HIPAA's administrative simplification provisions include standardized electronic transactions and code sets. Physician practices must transition from the current version to the new version by January 1, 2012.
As providers are going to transition to the standardized electronic transactions format, they also have to upgrade from ICD-9 to ICD-10. The effective date to the new ICD-10 is set to October 1, 2013. The best time to ensure a smooth transition is now. As providers are purchasing new EHR systems, they need to make sure that the new ICD-10s are also loaded in the system they are purchasing.
Who is affected by the transition to ICD-10?
HIPAA-covered entities affected by the standardized electronic transition include:
- Providers, such as physicians, alternate-site providers, rehabilitation clinics and hospitals;
- Health plans;
- Healthcare clearinghouses; and
- Business associates such as billing services and vendors.
Practice management system vendors are an important part of this process, but are not HIPAA-covered entities.
What are the standardized electronic transaction changes?
- Remittance Advice (EOBs)
- Claim status inquiry/response
- Eligibility inquiry/response
In addition to the above, Medicare will also be adopting three more electronic formats:
- Transaction acknowledgement
- Functional acknowledgement
- Claims acknowledgement
The diagnosis format change, albeit costly, is a necessary change. ICD-9 is limited and many diagnosis categories have become full, making it difficult to create new codes. Currently, ICD-10 is at 70,000 codes and has room to expand even more.
With all the changes in healthcare, one that would have the biggest impact on the providers' cash flow is going to be the transition from ICD-9 to ICD-10.