NRPM: Standards for Electronic Transactions. Code sets

05/07/1998

[Please label any written comments or e-mailed comments about this section with the subject: Code sets]

 

a. Background

The administrative simplification provisions of HIPAA require the Secretary of HHS to adopt standards for code sets for administrative and financial transactions. Two types of code sets are required for data elements in the transaction standards to be established under HIPAA: (1) large code sets for medical data, including coding systems for:

  • diseases, injuries, impairments, other health related problems, and their manifestations;
  • causes of injury, disease, impairment, or other health-related problems;
  • actions taken to prevent, diagnose, treat, or manage diseases, injuries, and impairments and any substances, equipment, supplies, or other items used to perform these actions; and (2) smaller sets of codes for other data elements such as race/ethnicity, type of facility, and type of unit.

A separate HIPAA implementation team co-chaired by representatives from HCFA, the Centers for Disease Control/National Center for Health Statistics, and the National Institutes of Health/National Library of Medicine, and including members from other interested HHS agencies and Federal Departments, was established to recommend the code sets that should become HIPAA standards for medical data. HHS efforts to identify candidate medical data code sets were coordinated with the NCVHS Subcommittee on Health Data Needs, Standards, and Security. The smaller sets of codes for other data elements in transactions standards are part of the transaction standards themselves and are specified in their implementation guides.

The following medical data code sets are already in use in administrative and financial transactions:

ICD-9-CM: The International Classification of Diseases, Ninth Revision, Clinical Modification, classifies both diagnoses (Volumes 1 and 2) and procedures (Volume 3). All hospitals and ambulatory care settings use it to capture diagnoses for administrative transactions. The procedure system is used for all in-patient procedure coding for administrative transactions. The ICD-9-CM was adopted for use in January 1979.

The ICD-9-CM Coordination and Maintenance Committee is a Federal interdepartmental committee charged with maintaining and updating the ICD-9-CM. Requests for modification are handled through the ICD-9-CM Coordination and Maintenance Committee; no official changes are made without being brought before this committee. Suggestions for modifications come from both the public and private sectors and interested parties are asked to submit recommendations for modification prior to a scheduled meeting.

Modifications are not considered without the expert advice of clinicians, epidemiologists, and nosologists (both public and private sectors). The meetings are open to the public and are announced in the Federal Register; all interested members of the public are invited to attend and submit written comments. Meetings are held twice each year.

Approved modifications become effective October 1 of the following year. Changes to ICD-9-CM are published on the NCHS and HCFA websites, as well as by the American Hospital Association (AHA) and other private sector vendors.

CPT: Physicians’ Current Procedural Terminology is used by physicians and other health care professionals to code their services for administrative transactions. CPT is level one of the Health Care Financing Administration Procedure Coding System (HCPCS).

CPT codes are updated annually by the AMA. The CPT Panel is comprised of 15 physicians, 10 nominated by the AMA and one each nominated by Blue Cross/Blue Shield of America (BCBSA), HIAA, HCFA, and AHA. Meetings are not open to the public.

Alpha-numeric HCPCS: Alpha-numeric Health Care Financing Administration Procedure Coding System (HCPCS) contains codes for medical equipment and supplies; prosthetics and orthotics; injectable drugs; transportation services; and other services not found in CPT. Alpha-numeric codes are level 2 of HCPCS. Its use is generally limited to ambulatory settings. The Omnibus Budget Reconciliation Act of 1986 requires the use of HCPCS in the Medicare program for services in hospital outpatient departments.

Level II of HCPCS is updated annually and is maintained jointly by the BCBSA, the Health Insurance Association of America and HCFA.

HCFA’s regional offices assure coordination of local code assignments among the payers in a State; local codes must be approved by HCFA’s central office to assure they do not duplicate national codes in CPT or Level II of HCPCS.

Decisions regarding additions, deletions and revisions to Level II of HCPCS are made by the Alpha-Numeric Editorial Panel. This Panel, which meets three times a year, is comprised of representatives of the BCBSA, HIAA, and HCFA; the meetings are not open to the public. There are formal mechanisms to coordinate this Panel’s activities with CPT and the American Dental Association’s (ADA) procedure coding system.

The revised HCPCS is available free of charge as a public use file.

CDT: Current Dental Terminology is used in reporting dental services. CDT codes are also included in alpha-numeric HCPCS with a first character of D.

