ICD-10 Deadline Brings on IT Headaches

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No sooner did CMS call for an October 1, 2011, compliance date for the switch from ICD-9 to ICD-10 codes than a hue and cry arose from the health care industry, claiming that the change comes too soon.

Not only does ICD-10 contain 10 times the number of codes in ICD-9, but the implementation of the new codes coincides with a HIPAA mandate to implement the next generation of electronic transactions (ANSI X12 version 5010), which many organizations believe needs to be implemented and fully vetted prior to the transition to the new code set.

No one disagrees that the greater specificity of the ICD-10—long implemented by most industrialized nations—can bring about improvements in clinical documentation, administrative transactions, and quality-improvement programs. This conversion, however, represents one of the greatest IT challenges that the US health care system has ever seen, affecting every health care provider in the nation.

In a communication issued last month, the Medical Group Management Association (MGMA) urged CMS to wait until the 5010 transaction standards are fully implemented and tested before implementing ICD-10. “We agree strongly with the recommendation from the government’s own advisory body, the National Committee on Vital and Health Statistics (NCVHS), that implementation of the 5010 transactions standards is a prerequisite to ICD-10. The two should not be implemented simultaneously,” according to William F. Jessee, MD, FACMPE, MGMA president and CEO. MGMA contends that CMS should wait at least three years after the conversion to 5010 before moving the health care industry to ICD-10.

Recent research by the MGMA, conducted among its physician-practice membership, reveals that 95% of respondents in medical practices would have to purchase software upgrades for their practice-management systems or buy all new software, 64% would have to purchase code-selection software, and 84% did not think public and private health plans would be ready to accept claims with ICD-10 codes by October 2011.

Costly, As Well

The cost of transitioning to ICD-10 is expected greatly to exceed earlier estimates for the administrative-simplification requirements of HIPAA, according to an article in Modern Healthcare. In its proposed rule , HHS allocated considerable space to an impact analysis of the proposed conversion. HHS reports that costs will fall into the following three categories: training, productivity losses, and system changes.

A 2003 study funded by the Blue Cross Blue Shield Association pegged the implementation cost for the conversion to ICD-10 at between $5.5 billion and $13.5 billion, with additional productivity losses of $752 million to nearly $1.4 billion for hospitals and physician practices. The study did not include the impact on nursing homes, clinical laboratories, durable medical equipment suppliers, claims clearinghouses, small and midsize payors, or third-party administrators, according to the article.

A second study by the Rand Corp, Santa Monica, Calif, was commissioned by NCVHS in 2004. It estimated a considerably lower implementation cost of between $475 million and $1.53 billion. Unlike the Blue Cross study, the Rand study estimated benefits, which it placed in the neighborhood of $700 million to $7.7 billion.

Society will accrue considerable benefits from the conversion, beginning one year after implementation and continuing through 2023, adding up to $3.95 billion, according to the analysis from HHS. Societal benefits will largely fall into the following categories: more accurate claims, fewer rejected claims, fewer improper claims, better understanding of new procedures, improved disease management, better understanding of health conditions and outcomes, and harmonization of disease monitoring and reporting worldwide.