required by the Affordable Care Act to cut red tape in the healthcare system and, according to government officials, could save up to $6 billion over 10 years.

Today's rule is the fourth administrative simplification regulation issued by HHS under the health reform law. 

These rules will go into effect on Nov. 5, 2012. 

[See also: Finalized ICD-10 delay keeps process moving forward by keeping CFOs engaged.]