Hospital CIOs Weigh ICD-10 Options; Fitch Says Delay Good for Credit

April 7, 2014 in News

Many hospitals that have already begun switching from ICD-9 to ICD-10 code sets are considering how best to move forward after President Obama last week signed legislation delaying the ICD-10 compliance date, Modern Healthcare reports (Carlson et al., Modern Healthcare, 4/5).

Background on ICD-10

U.S. health care organizations are working to transition from ICD-9 to ICD-10 code sets to accommodate codes for new diseases and procedures. The switch means that health care providers and insurers will have to change out about 14,000 codes for about 69,000 codes.

In August 2012, HHS released a final rule that officially delayed the ICD-10 compliance date from Oct. 1, 2013, to Oct. 1, 2014, partially to look at the incremental changes needed in reforming health care.

Delay of ICD-10 Compliance Deadline

Last week, Obama signed into law “doc fix” legislation (HR 4302) to delay scheduled cuts to Medicare physician reimbursement rates.

The law, introduced by Rep. Joseph Pitts (R-Pa.), includes a provision that pushes back the ICD-10 compliance date until at least October 2015.

The measure states, “The Secretary of Health and Human Service may not, prior to Oct. 1, 2015, adopt ICD-10 code sets as the standard for code sets.” It also cites sections in the Social Security Act and the Code of Federal Regulations that contain the secretary’s authority to mandate the new code sets.

CMS estimates that a one-year delay of ICD-10 could cost between $1 billion and $6.6 billion, according to a blog post by the American Health Information Management Association, which opposes the delay (iHealthBeat, 4/1).

CMS has remained silent on the new compliance deadline. On Friday, CMS spokesperson Rachel Maisler said, “We are examining the legislation and will provide guidance to providers and other stakeholders soon.”

Hospitals Weigh Options

In the meantime, hospitals are looking for paths forward. According to Modern Healthcare, hospital systems that have already started the transition must now decide if they should delay efforts or continue making the change.

John Halamka, CIO for Beth Israel Deaconess Medical Center in Boston, said he plans to advise other CIOs in Massachusetts “to move forward with ICD-10 testing and go ahead with as much ICD-10 as possible,” including dual-coding. He said, “Doing nothing but waiting on ICD-10 is not an option … I can’t imagine wrapping it in a bow and putting it on a shelf and then losing our investments.”

Lynne Thomas Gordon, CEO of the AHIMA, urged stakeholders to “use [the delay] to your advantage” by “[strengthening] your clinical documentation programs.” She said, “Even if you slow down, don’t stop” (Modern Healthcare, 4/5).

However, Fitch Ratings recently said that a longer transition time is a positive development for hospitals, even though many hospitals were on track for the Oct. 1 deadline (Modern Healthcare, 4/5).  

“While a majority of providers have made the substantial investment in technology and personnel to be ready for the transition, the readiness of both governmental and commercial payers to adequately process claims and payments in a timely manner has been questioned,” according to the agency.

Fitch concluded, “In our view, lower rated credits would be more susceptible to this risk as have less financial resources to absorb a potential delay in reimbursement” (Fitch Ratings release, 4/4).

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