Codes are revised on a five-year cycle by the ADA through its Council on Dental Benefits Program. Meetings are not open to the public.

NDC: National Drug Codes are used in reporting prescription drugs in pharmacy transactions and some claims by health care professionals. The codes are assigned when the drugs are approved or repackaged and may be found on the packaging of drugs.

i. Candidates for the Standards

The principal sources of input to the recommendations for medical data code sets were:

(a) The ANSI HISB Standards Inventory.

The inventoried code sets are:

  • ICD-9-CM, which consists of both diagnoses and procedure sections. The diagnosis system is widely used in the health care industry. All hospitals and ambulatory care settings use it to capture diagnoses. The procedure system is used for all in patient procedure coding.
  • ICD-10-CM for diagnosis, which is under development as a replacement to the diagnosis section of ICD-9-CM and not yet in use in this country. ICD-10 was developed by the World Health Organization and has been implemented in approximately 37 countries to report mortality data. These are data that are taken and coded from death certificates. However, since our country’s need for morbidity data cannot be satisfied by ICD-10, the United States is preparing a clinical modification of ICD-10 (ICD-10-CM).

    The public has been given an opportunity to review and comment on the current draft of ICD-10-CM. The final draft should be available in the summer of 1998.

  • ICD-10-PCS for procedures, which is under development for use in the U.S. only as a replacement to the procedure section of ICD-9-CM.
  • CPT, which is used by all physicians and many other practitioners to code their services. It is also used by hospital outpatient departments to code certain ambulatory services.
  • SNOMED (Systematized Nomenclature of Medicine), which is being used by the developers of computer-based patient record systems. It is not used in administrative transactions.
  • CDT, which is used by all practicing dentists to code their services for administrative transactions.
  • NIC (Nursing Interventions Classification), which is not used in administrative transactions in this country.
  • LOINC (Logical Observation Identifier Names and Codes), which is being used in a pilot-test by the Centers for Disease Control to report tests as evidence of a communicable diseases. It is also being tested in electronic transactions involving detailed clinical laboratory tests and results. It is not used in administrative transactions.
  • HHCC (Home Health Care Classification system), which is not being used as a reporting system in this country.

(b) A more extensive inventory of existing coding and classification systems prepared by the coding and classification implementation team itself and evaluated against the general HIPAA standards evaluation criteria (as found in section I.B., Process for developing standards for this proposed rule).

This larger inventory (which will be placed on the home page of the National Center for Health Statistics at: http://www.cdc.gov/nchswww/nchshome.htm) does not include any additional viable candidates for the initial standards for administrative code sets to be established under this proposed rule. It does contain some additional systems that may be applicable to elements of the claims attachments standard (to be issued on a later timetable) and to eventual HIPAA recommendations to the Congress regarding full electronic medical records.

(c) The oral and written testimony submitted at an NCVHS public hearing to discuss medical/clinical coding and classification issues in connection with the requirements of HIPAA on April 15-16, 1997. The following entities presented testimony at the hearing: AMA, AHA, American Health Information Management Association, American College of Obstetricians and Gynecologists, American Academy of Pediatrics, American Nurses Association, National Association for Home Care, ADA, Family Practice Primary Care Work Group, National Association of Children’s Hospitals and Related Institutions, Food and Drug Administration, College of American Pathologists, the Omaha System, developers of new nomenclature systems, research groups, publishers, consultants in coding, managed care organizations, software vendors, and informatics specialists.

(d) The NCVHS' recommendations to the Secretary, HHS regarding codes and classifications.

(e) Comments received in response to presentations at professional meetings and at the July 9, 1997, public meeting held by HHS on progress on selecting the initial HIPAA standards.

For the hearing on April 15-16, 1997, the NCVHS invited interested organizations representing both the users and developers of medical/clinical classification systems to present written and/or oral testimony responding to the following questions.

“-- What medical/clinical codes and classifications do you use in administrative transactions now? What do you perceive as the main strengths and weaknesses of current methods for coding and classification of encounter and/or enrollment data?

“-- What medical/clinical codes and classifications do you recommend as initial standards for administrative transactions, given the time frames in the HIPAA? What specific suggestions would you like to see implemented regarding coding and classification?

