Regulatory Journey to Destination 10: Understanding the Process for Adoption of ICD-10-CM and ICD-10-PCS

by Kathy Giannangelo, RHIA, CCS

The healthcare industry is preparing for a monumental journey. Its destination? ICD-10-CM and ICD-10-PCS. It's taken almost 10 years to consider the options with regard to upgrading the standard code sets for diagnosis and procedure reporting of hospital inpatient services. Now the healthcare industry is on its way.

AHIMA urges HIM professionals to support the adoption and implementation of ICD-10-CM for use in all healthcare settings and ICD-10-PCS for use in reporting hospital inpatient services. Modernization of code sets is an essential building block in the national health information infrastructure.

The trip won't be without roadblocks or the potential for detours or delays. But with the right road maps, HIM professionals can navigate these obstacles by understanding the regulatory process and, when the opportunity presents itself, providing input that ensures the adoption and implementation of ICD-10.

The Advisory Process

The Health Insurance Portability and Accountability Act (HIPAA) defined the authority for approval and the process by which ICD-10-CM and ICD-10-PCS can become a standard code set used in healthcare transactions.

HIPAA requires the secretary of Health and Human Services (HHS) to approve any code set used in a HIPAA transaction. But before the secretary can make this decision, the National Committee on Vital and Health Statistics (NCVHS) provides advice. The NCVHS serves as the statutory public advisory body to HHS in the area of health data and statistics.

In November 2003, the NCVHS sent a letter to HHS recommending:1

  • adoption of ICD-10-CM and ICD-10-PCS as HIPAA standards for national implementation as replacements for current uses of ICD-9-CM volumes 1, 2, and 3
  • initiation by HHS of the regulatory process for the concurrent adoption of ICD-10-CM and ICD-10-PCS
  • an implementation period of at least two years following issuance of a final rule

With this letter, the journey began.

Take Five Steps: The Regulatory Process

The NCVHS recommendation would seem to have set the stage for a smooth ride, but there is still the potential for delays. HIM professionals must be knowledgeable about the process and prepared with the appropriate response to a roadblock, or the process will not move forward.

There are essentially five steps in the regulatory process:

  1. The secretary accepts the NCVHS recommendation
  2. The federal government publishes a notice of proposed rule making (NPRM) calling for public comments on its policy, plus the published ICD-10-CM and ICD-10-PCS materials incorporated in the Federal Register
  3. The public at large has at least 30, but more likely 60, days to submit comments on the NPRM and its incorporated materials
  4. The federal government analyzes the public comments. Based on this analysis, any necessary changes are made
  5. The federal government publishes a final rule containing its updated policy, an explanation of it, and the implementation date in the Federal Register

It is anticipated that the ICD-10 implementation date will be two years after publication of the final rule.

Step 1: The Secretary's Acceptance

It may seem that not much has happened since last November when the NCVHS letter was sent to the secretary but that is not necessarily the case. A number of procedures must be completed before a NPRM can be published:2

  • Agencies must prepare an inflation impact statement for each "major" rule prior to publication of the NPRM. The director of the Office of Management and Budget (OMB) is empowered to administer the program
  • Agencies must publish semi-annual agendas, describing the legal basis for any "significant" regulations under development
  • A 1981 executive order mandates that for major rules, a regulatory impact analysis must be performed, describing:3
    • The rule's potential benefits and who will derive them
    • The potential costs and who will bear them
    • The net benefit[s]
    • Alternative approaches that could achieve substantially the same goal and an explanation of why such alternatives were not adopted

A "major" rule is defined as one that would result in:

  • an annual effect on the economy of $100 million or more
  • a major increase in costs or prices for consumers, individual industries, federal, state or local government agencies, or geographic regions
  • significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets

In addition, a 1985 executive order mandates that at the beginning of the regulatory process, the head of each agency must determine whether a proposed regulation is consistent with the goals of the administration.

Rule making can be affected by events or external pressures; therefore, the public and legislators have some influence in on how an agency proceeds during this process. (See "AHIMA Speaks Out" for an example of recent industry discussion on this issue.) In the case of ICD-10, it's important for HIM professionals to present a united front. Documents such as AHIMA's position statement on the adoption of ICD-10-CM and ICD-10-PCS and recently developed talking points can be used when preparing a presentation, writing an article, or talking to the media, government agencies, legislators, and healthcare industry leaders about the adoption of ICD-10. These documents and more can be found in the online FORE Library: HIM Body of Knowledge.

