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Federal Health Care Legislation

October 2006

Washington Federal legislation that would mandate an update of billing codes under the International Classification of Diseases (ICD) has been the focus of debate in Congress. Concern regarding provisions contained in H.R. 4157 that will require all health care providers and payers to switch from ICD-9 to ICD-10 billing codes by October 1, 2010 has been mounting. The timeframe is simply too short, and an October 1, 2012 start date would improve the likelihood of a successful transition. Complicating the matter the Senate approved its Health Information Technology (HIT) bill (S. 1418) in November 2005 without a required conversion to ICD-10.

So what is the problem with converting from ICD-9 to ICD-10 by October 2010? Switching from 24,000 to 207,000 diagnostic and procedures codes required in ICD-10 would require a massive and costly undertaking for the healthcare industry globally. This, at a time when the healthcare industry is still implementing Health Insurance Portability and Accountability Act of 1996 (HIPAA) related mandates. Research conducted in October 2003 confirms that the proposed 2010 timeframe for implementing ICD-10 is not workable.

Estimates show that physicians as a whole will need to spend up to $2.2 billion to make the systems changes from ICD-9 to ICD-10. Before beginning this process, physicians will first have to upgrade all of their HIPAA compliant administrative systems, which cannot handle ICD-10 coding. This upgrade of transactions for claims, eligibility inquiries, remittances, etc., could take two years to complete.

A rush to implement ICD-10 will cause a delay in timely and accurate Medicare payments to millions. Virtually every transition task involves ICD diagnosis codes. Therefore, switching to ICD-10 by 2010 would further overwhelm Medicare contractors' IT departments, leading to potentially serious claims backlogs and payment disruptions.

With the House and Senate passing different bills, the issue now moves to a Senate/House conference committee that will be responsible for reconciling the differences between S. 1418 and H.R. 4157. The Conference Committee should convene after the November elections. Given the technical and cost issues associated with a 2010 start, AmeriHealth supports a compromise start date of October 2012.

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