“-- Prior to the passage of HIPAA, the National Center for Health Statistics initiated development of a clinical modification of the International Classification of Diseases- 10 (ICD-10-CM), and HCFA undertook development of a new procedure coding system for inpatient procedures (called ICD-10-PCS), with a plan to implement them simultaneously in the year 2000. On the pre-HIPAA schedule, they will be released to the field for evaluation and testing by 1998. If some version of ICD is to be used for administrative transactions, do you think it should be ICD-9-CM or ICD-10-CM and ICD-10-PCS, assuming that field evaluations are generally positive?

“-- Recognizing that the goal of P.L. 104-191 is administrative simplification, how, from your perspective, would you deal with the current coding environment to improve simplification, reduce administrative burden, but also obtain medically meaningful information?

“-- How should the ongoing maintenance of medical/clinical code sets and the responsibility, intellectual input and funding for maintenance be addressed for the classification systems included in the standards? What are the arguments for having these systems in the public domain versus in the private sector, with or without copyright?

“-- What would be the resource implications of changing from the coding and classification systems that you currently are using in administrative transactions to other systems? How do you weigh the costs and benefits of making such changes?

“-- A Coding and Classification Implementation Team has been established within the Department of Health and Human Services to address the requirements of P.L. 104-191; the Team's charge is enclosed. Does your organization have any concerns about the process being undertaken by the Department to carry out the requirements of the law in regard to coding and classification issues? If so, what are those concerns and what suggestions do you have for improvements?”

In general, those testifying at the April 15-16 hearing recommended that systems currently in use be designated as standards for the year 2000, since potential replacements were not yet fully tested and could not be implemented throughout the health care system by 2000. Testimony supported moving to ICD-10- CM for medical diagnoses after the year 2000 (different timetables were mentioned). Testimony provided by representatives from the American Psychiatric Association described the ongoing efforts to make the Diagnostic and Statistical Manual of Mental and Behavioral Disorders (DSM) completely compatible with ICD. The American Psychiatric Association has crosswalked the appropriate ICD-9-CM codes to what appear in the DSM for its diagnostic categories and is doing the same for ICD-10-CM for diagnosis. The mapping between DSM and ICD-10-CM for diagnosis is more precise than is possible for ICD-9-CM so the APA favors moving to ICD-10- CM for diagnosis as soon as possible.

Many of those testifying emphasized the need to change to a less fragmented, overlapping, and duplicative approach to procedure coding, but sometime after the year 2000. Different potential approaches to achieving a more integrated procedure coding system were mentioned. Many identified current variations in the implementation of coding systems and the use of local HCPCS codes as problems that should be addressed.

In general, those testifying approved the implementation team’s charge, which includes an initial focus on the administrative standards for the year 2000 and longer term attention to recommendations for the more clinically-detailed vocabulary needed for full electronic medical records. Some of the developers of vocabularies and classifications who presented testimony emphasized the potential usefulness of their systems for full computer-based patient records, rather than for the administrative transactions that are the focus of the initial HIPAA standards.

Comments on codes and classifications sets made at the June 3-4, 1997, Health Data Needs, Standards and Security Subcommittee hearings in San Francisco, California echoed those heard at the April hearing.

On June 25, 1997, the NCVHS submitted the following recommendations to the Secretary of HHS regarding standards for codes and classifications for administrative transactions:

"The Committee recommends that diagnosis and procedure coding continue to use the current code sets because replacements will not be ready for implementation by the year 2000. ICD-9-CM diagnosis codes, ICD-9-CM Volume 3 procedure codes, and HCPCS (including Current Procedural Terminology (CPT) and Current Dental Terminology (CDT)) procedure codes should be adopted as the standards to be implemented by the year 2000. Annual updates to ICD-9-CM and HCPCS should continue to follow the schedule currently used. In addition, we recommend that you advise industry to build and modify their information systems to accommodate a change to ICD-10-CM diagnosis coding in the year 2001 and a major change to a unified approach to coding procedures (yet to be defined) by the year 2002 or 2003. We recommend that you identify and implement an approach for procedure coding that addresses deficiencies in the current systems, including issues of specificity and aggregation, unnecessary redundancy, and incomplete coverage of health care providers and settings."

At the July 9, 1997, public meeting on progress on selecting the HIPAA standards, the implementation team presented an overview of its planned recommendations for coding and classification standards for the year 2000. The team’s recommendations were similar to those of the NCVHS but included the use of NDC codes for pharmacy transactions that the NCVHS did not address. The implementation team did not recommend a specific timetable for changes in the standards after the year 2000. The team believed that its recommendations for changes after the year 2000 should await the results of field testing of ICD-10-CM for diagnosis and ICD-10-PCS for procedures (which should be available in March 1998) and further consideration of options for moving toward a more integrated approach to procedure coding.