Steps 2-5: Rule Making

Responding to an NPRM

The NPRM describes the proposed regulation and allows the public to comment. The aim is to encourage public participation in the process by providing the opportunity for input, to help educate the agency, and to achieve more informed agency decision making. An agency can set forth specific proposals in an NPRM and retain flexibility in drafting the final rule by including several alternatives that are under consideration.

When the ICD-10 NPRM is published, look for:

  • A description of the two medical code set standards, ICD-10-CM and ICD-10-PCS, and their related rules and guidelines or the location where the standards are found. For ICD-10-PCS, the standard should address the sections of ICD-10-PCS that need to be included as required data elements of electronic claims transactions. ICD-10-PCS includes many procedures for which ICD-9-CM procedure codes are not typically reported. To prevent confusion and inconsistent coding and reporting practices, these must be clearly identified. (For example, must imaging, nuclear medicine, or laboratory tests performed in a hospital inpatient setting be reported using ICD-10-PCS codes?)
  • The process for maintenance
  • The process for implementation
  • The implementation dates
  • A description of the data elements and the impact on known HIPAA transaction standards. The secretary is required to consult with the designated standard maintenance organizations (DSMOs) before adopting any standard for electronic healthcare transactions.4 The DSMOs are responsible for maintaining standards for healthcare transactions adopted by the secretary and receiving and processing requests for adopting a new standard or modifying an adopted standard. Once the secretary decides that a new code set should be adopted, the DSMOs oversee the various standards modifications needed to accommodate the new code (for example, a move from five-character numeric to seven-character alpha-numeric code). A DSMO might also be called on during the hearing process to explain how the proposed change would affect different transaction standards. DSMOs also coordinate updating the transaction guides for inclusion of the new standard.

In addition to the above, the NCVHS has suggested that the NPRM invite comments on these questions:

  • What could be done to minimize the costs of a transition to ICD-10?
  • What could be done to maximize the benefits of implementing ICD-10?
  • What are potential unintended consequences of such a migration and how could they be mitigated?
  • What time frames would be adequate for implementation
  • What additional steps would be required to ensure a realistic and smooth migration?

Here are some tips for formulating an appropriate response to an NPRM:

Plan Ahead. HIM professionals need to assess how this change will affect their organization and what the benefits are. Organizations may need time to coordinate a response or to authorize an expenditure of funds to do the research needed to produce informed comments.

It is important to remember that comments must be received by the date stipulated in the NPRM to ensure agency consideration. Those received after the deadline are not read or considered. An agency will allow at least 30 to 60 days to submit comments on an NPRM.

Prepare now to lend your voice in support of adoption and implementation of ICD-10. HIM professionals who have tested either classification are particularly well situated to comment on the questions above. For example, coding professionals who participated in AHIMA and the American Hospital Association's ICD-10-CM field test in 2003 favored migration to ICD-10-CM and thought the system should be implemented in three years or less.5

Be Clear on Issues. Regulatory agencies rely heavily on comments submitted during the rulemaking process. When comments on an issue appear to be contradictory, a regulatory agency must make judgments about the information submitted, often choosing one position over another. Likewise, the agency could attempt to find middle ground. It is much more difficult for regulators to finalize a rule that does not in some way reflect consensus within the regulated industry. In the absence of comments, regulators generally believe that their proposals are acceptable.

When responding to the NPRM, keep in mind AHIMA's views on the following issues. AHIMA recommends:

  • Support of prompt adoption and implementation of ICD-10-CM and ICD-10-PCS medical code set standards in the United States. AHIMA does not believe that a decision to implement ICD-10-CM can be delayed until the current HIPAA rules are completely implemented, nor do we believe the healthcare industry can afford to postpone the reimbursement and other considerations that are impacted with any coding system delay.
  • An open process for the establishment and maintenance of medical codes. This is crucial to the successful use of uniform, consistent coding sets and systems. The current ICD-9-CM coding standard update and maintenance process and guideline development process is a model of how a coding standard process should work under HIPAA. 
  • For each code set there can be only one official set of rules, definitions, and guidelines. No healthcare entity should be permitted to change these rules to accommodate an adjudication process or revenue system. The official source of coding advice should be clearly identified and readily accessible, so all users are easily able to procure official coding advice. Users should be encouraged to seek advice on proper coding from the official source. Such requirements will help to maintain consistency in coding. 
  • All payers and providers should be required to adhere to the existing code set rules, definitions, and guidelines as developed by the code set maintenance organization and published as part of the code set.
  • Coding rules and guidelines should be part of the standard code set so that all users must abide by them and ensure consistent application and reliable data. The integrity of coded data and the ability to turn it into functional information require that all users consistently apply the same official coding rules, conventions, guidelines, and definitions.
  • The coding system rules and guidelines should be updated on the same schedule as the code set.
  • The coding rules and guidelines development process established for ICD-9-CM should continue for ICD-10-CM and ICD-10-PCS.
  • Every accepted standard medical data code set organization must be required to have an organized process for the development and maintenance of the codes and rules and guidelines for the correct, consistent use of their code set. 

