Practice Economics

Delay in ICD-10 Implementation to Impact Hospitalists, Physicians, Payers


 

On April 1, President Obama signed into law a bill that again delays a permanent fix of the sustainable growth rate formula, or SGR, the so-called “doc fix.” The bill also contained a surprise provision added by Congress to delay implementation of the switch from ICD-9 to ICD-10. The mandated conversion was supposed to take place by October 1 of this year; its delay will have a range of impacts on everyone from physicians to payers.

Hospitalists and others must weigh their options going forward, as many health systems and groups are already well on their way toward compliance with the 2014 deadline.

At this point, prevailing wisdom is that Congress added the delay as an appeasement to physician groups that would be unhappy about its failure to pass an SGR replacement, says Jeffrey Smith, senior director of federal affairs for CHIME, the College of Healthcare Information Management Executives.

“Even if it’s not going to require ICD-10 codes [by October 2014], hopefully they are still doing testing, still doing benchmarking, and by the time the deadline rolls around, it will touch every sector of the healthcare economy.”–Jeffrey Smith, senior director of federal affairs for CHIME, the College of Healthcare Information Management Executives

“The appeasement, if in fact that was the motivation, was too little too late,” Smith says, adding Congress “caused a lot of unnecessary chaos.”

For instance, according to Modern Healthcare, executives at Catholic Health Initiatives had already invested millions of dollars updating software programs to handle the coding switch ahead of a new electronic health record system roll-out in 89 of its hospitals, which would not have been ready by the ICD-10 deadline.

“Anyone in the process has to circle the wagons again and reconsider their timelines,” Smith says. “The legislation has punished people trying to do the right thing.”

The transition to ICD-10 is a massive update to the 30-year-old ICD-9 codes, which no longer adequately reflect medical diagnoses, procedures, technology, and knowledge. There are five times more diagnosis codes and 21 times more procedural codes in ICD-10. It’s been on the table for at least a decade, and this was not the first delay.

In 2012, when fewer groups were on their way to compliance, CMS estimated that a one-year push-back of ICD-10 conversion could cost up to $306 million. With the latest delay, the American Health Information Management Association says CMS now estimates those costs between $1 billion and $6.6 billion.

However, according to the American Medical Association, which has actively lobbied to stop ICD-10 altogether, the costs of implementing ICD-10 range from $57,000 for small physician practices to as high as $8 million for large practices.

How ICD-9 and ICD-10 codes differ

The increased number of codes, the increased number of characters per code, and the increased specificity require significant planning, training, software updates, and financial investments.

The Medical Group Management Association (MGMA) also pushed for ICD-10 delay, concerned that many groups would not be ready by Oct. 1. MGMA surveys showed as much, says Robert Tennant, senior policy advisor for MGMA.“We were concerned that if everyone has to flip the switch at the same time, there will be huge problems, as there were for healthcare.gov,” Tennant explains.

What MGMA would like to see is more thorough end-to-end testing and staggered roll-outs. Hospitals and health plans should be permitted to start using ICD-10 coding when they're ready, even if ahead of the next deadline, Tennant said. MGMA would also like to see a period of dual coding built in.

The ball is now in CMS' court.

“I think that CMS has within its power … the ability to embolden the industry to be more confident,” Smith says. “Even if it’s not going to require ICD-10 codes [by October 2014], hopefully they are still doing testing, still doing benchmarking, and by the time the deadline rolls around, it will touch every sector of the healthcare economy.”

Hospitalists, Smith says, should be more involved in the conversation going forward, to help maintain the momentum and preserve the investments made by their groups and institutions. Those not ready should push for compliance, rather than finding themselves in the same position a year from now.

Many of the hospital CIOs (chief information officers) he has talked to say that while they are stopping the car, they are keeping the engine running. Some will push for dual coding, even if only internally, because it’s proving to be a valuable tool in understanding their patient populations.

“It’s a frustrating time any time you have to kind of stop something with so much momentum, with hundreds of millions, if not billions, spent in advance of the conversion,” Smith says. “It does nothing to help care in this country to stay on ICD-9. Everybody understands those codes are completely exhausted, and the data we are getting out of it, while workable, is certainly not going to get us where we need to be in terms of transforming healthcare.”


Kelly April Tyrrell is a freelance writer in Madison, Wis.

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