April 17, 2012

Potential Alternative to the Proposed I-10 Delay?

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On April 9, the Centers for Medicare & Medicaid Services (CMS) announced its proposed switch of the ICD-10 implementation date from Oct. 1, 2013 to Oct. 1, 2014. This delay was premised on three listed considerations: the challenges experienced in the transition to Version 5010, concerns about impact on provider resources and surveys indicating lack of readiness for I-10.

Version 5010 (V5010) implementation raised a number of unexpected issues, resulting in two compliance-date delays of 90 days each. The industry-wide experience of difficulty clearly resulted in anxiety over the prospects of similar delays with ICD-10 compliance (especially being as CMS acknowledged that delays in V5010 could impact timelines for ICD-10). CMS also addressed the regulatory burden imposed on providers by electronic health record (EHR) meaningful use, PQRI, eRX, and other initiatives. The final major factor contributing to the delay was the existence of various survey results indicating that many entities would be unprepared for the Oct. 1, 2013, implementation date – despite the fact that the original compliance date was announced on Jan. 16, 2009.

In changing the compliance date, CMS acknowledged the significant financial impact on those entities that had prepared for 2013. CMS estimates that additional expenses of as much as 30 percent of original ICD-10 budgets could be necessary due to a variety of factors. While many justifications for the delay have been cited, there is open acknowledgement that “in fact, giving small providers more time to prepare is the main justification for the one-year delay.”

CMS has addressed – and, seemingly, dismissed – many concerns regarding delayed implementation. For example, those individuals currently in training as ICD-10 coders now will need additional training, at an estimated additional cost of $6,000 per person. More broadly, this is tied to an accepted truism that “if you don’t use it, you lose it.” Consider the education that hospitals and other entities already have provided to their physicians, coders and other staff. Hospital contracts with ICD-10 vendors also will need to be extended, contributing to the 30 percent cost hike.

The proposal to delay ICD-10 implementation is fundamentally costly, and the cost falls squarely on those entities that currently are most compliant with the previously published rule. In other words, the best prepared will suffer the greatest economic damage. CMS offers somewhat unsubstantiated potential offsets, suggesting that prepared organizations might benefit from the delay through “robust and extensive testing” they could perform during the extended wait for implementation. Despite identifying cost increases of as much as 30 percent, CMS nonetheless insisted that “we believe that a one-year delay would benefit all covered entities.”

Protecting small providers and responding to the demands of the AMA seem to be the principal factors behind the proposed delay. Is there a potential alternative? Health plans and hospitals, which are more prepared for ICD-10, will need to retain dual ICD-9 and ICD-10 systems for an indefinite period of time while many physicians who have not yet prepared at all will need to get moving.

Perhaps CMS could divide the burden more equitably. The implementation date for ICD-10 could remain at Oct. 1, 2013, for example, with a flexible compliance date extending through Oct. 1, 2014 for small providers. This approach would not penalize those who have, in good faith, prepared to comply with the supposed final rule, and it additionally would not result in a sudden cash-flow challenge to small practices. Physicians, who could transition during that one-year window, would gain benefits via early ICD-10 preparation, taking advantage of the available extended testing time described by CMS. Furthermore, if one accepts the fact that ICD-10 provides better data for measuring quality, physicians would be incentivized to transition to ICD-01 as soon as feasible.

Simply delaying for a year likely will result in many physicians being as unprepared for 2014 as they are for 2013.

About the Author

Paul Weygandt MD, JD, MPH, MBA, CPE, is a Certified Physician Executive (CPE) with more than 20 combined years of experience in medical management, legal counsel and orthopedic surgery. He has served as a hospital VPMA, improving documentation across all DRG payers. Dr. Weygandt is vice president of physician services for J.A. Thomas & Associates and is a partner in the firm.

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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.
Paul Weygandt, MD, JD, MPH, MBA, CPE