One of the coding systems that the implementation team considered to be promising for future implementation was the Universal Product Numbers (UPNs) system. The UPN system is a product numbering technology that uses human readable and bar code formats to identify products. A bar code and human readable number, which is unique to a particular product, is printed on the label or box as part of the production line process. There are currently two separate and different UPN coding systems that are generally accepted and recognized for health care products. One is numeric, a fixed 14 digit number, and the other an alpha-numeric format, a variable length number 8 to 20 digits. The numeric format is the system of the Health Care Uniform Code Council (UCC) and the alpha-numeric format is used by the Health Industry Business Communications Council (HIBCC). The first series of digits are assigned by one of these two private companies and identify the manufacturer or a repackager. The remaining digits are assigned by the manufacturer or repackager and are assigned according to the user’s own standards and specifications. A manufacturer or repackager can apply to either one of these companies to use its system. The application fees, which are collected by either UCC or HIBCC, vary based on the manufacturer’s or repackager’s sales volume.

The Department of Defense has started to use UPNs for its prime vendor program. Currently, there are purchasers and providers of medical equipment that are using the UPN system for inventory purposes, but, at this time, there are no insurers that pay for health care products using the UPN system. California Medicaid, however, has plans to begin using UPNs as part of its system.

At this time, approximately 30 percent of the health care products do not have a UPN assigned to them. For this reason, in addition to the fact that no insurer currently uses UPNs for reimbursement, UPNs were not included in the initial list of standards. However, it is a coding system that bears close examination during the next few years as a possible replacement for alpha-numeric HCPCS codes for health care products. Some consideration is being given to conducting a demonstration study in the Medicare program on the use of UPNs for reimbursement.

Comments on the use of the UPNs as a national coding system are being sought. In particular, comments on issues such as timing of implementation, any complications presented by the existence of multiple bodies issuing UPN codes, the acceptability of varying lengths and formats, and the frequent changes in manufacture and packaging size would be helpful.

ii. Changes to HCPCS for Implementation in the Year 2000

In proposing the use of the existing coding systems as the standards for the year 2000, many participants at public meetings voiced concern about overlaps in several of the coding systems, problems with HCPCS local codes, differences in implementation of NDC codes in different systems, and differences between the CDT codes in HCPCS and those issued by the ADA. It was repeatedly suggested that these issues be resolved and overlaps be eliminated for standards adopted in the year 2000. After careful consideration of all public input and of the options for modifying HCPCS in the relatively near term, the implementation team is recommending that changes be implemented in HCPCS in the year 2000 to reduce its overlap with other coding systems.

HCPCS contains three levels. Level 1, CPT, is developed and maintained by the AMA and captures physician services. Level 2, alpha-numeric HCPCS, contains codes for products, supplies, and services not included in CPT. Level 3, local codes, includes all the codes developed by insurers and agencies to fulfill local needs.

We are proposing the adoption of HCPCS levels 1 and 2 for implementation in the year 2000. In addition, we are proposing to modify HCPCS level 3 for the year 2000 to eliminate overlaps and duplications.

Most third-party public and private health insurers (such as Medicare contractors, Medicaid program and fiscal agents, and private commercial health insurers) use HCPCS as a basis for paying claims for medical services provided on a fee-for-service basis and for monitoring the quality and utilization of care. In addition, integrated health systems, such as managed care organizations, also use HCPCS as a basis for monitoring utilization and quality of care and for negotiating prospective fees and capitated payments. Research organizations use the HCPCS data collected by health insurers to monitor and evaluate these programs and regional/national patterns of care.

As previously stated, HCPCS alpha-numeric codes capture products, supplies, and services not included in CPT. The “D” codes in the HCPCS system are dental codes created by the ADA and published as CDT. However, in HCPCS, the first digit “0” in CDT is replaced by a “D” to eliminate confusion and overlap with certain CPT codes. The ADA has agreed to replace their first digit “0" with a “D” so that CDT can become the national standard. There would no longer be dental codes within HCPCS. Consequently, CDT codes will no longer be issued within HCPCS as of the year 2000. The ADA will be the sole source of the authoritative version of CDT.