It is also important to keep in mind the criteria for designation as a HIPAA standard. These can be used to support the adoption and implementation of ICD-10-CM and ICD-10-PCS as standard code sets. In addition, these criteria also support replacing ICD-9-CM, which substantially fails to meet the criteria.

To be designated as a HIPAA standard, each standard should:

  • Improve the efficiency and effectiveness of the healthcare system by leading to cost reductions for or improvements in benefits from electronic healthcare transactions
  • Meet the needs of the health data standards user community, particularly healthcare providers, health plans, and healthcare clearinghouses
  • Be consistent and uniform with the other HIPAA standards–their data element definitions and codes and privacy and security requirements–and, secondarily, with other private and public sector health data standards
  • Have low additional development and implementation costs relative to the benefits of using the standard
  • 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
  • Have timely development, testing, implementation, and updating procedures to achieve administrative simplification benefits faster
  • Be technologically independent of the computer platforms and transmission protocols used in electronic health transactions, except when they are explicitly part of the standard
  • Be precise and unambiguous, but as simple as possible
  • Keep data collection and paperwork burdens on users as low as is feasible
  • Incorporate flexibility to adapt more easily to changes in the healthcare infrastructure, such as new services, organizations, and provider types, and information technology

Analysis of Public Comments

After the comment period is over, the federal government analyzes the comments and decides what, if anything, needs to be done to the proposed regulation. The agency can request further information, but unsolicited comments are not accepted. Based on this analysis, any necessary changes are made and a final rule is issued. The time between the close of public comments to a NPRM and is issuance of a final rule may be 30 days, several months, or years.

Between the close of the comment period and the publication of a final rule, the agency must prepare a final regulatory impact analysis and submit the analysis and the draft final rule to the OMB for review.

Publication of Final Rule in the Federal Register

After consideration of all of the comments from the public, a final rule is published in the Federal Register. This rule sets forth the agency's final policy, taking into consideration the comments received, and sets an effective date for the regulation and an implementation date. In the final rule, the agency explains why alternative solutions were rejected in of the option(s) suggested. Where the final rule varies from the proposed rule, it must clarify how the final rule is a logical outgrowth of the proposed rule.

Sometimes agencies publish an interim final rule with comment period or final rule with comment period. However, this happens infrequently.

There would likely be at least a two-year implementation window after the effective date of the final rule announcing adoption of ICD-10-CM and ICD-10-PCS. The effective date is usually 60 days after publication in the Federal Register.

A correction notice may be published after the final rule if modifications to an already published rule are necessary.

Arriving at the Destination

When HIPAA regulations were first published in 2000, ICD-9-CM was selected as the initial standard for diagnostic and inpatient procedure coding because ICD-10-CM and ICD-10-PCS were still under development and it would have been premature to name it as a national standard. Since that time, much progress has been made in finalizing the systems.

HIM professionals can do their part in contributing to a smooth journey to ICD-10 without roadblocks, detours, or delays. Begin now by participating in the rule-making process. The following Web sites may help get you started:

What's in a Rule?

AHIMA's Advocacy Assistant defines the term "rule" (in a regulatory context) as an agency statement of general or particular applicability and future effect. The general format of a rule or regulation includes:6
  • agency publishing the rule
  • type of rule
  • effective date (if a final rule)
  • date comments are due (if applicable)
  • a preamble informing the public of the basis and purpose of the rule or proposed rule. It gives the public a general idea of the purpose and justification of the rule.
  • regulatory text (the actual "rules" the agency is promulgating)
  • sections that cite specific portions of HIPAA (or other laws) for reference
  • any published data criteria, standards, and similar material not produced by the agency
  • other text, such as regulatory impact analysis, paperwork burden, and so on. For example, the Office of Management and Budget (OMB) requires an opportunity for the public to comment on proposed collections of information. This is accomplished in the NPRM by including reference to the fact that the rule has been submitted to OMB for review and that comments may be sent to the OMB desk officer for the particular agency. The rules also require that the agency place a notice in the Federal Register, advising the public about the availability of information, such as a brief statement of the need for the collection of information, a description of how the information and record keeping will be conducted and the likely respondents, and an estimate of the total annual reporting and record-keeping burden that will result.

