ICD-10: What now?

July 15, 2014

Where on-again, off-again has landed us

When you were a kid and had to remove a bandage from a sore, your mom or dad probably gave you the wise advice to pull it off quickly, all at once. 

Unfortunately for the healthcare industry, the painful transition to the ICD-10 classification scheme has gone the opposite way, made substantially more painful by repeated delays in the implementation date. 

The Protecting Access to Medicare Act of 2014, signed by President Barack Obama on April 1, barred the U.S. Department of Health and Human Services (HHS) from adopting ICD-10 until at least Oct. 1, 2015, one full year later than the previous deadline. 

For what it’s worth, on May 1, CMS announced an interim final rule that officially set Oct. 1, 2015, as the new date for ICD-10 implementation. 

Experts say what made the postponement even worse is that it was completely unexpected. For example, HHS kept insisting that Oct. 1, 2014, was the absolute latest date and would not be changed, says Joel Shalowitz, MD, MBA, director of the Health Industry Management program at Northwestern University’s Kellogg School of Management. And, of course, it did anyway.

 

Ready or not? 

A logical question is whether the healthcare industry would have been ready had the 2014 implementation date not been changed. Although opinions are mixed, insurers say they are in good shape. 

Clare Krusing, director of communications for America’s Health Insurance Plans (AHIP), says insurers put a tremendous amount of resources into ICD-10 implementation and were on track to be ready by this coming October.

Similarly, all BlueCross BlueShield plans were on track for an October 2013 implementation, says Justine Handelman, vice president of legislative and regulatory policy at the BlueCross BlueShield Association (BCBSA). 

A spokesperson for WellPoint confirms that great progress has been made toward ICD-10 compliance by the plan, and “testing for all internal and external systems is on track for completion prior to Oct. 1, 2015.” 

Others are less sanguine about the industry’s readiness, despite having extra time. 

“Much of the industry would not have been ready on Oct. 1,” says Stanley Nachimson, principal of Nachimson Associates. “We would have had a bit of a mess.”

He says that although most plans said they were ready, “there was not a lot of convincing evidence,” adding that there has not been much testing yet-especially end-to-end testing. 

Deborah Neville, director of revenue cycle, coding and compliance for Elsevier, estimates that about 25% to 30% of organizations would not have been ready to meet an Oct. 2014 implementation date.

“At this point, providers are a lot further along than payers,” she adds, although, overall, larger entities are usually further along and some payers have already started end-to-end testing.  

So if some players still aren’t ready, why not? 

On April 30, the Workgroup for Electronic Data Interchange (WEDI)  held an Emergency ICD-10 Summit that drew about 200 in-person and virtual attendees. The participants outlined several causes for organizations not preparing for an ICD-10 implementation. 

Among these are a surfeit of mandates for providers and payers, including compliance with Meaningful Use and the Physician Quality Reporting System, as well as Affordable Care Act requirements, preparations for health plan ID and operating rules requirements. 

The summit also noted that physicians have not seen a convincing value proposition for ICD-10, and that additional documentation requirements are perceived as taking time away from patient care.

“As a coder, I like ICD-10,” says Betsy Nicoletti, certified coder and coding author and educator. She can see the classification scheme’s value for hospitals and why Medicare wants it, but she agrees that it will be a pain for providers. 

 

A stalled transition 

Given the current situation, there are certainly negatives along with a few potential upsides. 

A central problem, which the WEDI summit highlighted, is that most organizations did not budget for additional ICD-10 funding and resources beyond 2014. Some of the organizations represented at the summit estimated that the one-year delay will cost them an additional, unbudgeted $5 million to $10 million. 

Because ICD-10 also involves numerous other functions- including reporting, auditing, fraud detection and quality metrics-implementation costs for health plans were already higher than originally expected, and well into the millions for large plans, Nachimson says. 

While it’s difficult to gauge any kind of average cost for the transition to ICD-10, Shalowitz points to a 2010 estimate by AHIP, which pegged the total insurance sector cost to be in the range of
$2 billion to $3 billion. 

A related issue is competing priorities for money and staff. 

“The delay also places stress on staffing, as personnel may be diverted to other efforts,” according to WEDI, which further noted that organizations “will need to retest in 2015, further increasing costs.” In some cases, WEDI adds, retraining also may be required. 

“All things considered, [plans] have a lot more to worry about, like pricing for exchange products,” says Shalowitz. 

