HIPPA Filing a Medical Claim - ICD-10-PCS

Replacing ICD-9 For All Covered by HIPAA

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There has been a lot of talk about ICD-10 lately. It is not new. It was implemented by the World Health Organization (WHO) in 1993 to replace ICD-9 and is in almost every country in the world, except the United States. Let’s learn more about ICD-10.

In the United States, it usually refers to the U.S. clinical modification of ICD-10: ICD-10-CM. This code set was scheduled to replace ICD-9-CM, our current U.S. diagnostic code set, on Oct. 1, 2013. However, the government, as of this writing, has delayed for an unspecified time the implementation date for the ICD-10 diagnostic and procedural coding system.

Why It Is Needed

The classification system is organized scientifically and each three-digit category can have only 10 subcategories. Most numbers in most categories have been assigned diagnoses. Medical science keeps making new discoveries, and there are no numbers to assign these diagnoses.

ICD-10-CM will allow for better analysis of disease patterns and treatment outcomes that can advance medical care. These same details will streamline claims submissions.

What’s Different?

The guidelines, conventions, and rules are very similar. The organization of the codes is very similar. Many improvements have been made to coding. The big differences between the two systems are differences that will affect information technology and software. For example, the number of codes currently is around 13,600. This will increase to 69,000.

ICD-10-CM is for use in all U.S. health care settings. Diagnosis coding under ICD-10-CM uses 3 to 7 digits instead of the 3 to 5 digits used with ICD-9-CM, but the format of the code sets is similar.

Inpatient Procedure Reporting

ICD-10-PCS is a code set designed to replace Volume 3 of ICD-9-CM for inpatient procedure reporting. It will be used by hospitals and by payers. It will require significant training for users. Physicians should be aware that documentation requirements under ICD-CM-PCS are quite different, so their inpatient medical record documentation will be affected by this change.

ICD-10-PCS uses 7 alphanumeric digits instead of the 3 or 4 numeric digits used under ICD-9-CM procedure coding. Coding under ICD-10-PCS is much more specific and substantially different from ICD-9-CM procedure coding.


While there will need to be significant education and training for coders, billers, practice managers, physicians, and other healthcare personnel to fully implement this major code change, it can take place in a staged process. Organizations such AAPC can help.

Anyone responsible for a practice’s coding faculty, health information management, and other ICD-10 implementation must prepare well in advance of code set training. The Center for Medicare and Medicaid Services (CMS) advises that:

  • Providers
    • Develop an implementation strategy that includes an assessment of the impact on your organization, a detailed timeline, and budget. Check with your billing service, clearinghouse, or practice management software vendor about their compliance plans. Providers who handle billing and software development internally should plan for medical records/coding, clinical, IT, and finance staff to coordinate on ICD-10 and HIPAA Version 5010 transition efforts.
  • Payers
    • Review payment policies since the transition to ICD-10 will involve new coding rules. Ask your software vendors about their readiness plans and timelines for product development, testing, availability, and training for Version 5010 and ICD-10. You should have an implementation plan and transition budget in place.
  • Software vendors, clearinghouses, and third-party billing services
    • You should have products and services in development that will allow payers and providers to fully implement ICD-10 on October 1, 2013. Begin talking to your customers now.

    CMS has developed four Implementation Handbooks as additional resources to assist the health care industry with the transition from ICD-9 to ICD-10 codes. Each guide provides detailed information for planning and executing the ICD-10 transition process. Use the guides as a reference whether you're in the midst of the transition or just beginning the process.

    The appendix of each handbook references relevant templates which are available for download in both Excel and PDF files below. The templates are customizable and have been created to help entities clarify staff roles, set internal deadlines/responsibilities and assess vendor readiness.

    Affected Parties

    ICD-10 will affect diagnosis and inpatient procedure coding for everyone covered by the Health Insurance Portability and Accountability Act(HIPAA), not just those who submit Medicare or Medicaid claims. The Department of Health and Human Services mandated that transaction standards for all electronic health care claims must switch to HIPAA Version 5010 from Version 4010/4010A in preparation for ICD-10 implementation.

    While there will be some initial pain in implementing these new codes, ultimately it should aid in more accurate billing and that, in turn, should help with patient and family satisfaction with the industry.

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