The “J” codes within alpha-numeric HCPCS are for drugs. A separate coding system, the NDC developed by the Food and Drug Administration, is also used to report drug claims in the ANSI X12N 837 -- Health Care Claim: Professional and in pharmacy transactions. The NDC system, which has 11-digit codes, is more precise and more current than the HCPCS "J" codes. NDC identifies drugs prescribed down to the manufacturer, product name and package size. NDC codes are assigned on a continuous basis throughout the year as new drug products are issued; “J” codes are assigned on an annual basis. Many providers are currently forced to maintain both “J” and NDC codes to provide data to different insurers. The majority of the local codes currently created were developed because of the lack of a “J” code for a new drug. Local codes are level 3 of the HCPCS and are assigned by local insurers or agencies where there is no national code. By eliminating “J” codes from alpha-numeric HCPCS codes and utilizing only NDC codes for drugs, greater national uniformity can be achieved, the workload of providers who previously had to utilize two drug coding systems will be reduced, and the need for local codes will diminish substantially.

HHS is, therefore, proposing that NDC codes become the national standard in the year 2000 for all types of transactions requiring drug codes and that “J” codes be deleted from alpha-numeric HCPCS. This would require those handling electronic administrative transactions to process 11-digit NDC codes in the year 2000.

Level 3 of HCPCS is intended to meet local needs and is established on a local basis by health insurers. There is no national registry for these local codes. We propose that, beginning in the year 2000, local codes be eliminated and that a national process be established for reviewing and approving codes that are needed by any public or private health insurer.

The first step in this process would be to ask public and private health insurers to review the local codes they use and to immediately eliminate those that duplicate a national HCPCS code or NDC code already in existence. (See the previous section for a discussion of NDC codes.) They would also be asked to eliminate those local codes for which there are few claims submissions (for example, fewer than 50 per year) and that could reasonably and effectively be reviewed by the health insurer. Health insurers would also be asked to eliminate those local codes which were established for administrative purposes, to facilitate claims payment, rather than to identify and describe medical services, supplies and procedures. (A code for “administration of immunization at public health clinic” is an example of a code that includes administrative information in addition to information about the clinical content of the service.) This purging would result in the elimination of the vast majority of local codes now in use. Any remaining local codes would then have to be submitted by the health insurer to HCFA for review and approval as temporary codes. The HCPCS panel currently meets every two to three months to approve requests for temporary codes. This process will be re-examined to determine if more frequent meetings are required.

The process would be modeled after the one that is currently used to review and approve code requests from Medicare and its contractors. Codes that are approved by HCFA would be established as national temporary codes that would be posted electronically and would be available for use by all health insurers. National temporary codes would be reviewed on an annual basis to make sure they are not duplicative of CPT codes or alpha-numeric codes that are newly established.

This new centralized process for establishing national temporary codes would run parallel to the process for establishing national CPT codes, alpha-numeric HCPCS codes, and NDC codes. It is expected that most of the codes submitted for approval by HCFA in this process would be for new medical technologies and services not yet approved for codes by CPT or the alpha-numeric process or for other medical services/procedures covered by health insurers which have no associated CPT or alpha-numeric codes.

These recommendations are based on the following:

As stated earlier, many participants at public meetings voiced concerns about overlaps in codes that are used and the proliferation of local codes. Local codes that are duplicative of national codes create extra work and confusion for providers who must submit different codes to different health insurers. Local codes also make it more difficult for researchers and programs such as Medicaid and Medicare to evaluate and monitor patterns of care and the utilization and quality of care on a regional or national basis.

The use of local codes established for administrative purposes, to facilitate claims payment rather than to identify medical services, supplies and procedures, is contrary to the intent of the medical coding system, which is intended to describe medical services used to prevent, diagnose, treat or manage diseases, injuries, and impairments. Administrative functions necessary to process and facilitate claims by health insurers can be achieved by using “administrative” codes placed in fields other than those used for medical diagnosis and procedure codes or by attaching a modifier to a medical code. Because the need for new temporary codes is not unique to an individual health insurer, the new codes that are created as a result of this centralized process would be useful not just to the health insurer who submitted the original request for a code but also to many other health insurers across the country. By eliminating duplicative and otherwise unnecessary local codes and adding national temporary codes through the centralized process discussed above, we believe we are being consistent with the intent of HIPAA to simplify the administration of the claims review, payment and monitoring process.

