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, CHIP and Survey & Certification 
 
CMCS Informational Bulletin 
  
DATE:  July 20, 2011 
 
FROM:  Cindy Mann 
  Director 
  Center for Medicaid, CHIP and Survey and & Certification (CMCS) 
 
SUBJECT:  Updates on Medicaid/CHIP  
 
This Informational Bulletin is to update States and other interested parties on two important items: 
  A reminder about program integrity related to Medicaid eligibility workers; and 
  Information on ICD-10 Implementation.  
 
Medicaid Eligibility Workers and Program Integrity 
 
CMCS and our partners at the Center for Program Integrity would like to remind States about the 
important role played by Medicaid eligibility workers in both assisting individuals and families 
who need and qualify for coverage and in ensuring that State and Federal Medicaid dollars are 
protected against abusers, scam artists, and criminals.  Every dollar lost to fraud or abuse is a 
dollar that could have been used to provide high quality care to eligible beneficiaries and to fairly 
compensate the providers delivering that care.  Both the Federal and State governments take 
many measures to protect taxpayers from such losses, including ensuring that systems are in 
place to accurately assess eligibility, strengthen provider enrollment procedures, engage auditors 
to review claims and applications, conduct post payment analysis of claims and encounters, and 
measure errors through our Payment Error Measurement Program. 
 
These program integrity tools--many of which rely on data and technology--are key to ensuring 
that all eligible individuals, and only eligible individuals, receive coverage.  It is also critical that 
all communications that occur between applicants and eligibility workers are consistent with 
State and Federal policies.  It is of utmost importance that information conveyed by such workers 
to the public is accurate and delivered with the highest degree of honesty and integrity.  
Accordingly, we recommend that State Medicaid programs periodically remind employees about 
their ethical and legal obligations with respect to Medicaid applications and related 
communications.   We also note that in any case in which a Federal or State employee facilitates 
or perpetrates crimes against the program, Federal and State civil and criminal penalties may be 
applicable.   
 
We know that States have spent significant time and resources in ensuring that eligibility 
workers have appropriate ongoing training, and that the vast majority of such workers act with 
professionalism and integrity.  We encourage States to continue that important investment and  
 
 
   
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also to take advantage of the free training available through the Medicaid Integrity Institute. 
Information about the Institute can be found at http://www.justice.gov/usao/eousa/ole/mii/   
 
 
5010/ICD-10 Implementation 
 
The Center for Medicare & Medicaid Services (CMS) wants to remind State Medicaid Agencies 
of upcoming deadlines for 5010 conversion and ICD-10 implementation and the availability of 
Federal resources to assist States. On January 16, 2009, the Department of Health and Human 
Services published the final regulation on ICD-10.  [74 FR 3328]  This rule requires all covered 
entities as defined by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) 
to adopt ICD-10 codes for use in all HIPAA transactions related to services provided on or after 
the October 1, 2013 compliance date.  The compliance deadline is October 1, 2013.   
 
Prior to processing ICD-10 claims, States must first implement the Version 5010 electronic 
health care transaction standards required by HIPAA, as the existing HIPAA Version 
4010/4010A1 transaction standards do not support the use of the ICD-10 codes. States must 
install Version 5010 in their systems and test with all vendors and trading partners by January 1, 
2012.  Coordination is necessary between the Version 5010 and ICD-10 implementations to 
identify impacted transactions and systems to support Version 5010 and ICD-10.  If States are 
not prepared to accept 5010 claims by the compliance date, they may experience a large increase 
in provider customer service inquiries affecting their operations.  In addition, it will cause 
financial hardships for providers since it will increase the likelihood of delayed payments.  For 
more information on Version 5010, go to the CMS website at https://www.cms.gov/ICD10 and 
click on the Version 5010 link on the left side of the page 
 
The move from ICD-9 to ICD-10 is a significant change for the States and, unlike previous 
HIPAA efforts, ICD-10 impacts the providers and processes of Medicaid as much as the 
technology systems.  ICD-10 implementation is much more than a code set update as diagnosis 
and inpatient procedure codes are a large part of the foundation of policy and processes in 
Medicaid operations.  Implementing ICD-10 requires States to redefine their policies to align 
with the new code set.  For example, States will need to update how they determine both 
coverage and payment for products and services.  Since ICD codes are used in almost every 
clinical and administrative process and system, implementation will impact nearly every aspect 
of a States Medicaid operations. 
 
CMCS understands the magnitude of work involved in implementing ICD-10 and is offering a 
variety of technical assistance resources.  For example, CMCS developed the ICD-10 
Implementation Assistance Navigation Tool to help States understand and implement ICD-10.  
The ICD-10 Implementation Assistance Navigation Tool is located at 
https://medicaidicd10.noblis.org/.   There are two types of assistance material on this site: 1) the 
Medicaid ICD-10 Implementation Assistance Handbook and 2) the training modules presented at 
the Regional Office ICD-10 Training Workshops.   
 
 
 
   
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The Medicaid ICD-10 Implementation Assistance Handbook contains information on the 
following core topics:  
 
  Limitations of the current ICD-9-CM code set and benefits of implementing ICD-10;  
  Strategies and activities to implement ICD-10 during the five implementation phases; 
and, 
  ICD-10 milestones, key activities, inputs, and outputs.  
States should already be underway with their ICD-10 implementation.  As of the end of          
June 2011, each State should have completed the assessment phase, which includes planning 
activities, performing an impact analysis, developing a remediation strategy, and establishing 
both internal and federal funding levels.  States should be starting the remediation phase, which 
includes developing requirements; implementing policy, process, and system updates; and 
executing system testing.  A high-level ICD-10 implementation timeline and a more detailed 
timeline can be found in the ICD-10 Implementation Assistance Navigation Tool.  
We hope these resources and tools will assist you with your ICD-10 implementation.  In 
addition, CMCS has compiled a list of resources for ICD-10, which can be found on the ICD-10 
Implementation Assistance Navigation Tool and we will be performing site visits to many States 
during the next three months to assist States on a one-on-one basis.  
 
States with additional questions or comments about ICD-10 or the technical assistance provided 
by CMCS may email MedicaidICD-10@noblis.org.   
 
I hope you find this information helpful.