Plenty of payers, providers already behind schedule on ICD-10

April 1, 2011

Any payer's approach to manage the transitions from ICD-9 to ICD-10 will have a lasting impact as an IT project and a transformative change to business.

Key Points

ANY PAYER'S APPROACH to manage the transition from ICD-9 to ICD-10 will have a lasting impact, whether ICD-10 is viewed within the organization primarily as an IT project or a transformative change to business. Ideally, payers should view it as both.

"I know of a couple of plans that are into remediation right now," Schenk says.

The implementation cost to plans is likely to be higher than the initial estimate of $1.64 billion from the Department of Health and Human Services, the bulk of which is attributed to training. Experts say it is nearly impossible to predict how much it will cost payers to manage other aspects of the conversion such as system implementation and renegotiation of managed care contracts.

Productivity loss will also cost payers, who should be mindful of the change-management aspects of broad transformation. Nearly 10 years after Canada's transition to ICD-10, productivity has not recovered to ICD-9 levels, according to HIMSS ICD-10 task force data.

"As much as individuals and organizations in the industry have tried to raise awareness of ICD-10, we still have organizations come to us and say they're are not getting the attention of senior management," says Patricia A. Zenner, healthcare management consultant with actuarial firm Milliman, Inc.

In fact, a survey of MANAGED HEALTHCARE EXECUTIVE readers published in October 2010 indicated that 33% of payers and 45% of providers had not taken any action on ICD-10 implementation. While it's in the best interest of providers to complete the transition early, just 4% of those surveyed indicated they were nearing completion of the conversion.

Payers will have a secondary concern when the Oct. 1, 2013, conversion deadline nears, because they'll undoubtedly receive claims in ICD-9 and ICD-10 during a prolonged transitionary period. In other words, they'll need to have two systems operating simultaneously to handle both types of transactions. According to the MHE research, about 6% of payers were nearing completion of their conversion last October.

Jim Daley is director of IS Risk & Compliance at Blue Cross Blue Shield of South Carolina and the Workgroup for Electronic Data Interchange (WEDI) strategic national implementation process co-chair. WEDI is an industry collective focused on information exchange and management. Daley agrees that industry leaders are struggling to keep up with so many critical changes, and it's all too easy to put off technology progress.

"Some of the smaller organizations don't have the resources and the time, and there are complicating factors such as the HIPAA version 5010 transactions change," says Daley.

The deadline for HIPAA 5010 is Jan. 1, 2012.

Zenner says health plans typically work in siloed operations-IT, claims, clinical, etc.-and bringing those disciplines together routinely is key to advancing the conversion process. Most organizations have completed assessments and gone on to educational efforts around the basics of ICD-10.

"The individuals who need to understand ICD-10 and the potential implications really haven't had the level of education they need," Zenner says.

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