Survey says delay would make ICD-10 implementation more expensive

It's tempting to think that delaying the ICD-10 implementation deadline can't be all bad. What's wrong with giving healthcare providers some more time to implement a costly and complicated change?

Some healthcare professionals say it's going to significantly increase the cost of ICD-10 transition projects. That's the thinking of representatives from healthcare payers and providers who attended the 2012 ICD-10 Summit, an industry conference hosted by Edifecs on Feb. 15-17 in Florida.  (Note the timing of the summit.) Edifecs conducted a survey of attendees on how any delay in the ICD-10 timeline would affect their organizations. They weren't happy:

• "64% of respondents state a delay will not improve readiness"
• "60% believe even a one-year delay will have a negative impact"
• "69% say a two-year delay would be either potentially catastrophic or unrecoverable"
• "76% believe a delay will harm other healthcare reform efforts"

[Download survey results:  Industry Reaction to Potential Delay of ICD-10]

What gives? What could possibly be so catastrophic? Kristine Weinberger, a senior healthcare business consultant at Edifecs, explained to me that the people involved with the ICD-10 transition projects are worried that significant delays would prompt organizations to shift resources away from the projects and slow down implementation efforts. Then restarting the ICD-10 implementation would be more expensive than originally budgeted. Basically survey respondents said the longer the delay, the more expensive it will be for them to implement ICD-10 coding.

To understand that, it's useful to understand who took the survey of more than 50 professionals actively involved in their organizations' ICD-10 transitions. Weinberger said she doesn't have a breakdown of who answered what because the questions were answered anonymously. But the representatives who took the survey were from:

• Healthcare payers: 25 percent
• Blue Cross-Blue Shield plans: 25 percent
• Healthcare providers: 18 percent
• Government entities such as state Medicaids: 9 percent
• Clearinghouses: 6 percent
• Other healthcare organizations: 17 percent

So at least 59 percent of respondents were from healthcare organizations who reimburse medical claims. Which is really important to keep in mind the answers to this question:

Given there will be a postponement of ICD-10 compliance for certain covered entities, what is the best option?

• 13.5 percent say keep the same date
• 59.5 percent say move the date out for all entities
• 5.4 percent say stagger dates based upon type of entity
• 2.7 percent say stagger dates based upon code set
• 18.9 percent say keep the same date but allow a grace period

There is strong opposition to any option that allows more than one deadline for ICD-10 implementation. Note the survey was taken mostly by healthcare payers. And if the Centers for Medicare and Medicaid Services (CMS) staggers the deadlines for healthcare providers, that means the healthcare payers would have to accept ICD-9 and ICD-10 codesets. Weinberger told me that is not part of their ICD-10 implementation plans. Adding dual coding capabilities would require added expense and time.

By the way, here's a snapshot of the respondents readiness:

• 49 percent are in the development phase
• 36 percent are in the planning phase
• 10 percent are implementing
• 5 percent are testing

This helps explain why dual coding is not a welcome idea to organizations that have not planned for it. And it helps explain why they don't believe any delay will improve readiness or affordability. No one responded that they haven't even started ICD-10 planning. It is very unlikely that small hospitals and medical practices worried about not having enough resources (time and money) to implement another federal mandate (HIPAA 5010, Meaningful Use and ICD-10) would send someone to a summit to talk about ICD-10 implementation.

But that is the audience that acting CMS admistrator Marilyn Tavenner and Health and Human Services (HHS) Secretary Kathleen Sebelius addressed when announcing their intent to delay ICD-10 implementation. "We have heard from many in the provider community who have concerns about the administrative burdens they face in the years ahead," said Sebelius. No one expressed empathy for health plans or insurers.

And healthcare providers may not be sympathetic to the challenge of implementing dual coding systems (Why non-covered entities will want to vigorously implement ICD-10 coding). But if that happens, healthcare payers should be able to pass the costs down the healthcare premium payers. The CMS issued a final rule last year that allowed payers to classify ICD-10 conversion costs as clinical care.