The ICD-9 code set was adopted in the United States in 1979 as the standard for documenting morbidity and mortality information for statistical purposes. It was expanded and adopted in 2000 under HIPAA as the standard code set for use in all electronic transactions by covered entities. Specifically, ICD-9 codes are currently used in all U.S. health care settings to document diagnoses and are also used in all U.S. inpatient hospital settings to document procedures. ICD codes are used in a variety of ways by Medicare. For example, Medicare uses the codes to help determine hospital inpatient payment rates based on the Medicare-Severity Diagnosis-Related Groups system, which classifies inpatient stays according to both patients’ diagnoses and the procedures a patient receives. Further, CMS uses the diagnosis codes to determine whether the care provided by physicians is medically necessary and, therefore, eligible for reimbursement. The transition to ICD-10 is intended to increase the number of codes and, thus, improve providers’ ability to designate the level of specificity when documenting diagnoses and procedures. Specifically, ICD-9 codes are made up of three to five alphanumeric values, while ICD-10 codes are made up of three to seven values, allowing for more codes and increased specificity. While there are approximately 15,000 ICD-9 diagnosis codes, there are approximately 70,000 ICD-10 diagnosis codes. Likewise, there are approximately 4,000 ICD-9 procedure codes, while there are approximately 72,000 ICD-10 procedure codes. The additional codes were defined by the Centers for Disease Control and Prevention and CMS to enable providers and payers to capture greater specificity and clinical information in medical claims. For example, using ICD-10 codes, a provider will be able to identify a body part and the side of the body subject to an evaluation or procedure; however, the ICD-9 codes do not allow this level of differentiation between the left and right sides of the body. As another example, there is only one ICD-9 code that a provider would enter on a claim for angioplasty (a procedure to restore blood flow through an artery), but there are 854 ICD-10 codes for angioplasty, with these codes including additional details on the affected body parts and the approaches and devices used for the procedure. (Within these 854 codes there will be higher-level generic codes available for entry if a lower level of detail is not needed. Therefore, a provider may not need to know or use all the 854 codes for angioplasty.) Another difference between the ninth and tenth versions of the codes is the terminology and disease classifications, which are to be updated so that they are consistent with new technology and current clinical practice. For example, under ICD-9, when filing Medicare claims, providers use a single code to reflect tobacco use or dependence, while, under ICD-10, they will be able to use a code that indicates a category for nicotine dependence with subcategories to identify the specific tobacco product and nicotine-induced disorder. In this example, the updated disease classifications for nicotine disorders reflect the increased knowledge of the effects of nicotine. Other differences between the code sets include the addition of new concepts that do not exist in ICD-9 diagnosis codes, such as the expansion of postoperative codes to distinguish between intraoperative and post-procedural complications, and the designation of trimester for pregnancy codes. HHS issued a final rule on January 16, 2009, that mandated the use of ICD-10 codes by all HIPAA-covered entities by October 1, 2013; hence, the transition from version 9 to version 10 of the codes was initially to take effect approximately 2 years ago. However, on September 5, 2012, the department issued a final rule that delayed the effective date until October 1, 2014. The Secretary of HHS made this decision because, among other reasons, results of industry surveys and polls had indicated that HIPAA- covered entities throughout the country were not prepared to successfully complete the transition. Subsequently, the Protecting Access to Medicare Act of 2014, enacted April 1, 2014, mandated an additional delay by prohibiting HHS from requiring the use of ICD-10 codes sooner than October 1, 2015. On August 4, 2014, the department issued a final rule that established October 1, 2015, as the new compliance date. Accordingly, on October 1, 2015, all health care transactions that include ICD codes must begin using the tenth version of the codes for services that occur on or after that date. (Transactions with dates of service that occur prior to the transition date of October 1, 2015, must continue to be documented with ICD-9 codes.). Figure 1 illustrates the sequence of events leading to the current compliance date. Medicare fee-for-service claims that include ICD codes are submitted, processed, and authorized for payment through a combination of stakeholders’ systems and CMS’s internal claims processing systems. For example, health care providers use systems within their practices to complete