Medicare was supposed to do end-to-end testing in July, but this has now been postponed until 2015. Many plans have postponed their own testing by six to 12 months, Nachimson says.

 The delay could be a gift for any organization behind schedule, he adds, but only if the extra time is used to their advantage. A legitimate concern that providers have, he says, is whether their practice-management or electronic health record systems are upgraded for ICD-10. 

In an early 2013 survey by Emdeon of top healthcare software vendor executives, only 12% indicated that their technologies could support ICD-10, with 23% indicating they would have it available in the second half of that year. Significantly, perhaps, almost half of the respondents were unwilling to estimate when they would have ICD-10–compliant software available. 

Overall, Krusing says, the delay leaves the health system in a “stalled transition,” creates additional costs and complications, and is basically a negative for health plans. 

The delay will be helpful nonetheless to some entities, especially smaller hospitals and some vendors, says Neville, and organizations that are ready will still get some benefit from having additional time to prepare through training and testing. 

 

What’s next? 

Further training, education and testing are potentially crucial, assuming that the transition does go forward in October 2015. 

The BCBSA worked with its individual plans to develop an ICD-10 tool kit that was released in February, says Handelman. In addition, individual BlueCross BlueShield plans are holding forums with hospitals, physicians and physician groups, as well as billing and coding groups, and the plans are proactively testing end-to-end, she says. 

It might be that BlueCross BlueShield is an outlier, because reviews on support efforts by health plans are decidedly mixed. When asked about plans providing support for providers, Nicoletti replies, “I haven’t seen a lot of it.” 

The most important assistance health plans could provide, Nicoletti says, would be to run a substantial amount of end-to-end testing in 2015.

Although the level of education and support given by plans varies, Nachimson says, some have established online support and/or testing portals. Plans, he says, “have a vested interest in getting their providers ready.” 

One complication, regardless of the transition’s timing, will be the need to operate ICD-9 and ICD-10 side-by-side for a short period of time. 

With the way everything stands now, Nachimson explains, ICD-9 codes have to be used for services provided through Sept. 30, 2015, then only ICD-10 can be used for services provided Oct. 1 and later. 

However, he continues, the limit to file claims can be up to 18 months after the date of service under some plans, and appeals could drive the usage of ICD-9 even longer. 

According to federal mandates, practice management systems must be able to accommodate both ICD-9 and ICD-10 codes till all claims and other transactions for services before the mandated compliance date have been processed and completed. 

Yet another wrinkle is that only HIPAA-covered entities must use ICD-10, notes Nicoletti, which could potentially exclude medical care under workers’ compensation or medical care resulting from motor-vehicle accidents. 

She adds, however, that it would be too difficult internally to run both schemes if, for example, a health insurer were to also handle workers’ compensation insurance. Neville notes that workers’ compensation insurers will likely get claim information in ICD-10 format anyway.

 

Will it have been worth it? 

Looking forward to when the deed has finally been done and the dust has settled, most industry experts are optimistic that the effort will pay off. 

More risk adjustment for insurers is possible under ICD-10 because of “much more granularity,” says Handelman, and ICD-10 will also facilitate payment innovations. 

“Ultimately, we believe ICD-10 will result in enormous benefits,” according to WellPoint. “Overall, we view the ICD-10 upgrade as a necessary process that will positively affect payers, providers and consumers.” 

Hospitals support ICD-10 because it should allow them to be paid more appropriately and ultimately more for more-severe conditions, says Nachimson. 

Still, Handelman asks, “How do you allocate the cost of this versus the benefits?” While acknowledging the theoretical benefits for research and for population health, he also emphasizes that providers have to bear the costs. 

In the end, Neville says, both providers and payers, as well as the public health community, will benefit from better analysis of the additional information ICD-10 will provide.

Scott Baltic is a freelance writer based in Chicago.

ADDITIONAL RESOURCES>>>

 

Implementation resources:

The Workgroup for Electronic Data Interchange has organized the ICD-10 Implementation Success Initiative, whose website includes links to checklists, timelines and implementation guides for practices and small hospitals, as well as information about the role of clearinghouses, how to talk to vendors about ICD-10 and much more. In addition, WEDI’s recent national conference (May 12–15) included several sessions and panels about ICD-10. Those resources can be found here.

Additional ICD-10 coverage:

Minimize the trouble of ICD-10 transition

Fact file: Industry scorecard on the ICD-10 delay 

What about ICD-11