We welcome comments and suggestions on this proposal for eliminating unnecessary local codes and establishing a centralized, national process for establishing national temporary codes. We seek input specifically on the problems and barriers to creating this type of process. We are also specifically looking for examples of the kinds of local codes that are now being used that would have to be replaced with national codes or for alternatives to the above-described process.

iii. Recommended Standards and Implementation Guides

The proposed standard code sets for different types of medical data are outlined below:

(a) Diseases, injuries, impairments, other health related problems, their manifestations, and causes of injury, disease, impairment, or other health-related problems.

The proposed standard code set for these conditions is the International Classification of Diseases, 9th edition, Clinical Modification, (ICD-9-CM), Volumes 1 and 2, as maintained and distributed by the National Center for Health Statistics, Centers for Disease Control and Prevention, U.S. Department of Health and Human Services. The specific data elements for which ICD-9-CM is the required code set are enumerated in the implementation guides for the transactions standards that require its use.

An area of weakness of the ICD-9-CM is that it is not always precise or unambiguous. However, there are no viable alternatives for the year 2000. Many problems cannot be resolved within the current structure, but are being addressed in the development of ICD-10-CM for diagnosis, which is expected to be ready for implementation some time after the year 2000.

The official coding guidelines for this proposed standard code set are in the public domain and available at no cost on the NCHS website at http://www.cdc.gov/nchswww/about/otheract/icd9/icd9hp2.htm. Users without access to the Internet may purchase the official version of ICD-9-CM on CD-ROM from the Government Printing Office (GPO) at 1-202-512-1800 or fax 1-202-512-2250. The CD-ROM contains the ICD-9-CM classification and the coding guidelines. The guidelines are also included in code books and coding manuals published by not-for-profit (for example, the American Hospital Association and the American Health Information Management Association) and other private sector vendors.

(b) Procedures or other actions taken to prevent, diagnose, treat, or manage diseases, injuries and impairments.
(1) Physician Services

The proposed standard code set for these entities is the Current Procedural Terminology (CPT) (level 1 of HCPCS) as maintained and distributed by the AMA. The specific data elements for which CPT (including codes and modifiers) is a required code set are enumerated in the implementation guides for the transaction standards that require its use.

Narrative coding guidelines are presented at the beginning of each of the six sections of print edition of CPT and, in addition, special instructions for specific codes or groups of codes appear throughout CPT. CPT is available from the AMA at a charge as well as from several not-for-profit and other private sector vendors.

An area of weakness of the CPT is that it is not always precise or unambiguous. However, there are no viable alternatives for the year 2000.

(2) Dental Services

The proposed standard code set for these services is the Current Dental Terminology (CDT) as maintained and distributed by the ADA for a charge. The specific data elements for which CDT is a required code set are enumerated in the implementation guides for the transaction standards that require its use.

The official implementation guidelines for this standard appear in CDT as descriptors that explain the appropriate use of the codes. Copies of the ADA Current Procedural Terminology Second Edition (CDT-2) may be obtained by calling 1-800-947-4746. The ADA is in the process of developing CDT-3 for introduction in the year 2000.

(3) Inpatient Hospital Services

The proposed standard code set for these services is the International Classification of Diseases, 9th edition, Clinical Modification, Volume 3, as maintained and distributed by the Health Care Financing Administration, U.S. Department of Health and Human Services. The specific data elements for which ICD-9- CM, Volume 3, is a required code set are enumerated in the implementation guides for the transactions standards that require its use.

As stated earlier, an area of weakness of the ICD-9-CM is that it is not always precise or unambiguous. However, there are no viable alternatives for the year 2000 that are more precise or less ambiguous. Many problems cannot be resolved within the current structure but are being addressed in the development of ICD-10-PCS for procedures, which is expected to be ready for implementation some time after the year 2000.

The official coding guidelines for this standard are in the public domain and available at no cost on the NCHS website at http://www.cdc.gov/nchswww/about/otheract/icd9/icd9hp2.htm. Users without access to the Internet may purchase the official version of ICD-9-CM on CD-ROM from the Government Printing Office at 1-202-512-1800 or fax 1-202-512-2250. The CD-ROM contains the ICD-9-CM classification and the coding guidelines. The guidelines are also included in code books and coding manuals published by not-for-profit (for example, the American Hospital Association and the American Health Information Management Association) and private sector vendors.