and submit claims for payment of services covered under the Medicare fee-for-service program, and the Medicare Administrative Contractors (MAC), who administer the processing of the claims, use their own and CMS’s internal systems to complete processing of the claims for approval and authorization of payment. Additionally, other health care insurers receive claims data from CMS that may include ICD codes when payments of health care benefits are shared between these insurers and Medicare. These insurers’ systems must be able to accept and process the data sent by CMS, including the ICD codes. Therefore, all these types of systems would need to be modified by Medicare stakeholders in order to function properly in an electronic claims processing environment when the transition from ICD-9 to ICD-10 is made. Stakeholders in CMS’s electronic Medicare claims processing environment include providers, health care clearinghouses, and private health care insurers, all of which use their own systems to exchange claims data that include ICD codes with CMS’s internal systems. For example, health care providers use systems within their practices to complete claims for payment of services delivered to their patients, including beneficiaries of the Medicare fee-for-service program. Once the data for a patient visit have been entered into a provider’s system, the claim is electronically submitted for processing and payment authorization, either directly from the provider’s systems or through a health care clearinghouse—an organization that converts nonstandard data elements of health information into standard data elements so that they can be transmitted to and used within other claims processing systems. The claims data are transmitted from the provider’s (or clearinghouse’s) system to a MAC—one of the contractors whose services CMS uses to administer the claims processing requirements of the program. Each MAC uses one of two standard software modules to accept electronic claims for processing. These systems, referred to as “front-end” systems, are used to first determine whether the data submitted are valid. There are two front-end validation systems—one for the Part A/B institutional, physician and non-physician practitioner claims, and one for durable medical equipment, prosthetics, and orthotics claims. When validating ICD codes, the front-end systems are designed to check to ensure that the codes and related data are properly entered on the claim. Specifically, in order to be accepted by the MACs’ systems, the claim must include a diagnosis indicator that specifies whether the ICD-9 or ICD-10 code set is being used, one or more dates of service, and ICD codes. These ICD-related data must be consistent in order to pass through the front-end systems and on to the MACs’ systems. For example, a claim with an ICD-10 diagnosis indicator; a September 30, 2014, date of service; and an ICD-10 code entered into a data field that is 7 values in length should be rejected by the front-end data validation routines because the date of service (September 30, 2014) is earlier than the ICD- 10 compliance date (October 1, 2015). Instead, the claims data would require an ICD-9 indicator and code. Therefore, it would not be transmitted from the front-end validation system for further processing by the MAC; rather, it would be rejected and sent back to the submitting provider (via the MAC’s system) for correction. Thus, these front-end data validation systems would require modifications in order to accept and process the expanded 7-value ICD-10 code field in addition to the 5-value ICD-9 code field. The systems would also need to be modified to ensure that they can determine that the version of the codes used is consistent with the date service was delivered—for version 9, a date of service prior to October 1, 2015, and for version 10, a date of service on or after October 1, 2015. After claims pass the front-end validation routines, each MAC uses its own systems to receive electronic Medicare claims data that would include ICD codes from providers (or clearinghouses). For example, the MACs use systems such as claims imaging software, interactive voice response systems, provider portals, and workflow management systems to accept providers’ data. A MAC then uses its systems to transmit the claims data to CMS’s systems that are used to determine whether to approve and authorize payment of the claims. Each of the systems used by a MAC to accept, process, and transmit claims data would require modifications in order to process ICD-10 rather than ICD-9 codes. While private insurers do not submit health care claims data to CMS, they nonetheless also use systems that would need to be changed to process ICD-10 codes that are included with other claims data sent to them by CMS. Specifically, in cases when a beneficiary is covered by both Medicare and another payer, such as a supplemental Medigap insurer or a primary payer other than Medicare, the other payer (insurer) could receive claims data, including ICD codes, from CMS if it was responsible for paying all or a portion of a claim.