DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid and CHIP Services 
 
CMCS Informational Bulletin 
 
  
DATE:  April 16, 2012 
 
FROM:  Cindy Mann, Director 
  Center for Medicaid and CHIP Services (CMCS) 
 
SUBJECT:  Delay of ICD-10 and Reminder of Section 1915(c) Waiver Instructions  
 
This Informational Bulletin provides information on two topics: 
  The delay in ICD-10 implementation, and 
  A reminder of the instructions for section 1915(c) home and community-based services 
waivers regarding actions that result in reductions.   
 
Delay of ICD-10 
 
CMS announced a proposed regulation on April 9 on HIPAA Administrative Simplification.  
The rule proposes a HIPAA standard health plan identifier and delays required compliance by 
one year from Oct. 1, 2013, to Oct. 1, 2014 for new codes used to classify diseases and health 
problems. These codes, known as the International Classification of Diseases, 10th Edition 
diagnosis and procedure codes, or ICD-10, will include new procedures and diagnoses and 
improve the quality of information available for quality improvement and payment purposes.  
 
Many provider groups have expressed serious concerns about their ability to meet the Oct. 1, 
2013, compliance date. The proposed change in the compliance date for ICD-10 would give 
providers and other covered entities more time to prepare and fully test their systems to ensure a 
smooth and coordinated transition to these new code sets. 
 
This proposed rule is the third in a series of administrative simplification rules in the new health 
care law. HHS released the first in July of 2011 and the second in January of 2012, and plans to 
announce more in the coming months. More information on the proposed rule is available on fact 
sheets at http://www.cms.gov/apps/media/fact_sheets.asp.  Comments are due 30 days after 
publication in the Federal Register. 
 
Reminder on 1915 (c) Waiver Instructions and Technical Guide regarding 
waiver actions that result in any type of reduction 
 
Due to the difficult budgetary situations States are facing, there has been a significant increase in 
waiver actions, specifically amendments, which seek to reduce services, rates or numbers of 
waiver participants served.  We have recently encountered several situations where  CMCS Informational Bulletin, Page 2 
amendment requests to reduce services, rates or numbers of participants in waivers were 
submitted with retroactive effective dates.  Any type of change to a waiver that may result in a 
reduction needs to be approved by CMS prospectively.    States are, however, permitted to 
submit amendments to retroactively increase the unduplicated number of participants back to the 
beginning of the waiver year at any time during that waiver year cycle.  
 
This guidance does not constitute new policy, but rather highlights guidance from relevant 
sections of the current Waiver Technical Guide Version 3.5 that was issued in January of 2008. 
Prospective approvals are always required for new waivers and are also required for renewals 
that make any reductions to the previously approved waiver.  In other words, if a state submits an 
amendment or renewal to an approved waiver that makes reductions, the reductions are effective 
for the remainder of the approved period, but cannot be applied retroactively to the waivers or 
renewals approval date. 
 
It is imperative that States submit any action that may result in a reduction with sufficient time to 
allow for review and prospective approval from CMS.  Although CMS will make every effort to 
work with the State as quickly as possible, such actions must be submitted a minimum of 90 days 
prior to the anticipated date by which the State would like to implement the change.  When a 
formal Request for Additional Information (RAI) is issued concerning a waiver action, the clock 
is stopped and only restarted (with a full 90-day clock) once the state responds to the RAI.  
Therefore, in some instances, the review period necessary may be as long as 180 days prior to 
implementation if the action requires a second 90-day clock. 
 
Given the critical nature and timing of such waiver actions related to State budgetary plans, we 
strongly recommend that States consult with CMS prior to the submission. Informal consultation 
prior to the formal submission may expedite CMS review of the formal submission.   
 
When an amendment would have the effect of reducing the number of waiver participants, the 
State should also review CMS guidance in Olmstead Letter #4 (located in Attachment C to the 
instructions of the Waiver Technical Guide and available at the following link: 
http://www.cms.gov/smdl/downloads/smd011001a.pdf) 
  
Additional information and a link to the Waiver Technical Guide is available at 
http://www.hcbswaivers.net.  Specifically, pages 30-31 of the Waiver Technical Guide, provide 
more detail about the procedures for submission and review of waiver amendments of various 
types.  If you have any additional questions about this guidance, please contact Mr. Ralph Lollar, 
Director, Division of Long Term Services and Supports at 410-786-0777 or 
Ralph.Lollar@cms.hhs.gov.