April 8, 2014

The ICD-10 Delay – Why Did It Happen and What Do We Do Now?

By Stanley Nachimson

In 2009, the U.S. Department of Health and Human Services (HHS) published the first ICD-10 final rule requiring the adoption of the new code sets for services rendered on and after Oct. 1, 2013. This was after representatives of the industry requested that this date be moved back from the initial proposed date of Oct. 1, 2011, with those representatives claiming that the additional time was necessary to effectively and properly implement the changes. There were estimates of considerable costs and considerable benefits to the industry for the process, with many of the costs falling on providers and many of the benefits accruing to public health entities and health plans. Many hailed the regulation, but there was grumbling in several quarters.

Yet despite recommended timelines and guidance provided to the industry by WEDI, AHIMA, HIMSS, and others, industry participants fell behind on the intermediate benchmarks for the project. Providers, plans, and vendors all focused their attention on other priorities, the Centers for Medicare & Medicaid Services (CMS) provided an “enforcement moratorium” for the conversion to the new 5010 transaction versions (effectively instituting a delay), and in late 2011 and 2012 several organizations started pressuring CMS to grant the industry extra time for ICD-10 implementation. CMS relented, publishing a proposed rule and a final rule in 2012 granting an additional one year for implementation – the new deadline being Oct. 1, 2014. This was a bit of a compromise between those who wanted no delay and those who wanted an even longer delay (or an abandonment of the change altogether).

Yet instead of taking advantage of the additional time to get on track and make progress, many in the industry simply “took a year off,” postponing implementation work for months on end. Continued industry surveys from WEDI and others showed that the industry still lagged behind the timelines, even accounting for the extra year. Vendors were slow to deliver solutions, providers were slow to perform impact assessments, and plans were slow to publish new policies. Despite industry recognition of the need for robust end-to-end testing lasting at least a year, many plans were unable to create test plans. Even Medicare at first declined to conduct end-to-end testing. Again, under industry pressure, Medicare ultimately announced some limited “acknowledgement testing” and then grudgingly created an end-to-end testing program set to begin in late July – barely two months before implementation.

Meanwhile, the press was having a field day. Opponents of ICD-10 got people laughing at “absurd” codes like “being burnt by flaming water skis” or “injured by rocket debris.” Benefits of the change were never really fully explained or quantified, and provider and health plan costs soared beyond initial estimates. Rumblings of “contingency plans,” dual coding, and a rocky implementation began to multiply. And the concerns of ICD-10 opponents were never addressed.

So we did a poor job of education, preparation, and implementation. It was only in 2013 and 2014 that CMS published extensive education material for providers and formed a “success initiative” with WEDI. The industry was heading towards a disaster. The signs were not good. Providers were wringing their hands.

In an amazing political move, a sentence recently was inserted into a must-pass bill in Congress – the SGR patch – that delayed ICD-10 for at least another year. It had nothing to do with the SGR. It was little-noticed and seldom mentioned. Too late, the ICD-10 proponents mobilized. The bill passed. And ICD-10 was again delayed!

Now, this may seem like a normal reaction to impending chaos, or a saving grace for the industry. But it was not seen that way by everyone. The industry panicked, CMS was confused, and organizations claimed that they wasted their investments. Despite the lack of progress, concerns about not being ready, or the true lack of justification, the industry said: woe is us.

Frankly, how a rational person could have not expected a delay is beyond me. The industry was clearly not ready, was not adequately preparing to be ready, had not adequately projected what the impacts would be, and, in some ways, was preparing ways of getting around meeting the mandate. Virtually every signal within the industry’s control was flashing red. Instead of panicking, we should be giving thanks that we have this extra time.

The real question is this: What do we do now? If we repeat the behavior of the last four years, we of course will get the same result – rushing towards a deadline we are unlikely to meet, pitting organization against organization, and inviting further delays if not outright rejection of ICD-10. We have to change the ways we plan, execute, test, and implement these major changes for plans, providers, clearinghouses, and vendors. We have to stop looking to CMS to tell us what to do and then basically not following or complaining about the instructions. We have to stop relying on CMS for every piece of education.

But we also need to figure out how to allocate costs and benefits more equitably among industry participants. And we need to include all segments of the industry in our solutions. This is not a compromise, but a consensus; not a mandate, but an agreement. And clear intermediate steps and measurements are necessary to ensure that the industry is making progress towards the final goal.

There are options in this. We could decide to have only hospitals implement ICD-10, or at least to have them go first. Physicians could follow at some later time. We could set up true pilots (much as HIMSS and WEDI did in order to show the coding issues) so some rational decisions could be made on impacts, issues, and solutions. We could figure out different ways to allocate costs, perhaps providing incentives to providers to adopt ICD-10.

CMS (or another major organization) now has a golden opportunity to enact a reset. It makes no sense to implement one-year extension and face the same problem one year from now. It makes no sense to deny a voice to organizations vehemently opposed to ICD-10 implementation in its current form so they plan stealth political attacks. It makes no sense to keep providers at the mercy of vendors who deliver products later than they should. It makes no sense to allow covered entities to slide on their implementation and testing plans.

I would advise that CMS convene not just listening sessions, but working sessions to establish a workable implementation plan, intermediate steps and measures, clear testing guidelines, reasonable incentives and penalties, and other steps to get the industry moving cooperatively. A workable deadline should be determined and insisted upon. And frankly, if we can’t do this, then we should continue to operate under ICD-9 until we figure out how to get ICD-10 done the right way.

About the Author

Stanley Nachimson is the founder and principal of Nachimson Advisors, LLC.

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