(c) Other Health-Related Services

The proposed standard code set for other health-related services is the Health Care Financing Administration Procedure Coding System (alpha-numeric HCPCS) as maintained and distributed by the Health Care Financing Administration, U.S. Department of Health and Human Services. We are proposing to make significant modifications to alpha-numeric HCPCS for the year 2000. These modifications are described in Section II.D.2.a.ii of this proposed rule.

The specific data elements for which alpha-numeric HCPCS (including codes and modifiers) is a required code set are enumerated in the implementation guides for the transaction standards that require its use.

Alpha-numeric HCPCS codes meet all but one of the guiding principles for choosing standards. An area of weakness is that it is not always precise or unambiguous. However, there are no viable alternatives for the year 2000 that are more precise or less ambiguous. Some of the areas of ambiguity in HCPCS (the “J” codes for drugs, local codes, variant CDT codes) have been addressed in the changes recommended for the year 2000.

The 1998 alpha-numeric HCPCS file (excluding the D procedure codes copyrighted by the ADA) is available from the HCFA website at http://www.hcfa.gov/stats/pufiles.htm. Users can also access this page by taking the Stats and Data link to the Browse/Download available PUFs link. The 1998 alpha-numeric HCPCS file is on the HCFA Public Use Files page under the Utilities/Miscellaneous heading.

The HCPCS is in an executable format, which includes 1998 alpha-numeric HCPCS in both Excel© and text, the 1998 Alpha- Numeric Index in both Portable Document Format© (PDF) and text, the 1998 Table of Drugs in both PDF and text, the 1998 HCPCS record layout in WordPerfect© and text, and a read me file in WordPerfect© and text.

(d) Drugs

The proposed standard code set for these entities is the National Drug Codes as maintained and distributed by the Food and Drug Administration, U.S. Department of Health and Human Services, in collaboration with drug manufacturers. The specific data elements for which NDC is a required code set are enumerated in the implementation guides for the transaction standards that require its use.

NDC codes as established by the Food and Drug Administration are made available on the individual drug package inserts and product labeling. The Food and Drug Administration, Center for Drug Evaluation and Research, Office of Management, Division of Database Management, prepares an annual update, with periodic cumulative supplements of the Approved Drug Products with Therapeutic Equivalence Evaluations for prescription drug products, over the counter drug products and discontinued drug products. The supplements are available on diskette, on a quarterly basis, from the National Technical Information Service at 703-487-6430. The files are also available on the Internet’s World Wide Web on the CDER Home Page at http://www.fda.gov/cder. The NDC codes are also published in such drug publications as the Physicians’ Desk Reference under the individual drug product listings and “How supplied.”

(e) Other substances, equipment, supplies, or other items used in health care services.

The proposed standard code set for these entities is the Health Care Financing Administration Procedure Coding System (alpha-numeric HCPCS) as maintained and distributed by the Health Care Financing Administration, U.S. Department of Health and Human Services. We are proposing to make significant modifications to alpha-numeric HPCPS for the year 2000. These modifications are described in Section II.D.2.a.ii of this proposed rule. The specific data elements for which alpha-numeric HCPCS is a required code set are enumerated in the implementation guides for the transactions standards that require its use.

The recommended code sets adhere to the principles for guiding choices for the standards to be adopted under HIPAA as follows:

· Improve the efficiency and effectiveness of the health care system by leading to cost reductions for or improvements in benefits from electronic health care transactions.

Improvements in efficiency and effectiveness over the current status quo will result from: (a) the requirement for all those exchanging electronic transactions to use a single official implementation guide for each recommended code set; and (b) the proposed changes to HCPCS, which will eliminate overlap between NDC and HCPCS, eliminate one of the two current versions of CDT codes, and eliminate the use of local HCPCS codes that are known only to institutions that developed them.

· Meet the needs of the health data standards user community, particularly health care providers, health plans, and health care clearinghouses.

The recommended code sets meet some of the needs of the community. To meet all of the community's needs (e.g., elimination of overlap in procedure coding systems and better coverage of nursing and allied health services) will require changes to the code sets recommended or their replacement by newer systems, once these have been fully tested and revised. Essentially all segments of the health care community testified that there was no practical alternative to the recommended code sets for the year 2000, although they recommended changes after that time.

· Be consistent and uniform with the other HIPAA standards--their data element definitions and codes and their privacy and security requirements--and, secondarily, with other private and public sector health data standards.

All of the recommended code sets are required for selected data elements in more than one of the recommended transaction standards.

