With the delay in ICD-10, many insurers now have to slow down a mammoth IT project and, potentially more disruptive, make adjustments to a whole slew of programs and contracts.
While most payers' ICD-10 conversions are generally ahead of organizations in other healthcare sectors, this "very late breaking change in the deadline is like throwing a great big wrench into a very complicated process that's well underway," as Jordan Battani, CSC's managing director for emerging health practices, put it.
On an industry-wide level, as America's Health Insurance Plans sees it, the delay is bound to "cause undue confusion and administrative challenges," leaving payers and providers in "a stalled transition between two different coding systems."
On the ground across the country, it's certainly going to vary, with regional- and state-level insurers perhaps falling somewhere in between on the spectrum of conversion -- between the small physician offices who are just getting started and the large health systems and national insurers who are (or were) on track and ready to go in October.
The 'cascading impact'
Most payers were probably testing compliance, or about to start, said Steve Sisko, an IT project manager who works for a large multi-state insurer. So there's the work, time and money spent on that.
There's also "a cascading impact to other programs, mandates and requirements that depend on diagnoses codes," Sisko said. Between encounter reporting, the edge server, risk adjustment, risk corridors and performance measurement, insurers -- and regulators too -- are going to have a lot of work to do using ICD-9 when ICD-10 was expected to be used for the 2015 plan year and beyond.
And between payers and providers, there are a lot of contracts that were based on ICD-10 going into effect, especially ones using alternative, value-based reimbursement and quality measurements.
"Organizations that were moving aggressively to hit the deadline have been looking for ways to take advantage of the new coding system and embed them in their business practices," said CSC's Battani, a former COO of Health Plan of San Joaquin, a Medicaid HMO, and a former director at Blue Shield of California.
"All of that stuff -- if they had effective dates of October 2014 -- has to be unwound and redone," she said.
The new delay also removes what was, at least more recently, a bit of certainty.
"The language in the bill is that the deadline can be no earlier than October 2015," Battani said. "Does that mean it's October 2015 or is it sometime else? We don't know."
For now, "people should plan that its October 2015, but be ready for some other date."