CMS Finalizes One-Year Delay On ICD-10

New certainty about deadline will boost hospitals' efforts to implement the new medical coding system, medical industry experts predict.
8 Accountable Care Organizations Worth Closer Examination
8 Accountable Care Organizations Worth Closer Examination
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The Centers for Medicare and Medicaid Services (CMS) has finalized a rule that delays the deadline for compliance with the ICD-10 diagnostic code set from Oct. 1, 2013 to Oct. 1, 2014.

While the industry has anticipated the delay since April, when CMS proposed the postponement, officials of the American Hospital Association (AHA) recently noted that the one-year reprieve was not certain until it was officially finalized. In the meantime, the Association told InformationWeek Healthcare in late July that the attention of hospitals was starting to wander from ICD-10 to other IT priorities.

Two executives of The Advisory Board Co., a leading consulting firm, said in an interview that the finalization of the postponement should help spur new efforts among hospitals to meet the deadline. Edward Hock, senior director of revenue cycle solutions for the firm, said, "The clarification of the delay, as well as approaching that two-year mark [before the deadline], will lead to a pretty significant increase in activity across the country."

Ken Kleinberg, managing director, research and insights, for The Advisory Board, agreed. Both execs said that most organizations have continued implementing some of their plans for the ICD-10 transition.

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Initial reaction from hospital CIOs was positive. Rich Correll, president and CEO of the College of Health Information Management Executives (CHIME), said in a statement, "CHIME is pleased that CMS understood the importance of finalizing its proposed one-year delay for compliance to ICD-10. In public comments filed last April, CHIME urged CMS to keep its proposed one-year delay because a longer delay would seriously disrupt ongoing efforts to convert to ICD-10. And as HHS [Department of Health and Human Services] itself recognizes, a longer delay would significantly increase the costs of converting to ICD-10."

Most hospitals agree that the one-year delay is sufficient, Hock noted. "Most organizations were happy to receive a little bit of a reprieve, but they don't want to put this off any longer than necessary."

Conversely, he said, the uncertainty about the deadline "has been paralyzing for groups that had hired staff or planned major expenditures and had to prioritize other initiatives. The clarity, above all, should be helpful across the industry."

Kleinberg pointed out that this applies not only to providers, but also to payers and software vendors that must prepare for ICD-10. In a recent survey by HealthEdge, 61% of health plans said they would "definitely" be ready by the Oct. 1, 2014 deadline, and 30% said they'd "likely" be prepared by that date.

To indicate some of the challenges payers face, 39% of respondents in the HealthEdge poll said their claims processing systems were more than 15 years old, and 41% said they weren't planning to augment or replace their systems in the next two years. Nevertheless, George Arges, senior director of AHA's health data management group, expressed confidence that most payers would be ready on time.

Physician practices may find it more difficult than hospitals to meet the deadline. Both the American Medical Association (AMA) and the Medical Group Management Association (MGMA) have asked for a longer timeframe, warning that many physicians may not be prepared by 2014.

ICD-10 and other health IT challenges, including electronic health records, have apparently prompted some physicians to seek the shelter of hospital employment.

"The smaller the practice, the more difficult it is for them to keep up with the incentive programs and all the regulations and reporting requirements," Kleinberg noted. "Many of them have found that being part of a health system provides benefits."

In the same rule that covered the ICD-10 delay, CMS also announced its final regulation on a unique health plan identifier. In an accompanying press release, HHS said that this identifier would improve verification of insurance eligibility and avoid the misrouting of claims. Kleinberg said that it would also aid providers in identifying patients correctly.

InformationWeek Healthcare brought together eight top IT execs to discuss BYOD, Meaningful Use, accountable care, and other contentious issues. Also in the new, all-digital CIO Roundtable issue: Why use IT systems to help cut medical costs if physicians ignore the cost of the care they provide? (Free with registration.)