· Have low additional development and implementation costs relative to the benefits of using the standard.

The recommended code sets are currently used by many segments of the health care community.

· Be supported by an ANSI-accredited standards developing organization or other private or public organization that will ensure continuity and efficient updating of the standard over time.

All of the recommended code sets are supported by U.S. government agencies or private sector organizations that have demonstrated a commitment to maintaining them over time.

· Have timely development, testing, implementation, and updating procedures to achieve administrative simplification benefits faster.

All of the recommended code sets have existing procedures for updating at least annually. NDC updates continually throughout the year.

· Be technologically independent of the computer platforms and transmission protocols used in electronic health transactions, except when they are explicitly part of the standard.

All of the recommended code sets are technologically independent of computer platforms and transmission protocols.

· Be precise and unambiguous, but as simple as possible.

There are some problems with lack of precision and ambiguity in all the recommended code sets, but there are no viable alternatives for the year 2000. In the case of ICD-9-CM, many problems cannot be resolved within the current structure but are being addressed in the development of ICD-10-CM for diagnosis and ICD-10-PCS for procedures, which are expected to be ready for implementation some time after 2000. Some of the sources of ambiguity in HCPCS (the "J" codes for drugs, local codes, variant CDT codes) have been addressed in the changes recommended for the year 2000. The movement to a single framework for procedure coding, sometime after the year 2000, will address other known problems with the procedure codes.

· Keep data collection and paperwork burdens on users as low as is feasible.

Because the recommended code sets are currently used throughout the health care community, they should not add substantially to data collection or paperwork burdens.

· Incorporate flexibility to adapt more easily to changes in the health care infrastructure (such as new services, organizations, and provider types) and information technology.

Some of the recommended code sets lack a desirable level of flexibility; e.g., they use hierarchical codes and may therefore "run out of room" for additional codes required by advances in medicine and health care. Since they appear to be the only feasible alternatives for the year 2000, steps should be taken to improve their flexibility -- or replace them with more flexible options -- sometime after the year 2000.

iv. Probable Changes to Coding and Classification Standards After 2000

Although the exact timing and precise nature of changes in the code sets designated as standards for medical data are not yet known, it is inevitable that there will be changes to coding and classification standards after the year 2000. As indicated in testimony at the NCVHS hearings previously discussed, changes will be required to address current coding system deficiencies that adversely affect the efficiency and quality of administrative data creation and to meet international treaty obligations. For example, ICD-10-CM for diagnosis is highly likely to replace ICD- 9-CM as the standard for diagnosis data, possibly in 2001. When any of the standard code sets proposed in this rule are replaced by wholly new or substantially revised systems, the new standards may have different code lengths and formats. The current draft of ICD-10-CM for diagnoses contains 6 digit codes; the longest ICD-9- CM codes have 5 digits. In addition to accommodating the initial code sets standards for the year 2000, those that produce and process electronic administrative health transactions should build the system flexibility that will allow them to implement different code formats beyond the year 2000.

As also clearly expressed in the hearings and other input to HHS, any major change in administrative coding systems involves significant initial costs and dislocations, as well as some level of discontinuity in data collected before and after the change. These factors must be weighed against expected improvements in the efficiency of data creation and in the accuracy and utility of the data collected. In the future, more flexible health data systems may assist in reducing the costs of implementing changes in administrative coding and classification standards, especially if administrative codes can be generated automatically from more granular clinical data.

b. Requirements

In § 142.1002, we would state that health plans, health care clearinghouses, and health care providers must use in electronic transactions the diagnosis and procedure code sets as prescribed by HHS. The names of these diagnosis and procedure code sets are published in a notice in the Federal Register. The implementation guides for the transaction standards in part 142, Subparts K through R would specify which of the standard medical data code sets should be used in individual data elements within those transaction standards.

In § 142.1004, we would specify that the code sets in the implementation guide for each transaction standard in part 142, subparts K through R, are the standard for the coded nonmedical data elements present in that transaction standard.

In § 142.1010, The requirements sections of part 142, subparts K through R, would specify that those who transmit electronic transactions covered by the transaction standards must use the appropriate transaction standard, including the code sets that are required by that standard. These sections would further specify that those who receive electronic transactions covered by the transaction standards must be able to receive and process all standard codes, without regard to local policies regarding reimbursement for certain conditions or procedures, coverage policies, or need for certain types of information that are not part of a standard transaction.