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11/21/2011
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Is ICD-10 More Important Than Meaningful Use?

Advisory Board health IT boss Dave Garets tells CIOs to make ICD-10 compliance their top priority because more money is at stake.

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Hospitals are spending millions installing and upgrading electronic health record (EHR) systems in pursuit of federal bonuses for Meaningful Use of EHRs. But they may want to rethink their IT priorities, a longtime industry watcher said.

According to Dave Garets, executive director of the health IT group of Washington, D.C.-based research firm the Advisory Board Co., ICD-10 coding is far more significant than Meaningful Use in terms of healthcare reform. If he were a hospital CIO, he would put money into complying with ICD-10 by the Oct. 1, 2013, deadline before going for Meaningful Use because more money is at stake with the former.

"I think [ICD-10] will cause a financial crisis in many healthcare organizations," Garets said last week at an Advisory Board health IT meeting in Chicago, a gathering of about 75 hospital CIOs, IT security officers, and vendor representatives. Garets added that he believes there will be a short-term revenue slowdown for the majority of providers, a position backed up by a recent KLAS Enterprises survey.

In giving his "state of the health IT union," Garets mocked the American Medical Association (AMA) for its call for a delay to the ICD-10 timeline.

[ Which healthcare organizations came out ahead in the IW500 competition? See 10 Healthcare IT Innovators: InformationWeek 500. ]

"Somebody needs to speak up and make fun of the AMA," Garets said. "We're the last developed country on the planet to do it [convert to ICD-10]." Garets asked the audience if anyone thought that AMA resolution to "work vigorously to stop" ICD-10 implementation would prompt the Centers for Medicare and Medicaid Services (CMS) to push back the deadline. Nobody said yes.

One CIO in the audience commented that ICD-10 and EHR strategies should not be mutually exclusive. Garets agreed to a degree, but noted that a lot of providers have been ignoring the ability of ICD-10 to help with healthcare quality improvement because the codeset allows for significantly more detail than the current ICD-9 system. "I don't think people have paid attention to what ICD-10 could do until recently," Garets said.

Though he said Meaningful Use should be less of a priority than ICD-10, Garets was impressed with EHR progress so far. He said the HITECH section of the American Recovery and Reinvestment Act was intended to get providers to Level 4 on the HIMSS Analytics scale, and more than 25% now have, according to HIMSS Analytics. "I think the Meaningful Use stuff is actually working," Garets said.

However, the former director of HIMSS Analytics added that hospitals still will have plenty of work to do as the requirements for Meaningful Use escalate. He said that Stage 1 Meaningful Use more or less corresponds to Level 4 on the HIMSS Analytics EMR Adoption Model, or EMRAM, while the Stage 2 requirements should be close to Level 6. Garets expects the third and final MU stage to require the functionality needed for Level 7, the top of the EMRAM scale.

Currently, just 5.5% of nonfederal hospitals nationwide are at Level 6 and a mere 59 hospitals are at Level 7. However, there is not necessarily a direct correlation between Meaningful Use and EMRAM. "Just because you're at Stage 6 doesn't mean you're a meaningful user," Garets noted.

The Advisory Board health IT leader also urged CIOs to pay attention to data breaches. Breaches are now a "quadruple whammy," according to Garets.

Advisory Board estimates that it costs about $1,000 per patient to deal with a lawsuit over a breach. It costs $20,663 on average to solve a single case of identity theft. The U.S. Department of Health and Human Services (HHS) now can impose penalties of as much as $1.5 million annually per entity for violating Health Insurance Portability and Accountability Act (HIPAA) privacy rules. Plus, Garets said, a breach could lead to loss of Meaningful Use bonus payments.

"We're starting to believe that it's not a matter of if, it's a matter of when you will have a breach," Garets said. "I think this is a real big deal."

The new InformationWeek Healthcare supplement on EHR Best Practices explains how the most astute healthcare providers are putting those billions of dollars in federal stimulus funds to productive use. Download the supplement now. (Free registration required.)

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