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ICD-10 Conversion: Do Or Die

Failure to meet upcoming deadlines could mean major disruptions in claims payments for healthcare organizations.

That's not to suggest that larger healthcare groups aren't feeling the pain. "Most large provider and payer organizations have an ICD-10 project budget of $50 million to $100 million, which is interesting because the ICD-10 final rule estimated the cost as 0.03% of revenue," said John Halamka, CIO at Beth Israel Deaconess Medical Center in Boston. "For BIDMC, that would be about $450,000. Our project budget estimates are about 10 times that," he said in a recent blog posting.

"Most small to medium healthcare organizations are desperate. They are consumed with meaningful use, 5010, e-prescribing, healthcare reform, and compliance," he said. "They have no bandwidth or resources to execute a massive ICD-10 project over the next two years," Halamka wrote.

Adding insult to injury, during the crossover to ICD-10 organizations need to support dual coding of both ICD-9 and ICD-10, which can also require more attention and resources. For instance, while a provider may be ready to send ICD-10 compliant claims, some payers may not be ready to process them.

As for costs for doctor practices and other clinical providers transitioning to ICD-10, that varies depending upon the size of a healthcare organization, said Mahan. The costs include implementation, training staff, operations, and coding.

A 2008 study conducted for the Medical Group Management Association indicated that it would cost a typical 10-doctor practice about $285,000 to convert to ICD-10. The software cost associated with the transition would be only $15,000, according to the study. The big costs would come from increases in claims queries, reductions in cash flow, and, most of all, increased documentation time.

Meanwhile, it's important for healthcare organizations to remember that the key milestone that organizations must accomplish prior to ICD-10 is the IT infrastructure upgrade needed to support the extended codes--specifically the need to upgrade electronic data transaction standards to comply with HIPAA 5010. The 5010 standards provide the capability for the larger ICD-10 code sets to be electronically sent. "5010 is the first critical juncture," Mahan said.

Is The Timetable Reasonable?

Healthcare organizations have gotten a bit more time for achieving the 5010 transition. The 5010 mandate's deadline was recently extended from Jan. 1, 2012 to late March 2012. Once that March deadline comes and goes, CMS will require that all electronic claims use the Version 5010 standards. Version 4010 claims will no longer be accepted for payment.

In the meantime, some groups, including the American Medical Association, have been pushing the federal government to delay the ICD-10 deadline. But while procrastination might help some organizations, delaying ICD-10 now could cause more hassles for others.

"Large healthcare organizations have already been working hard on ICD-10, so they have sunk costs and a fixed run rate for their project management office," said Halamka. "At this point, any extension of the deadline would cost them more."

In any case, even procrastinators should take heart. "It's never too late to start," Mahan said. Nonetheless, "if you don't make the ICD-10 compliance deadline come October 2013, it won't be good."

Marianne Kolbasuk McGee is a senior writer for InformationWeek.

Healthcare providers must collect all sorts of performance data to meet emerging standards. The new Pay For Performance issue of InformationWeek Healthcare delves into the huge task ahead. Also in this issue: Why personal health records have flopped. (Free registration required.)

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User Rank: Apprentice
9/24/2012 | 6:48:35 PM
re: ICD-10 Conversion: Do Or Die
Very interesting article. Just want to throw my two cents in there as a solution to help expedite the conversion from ICD-9 to ICD-10. Theres a software called FoxtrotONE by EnableSoft. It's already being used by some providers for the conversion. Foxtrot allows you to setup a script that will run about 100x what a human can do if not more, in some cases I've seen up to 2000x faster, it really depends on the system. Whats nice about it is there is no coding, it has a simple to use drag and drop script builder. It is also 100% accurate.
User Rank: Apprentice
4/17/2012 | 4:38:39 PM
re: ICD-10 Conversion: Do Or Die
Good article
User Rank: Apprentice
2/8/2012 | 8:23:06 PM
re: ICD-10 Conversion: Do Or Die
I don't see any reason that extending the ICD10 deadline should impact anyone in a negative way. If providers and payers are ready to go on time then great. Those that are not, can come online when they are ready. Yes it may create some duopoly of effort for awhile. But, imagine the logjam that will occur when the switch is flipped for everyone at the same time. The ANSI 5010 conversion is the canary in the coalmine.
User Rank: Apprentice
2/8/2012 | 8:20:32 PM
re: ICD-10 Conversion: Do Or Die
Once again, old fellow, we seem to agree. My clinics are VERY concerned about the ICD10 deadline. So far, ANSI 5010 has been a disaster. Testing pretty much went smoothly but production has fallen apart with massive rejection of claims due to the smallest of errors or inconsistencies. The problem is so pervasive across the US that MGMA recently sent a letter to HHS asking them to step up and do something about fixing the problems.

We have clinics laying off personnel, trying to get bridge credit extensions, etc. just to cover the cash flow shortfall. Between 5010 and ICD10, I predict significant clinic BK's and closures will be occuring over the next couple of years. This will be the Proverbial straw that breaks the camel's back.
User Rank: Strategist
2/7/2012 | 3:10:03 PM
re: ICD-10 Conversion: Do Or Die
Good article, but I think you've understated the difficulties that are coming. The 5010 conversion for our 300 person company has been anything but smooth, and from an IT perspective it mostly involved vendor provided upgrades to a few (admittedly major) systems. ICD-10 will involve similar upgrades to the systems, but probably 50 times the coordination with outside firms and literally about a thousand times more 'wetware' upgrades in the form of training; I expect it will also cause huge numbers of delayed or unpaid claims. The costs and effort will be staggering, and the benefits will take years to cover those costs, if ever.

I had planned to be out of the IT business before Y2K, and I swear I *will* be gone by the Unix End of Time in 2038, but this will be on the same order of magnitude for health care businesses. That pottery studio in Taos is looking awfully good...
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