Updated on: March 17, 2016

ICD-10 Interim Final Rule Arrives at the OMB

Original story posted on: June 16, 2014

Battered and bruised yet intact, like a dazed boxer entering a late round against an unrelenting challenger, the interim final rule for implementing ICD-10 by October 2015 limped into the federal Office of Management and Budget (OMB) last Friday.


Arrival at the OMB marks the last stop on a long and arduous path before the rule is published in the Federal Register. But there is no guarantee that 2015 will remain the official compliance date.

Like many a boxer before, ICD-10 has been down this unforgiving road before, yet always coming back – but in the end it keeps losing round after round, having been outmatched by an opponent with greater resources and outmaneuvered by cunning political savvy.

“Generally, OMB has 90 days to review the rule and can, if they wish, make changes,” Stanley Nachimson, founder of Nachimson Advisors, reminded us. (Nachimson, a former Centers for Medicare & Medicaid Services official, has been there, done that before).

The most recent delay — the fourth so far — came as a surprise sucker-punch in the form of the Protecting Access to Medicare Act of 2014. While ICD-10 advocates were attempting to rally lawmakers against the Cutting Costly Codes Act, S. 972, sponsored by Sen. Tom Coburn (R-Okla.) and the House version introduced by Rep. Ted Poe (R-Texas), on March 27, the House passed legislation addressing a projected 24-percent cut to physician Medicare reimbursement driven by the Sustainable Growth Rate (SGR). This legislation easily passed in the Senate on March 31 and was signed into law by President Obama the next day.

Assuming that the interim final rule emerges from the OMB unscathed, there remain potential roadblocks to its implementation. Moreover, the healthcare landscape has changed since last fall, when the Centers for Medicare & Medicaid Services (CMS) published the final rule for ICD-10’s implementation by October 2014.

In a June 4, 2014 letter to outgoing Health and Human Services Secretary Kathleen Sebelius, Workshop for Electronic Data Interchange (WEDI) Chairman Jim Daley expressed concern that “(if the) implementation actions continue, as is with the new compliance date, the industry could experience ongoing challenges leading to protracted implementation and unnecessary burden and cost.”

Daley also expressed concern over the impact of the delay that will require providers to continue to use ICD-9 codes for at least another year. “This impacts applications, business processes and training, and (the) availability of professional coders,” he wrote.

The latest ICD-10 delay also brings into the question a credibility issue that continues to loom over CMS. This is the fourth delay of the new code set, and it follows several other missteps by CMS – including the 2012 delay of the enforcement of 5010 HIPAA electronic transaction standards and code sets from the 4010 version.

The compliance date for ICD-10 and other HIPAA mandates have often been extended,” Daley wrote. “After repeated affirmation by CMS officials that this time the compliance date was final, the date was changed by Congressional action.”

And in his letter Daley also included a cautionary note about the SGR. The aforementioned issue affecting Medicare reimbursement to physicians has yet to be addressed by any lasting reform, and another temporary solution or “fix” is likely to be introduced next year.

“Since the Sustainable Growth Rate (SGR) is likely to require legislative action next year, there is concern that the ICD-10 compliance date will be extended yet again as part of that action,” Daley warned Sebelius. “All of this has eroded industry confidence that any new date will be adhered to.”

Unlike during the aftermath of previous delays, this time around it was found that the larger healthcare systems were well on their way to being ICD-10-compliant by October 2015. In fact, many were in the process of end-to-end testing.

In a survey of 5,000 AAPC members, nearly three-quarters of the survey respondents were making significant progress toward implementing ICD-10, according to Rhonda Buckholtz, vice president of ICD-10 training and education for the association. Buckholtz presented survey results during her recent testimony before the National Committee on Vital and Health Statistics (NCVHS).

“One-quarter of those surveyed had completed all ICD-10 training, 13 percent indicated that they were ready to go, and 23 percent were actively testing with vendors when the bill was signed,” Buckholtz reported in an article written for ICD10monitor. “Only slightly less than a third were still in the beginning phases of preparation.”

On the other hand, Daley remains concerned that in light of the delay, some organizations will stop or slow down implementation initiatives.

This can lead to a self-fulfilling outcome where, by delaying their work, they will not make sufficient progress to meet a new compliance date, impacting overall industry readiness and potentially leading to requests for further delay,” he wrote.

And then there’s the recurring issue of money and budgets — two subjects that Daley raised in his letter. He recognized the cold hard fact that a number of facilities didn’t budget for additional funding beyond 2014. His concern is that ICD-10 personnel now may be diverted to tackle other initiatives.

“Another side effect is the impact to contracts with consulting or staffing firms,” Daley wrote. “In some cases these contracts might be terminated or slowed down, but in others there may be delivery or payment guarantees involved.”

Daley suggested that a crossroads of sorts is facing those facilities that would have been compliant by October 2014. For them, he notes, they’ll need to choose one of two paths to take — neither of which seems appealing.

“(They) will need to decide whether to implement ICD-10 changes and leave them inactive or place a hold on implementation,” Daley wrote. “In some cases some changes might need to be backed out, such as date edits that trigger which code set to use. The extension of project timelines and potential maintenance of inactive application code increases compliance costs.”

Beyond identifying issues confronting healthcare providers during the latest delay, he provided Sebelius with a detailed list of recommendations that were created during the WEDI ICD-10 Summit convened April 30 of this year.

Those recommendations, along with a host of other healthcare issues, are likely to add to the woes of incoming Health and Human Services Secretary Sylvia Mathews Burwell, whose confirmation was passed by the Senate on June 5.

“We would hope that OMB approves the rule quickly and with the expected Oct. 1, 2015 compliance, but there is no guarantee of that,” Nachimson said.


Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Chuck Buck

Chuck Buck is the publisher of ICD10monitor and is the executive producer and program host of Talk Ten Tuesdays.

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