AHIMA Speaks Out

ICD-10 has been an item of discussion among many policy groups, including the President's Information Technology Advisory Committee (PITAC), a federal advisory committee comprised of academic and private-sector IT leaders.

In April 2004, the committee made a draft recommendation to study the "cost benefit" of upgrading the country's diagnosis and procedure code system from ICD-9-CM to ICD-10-CM and ICD-10-PCS, compared to the potential alternative of moving directly to reporting diagnoses and procedures coded for clinical purposes in the Systematized Nomenclature of Medicine, Clinical Terms (SNOMED CT).

AHIMA Executive Vice President and CEO Linda Kloss, RHIA, CAE, responded that SNOMED CT is not an alternative to ICD-10. "Even when SNOMED CT, a reference terminology, is universally implemented, we will still need ICD," she said in a letter to the PITAC Health Care Delivery and IT Subcommittee. "It is the classification system for grouping concepts in the terminology for a number of critical uses such as health and vital statistics trending, health policy and planning, reimbursement, and many administrative uses. So we need both SNOMED and ICD-10."

Kloss reiterated that "The National Committee on Vital and Health Statistics recognized the need to replace ICD-9 over a decade ago." Her letter urged the subcommittee to recommend expedited implementation of ICD-10 as well as research into how to speed implementation of SNOMED CT as well as "the value of mapping (it) to ICD-10."7

At press time, the PITAC was expected to submit final recommendations in June 2004.


  1. Lumpkin, John. Letter to Tommy Thompson on ICD-10, November 5, 2003. Available online at
  2. AHIMA Advocacy Assistant. "Our Policymakers at Work—The Regulatory Process." 
  3. An executive order issued in 1981 increased presidential control over executive branch rule making. It was designed to reduce the burdens of existing and future regulation, increase agency accountability, provide for presidential oversight, minimize duplication and conflict, and ensure well-reasoned regulations. This executive order also gives the OMB rule-making review functions beyond those established in the Paperwork Reduction Act of 1980, which established the OMB Office of Information and Regulatory Affairs to review and approve or disapprove agency information collection requests.
  4. The DSMOs are the Accredited Standards Committee X12, the Dental Content Committee of the American Dental Association, HL7, the National Council for Prescription Drug Programs, the National Uniform Billing Committee, and the National Uniform Claim Committee.
  5. AHIMA and the American Hospital Association. "ICD-10-Field Testing Project. Report on Findings: Perceptions, Ideas and Recommendations from Coding Professionals Across the Nation." September 23, 2003.
  6. AHIMA Advocacy Assistant. "Our Policymakers at Work—The Regulatory Process."
  7. AHIMA. "AHIMA Comments to PITAC's Recommendation Regarding ICD-10 and SNOMED-CT." April 21, 2004. 


AHIMA Advocacy Assistant. Available online to AHIMA members at

AHIMA's Coding Products and Services Team. "Destination 10: Healthcare Organization Preparation for ICD-10-CM and ICD-10-PCS." Journal of AHIMA 75, no. 3 (2004): 56A-D.

AHIMA. "Position Statement: Support of Prompt Adoption of ICD-10-CM and ICD-10-PCS Medical Code Set Standards in the United States." July 2003.

AHIMA. "Testimony to the National Committee on Vital and Health Statistics on ICD-10-CM." May 29, 2002. 

AHIMA. "Testimony to the National Committee on Vital and Health Statistics on ICD-10-PCS." April 9, 2002. 

AHIMA. "Testimony of the AHIMA to the National Committee on Vital and Health Statistics on Medical Code Sets." February 6, 2002. 

President's Information Technology Advisory Committee. Available online at

Prophet, Sue. "ICD-10 on the Horizon." Journal of AHIMA 73, no. 7 (2002): 36-41.

Rode, Dan. "Taking the Next Step Forward for ICD-10." Journal of AHIMA 75, no.1 (2004): 14-15.

Kathy Giannangelo is a coding practice manager at AHIMA. She can be reached at

Source: Giannangelo, Kathy. "The Regulatory Journey to Destination 10" (AHIMA web extra, May 21, 2004)