As we anticipate the adoption of ICD-10-CM, there is a bit of uncertainty regarding non-covered entities as cited in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). One of the largest groups of these non-covered entities is the workers’ compensation insurers.

Although they are not a covered entity under HIPAA, workers’ compensation insurers and state agencies are aware of ICD-10-CM and the impact it will have on claims processing and covering the workforce.

Workers’ compensation is governed by state laws, and every state’s laws have similarities and differences. All states cover the medical costs associated with work-related injuries, and most have a state-mandated fee schedule. The patient, in all states, is not balance-billed for charges in excess of those outlined in the state fee schedule, and the patient is entitled to financial benefits for lost work if circumstances fall within recognized parameters. Permeating every set of state guidelines are the reporting requirements associated with bill submission.

Workers’ compensation is further subject to state guidelines regarding who may underwrite insurance. Some states require all employers to use a state-managed insurer, and others allow local and national carriers. Many states also regulate the premium rates. Employers with employees in multiple states usually will insure through a national carrier, where possible. Some insurers only underwrite workers’ compensation, while others provide coverage for multiple lines, including standard health insurance.

For non-covered entities, workers’ compensation is an area where there are more unknown requirements than known facts regarding ICD-10-CM. This is compounded by the variance in state guidelines and the sheer variety of insurers.

The Centers for Medicare & Medicaid Services (CMS) has stated that it is “in non-covered entities’ best interest to use the new coding system.” CMS has cited reasons including:

  • Increased detail in code information;
  • The fact that ICD-9-CM no longer will be maintained; and
  • The notion that mapping is not synonymous with coding.

The International Association of Industrial Accidents Boards and Commissions (IAIABC) is a professional organization that works with state agencies and insurers, and this organization also is encouraging states and insurers to adopt ICD-10-CM. Some of the reasons it cites include those named by CMS, as well as:

  • Research, including outcomes studies;
  • The monitoring of resources for similar diagnoses;
  • Setting of policy;
  • Improvements in financial and administrative performance;
  • Detection and prevention of fraud and abuse; and
  • Tracking risk to employees.

A limited number of states have workers’ compensation guidelines regarding electronic health records (EHR) and electronic submission of health claims. As most providers use a single clearinghouse for claims submission, those insurers who accept electronic claims in most cases are using the 5010 format and will be able to work under the ICD-10-CM code format. However, there are many small insurers, third-party administrators or self-insured employers that cannot accept electronic claims.

For providers, the prospect of maintaining two coding and billing systems may be cost-prohibitive. State agencies are aware of the very real possibility that many providers will chose to not treat workers’ compensation patients if they must maintain a second system. As providers and coders become more proficient at coding under ICD-10-CM, they will become less likely to maintain the same level of knowledge of the ICD-9-CM coding system when processing a limited number of claims.



The state agencies and insurers are not ignoring ICD-10-CM. A handful of insurers have announced plans to adopt ICD-10-CM and already have moved to accept electronic claims using the 5010 electronic format and EHR attachments. One state insurer, the Ohio Bureau of Workers’ Compensation (OBWC), actually has announced its intention to adopt the ICD-10-CM code set. OBWC is a monopolistic insurer, the single largest insurer for Ohio employers. A commercial insurer that has announced plans to adopt ICD-10-CM as well is Anthem Workers’ Compensation, and more are expected to follow.

Another obstacle to the adoption of ICD-10-CM is the state statutes. Many states have language in their laws and statutes that will require changing as providers migrate from ICD-9-CM to ICD-10-CM. For many of these states, legislative action will be required to make these changes.

With encouragement from CMS and the IAIABC, it is anticipated that more insurers and state agencies will be taking steps to adopt the ICD-10-CM coding system during the next two years.

About the Author

Nannette Orme is the clinical technical editor for OptumInsight. Ms. Orme has more than 20 years of experience in the healthcare

profession. She has extensive CPT/HCPCS, ICD-9-CM and ICD-10-CM coding. Her prior experience includes workers’ compensation payers, physician clinics, and healthcare consulting. Her areas of expertise include workers’ compensation, physician audits and education, compliance and HIPAA legislation.

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