April 11, 2014

Why ICD-10’s Newest Delay is Both Good and Bad

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Tags: Medical News

Perhaps the third time truly is the charm. At least that’s what the federal government must be hoping. Following a positive vote in the House of Representatives, the Senate voted 64-35 in favor of legislation that delays a 24 percent reduction in Medicare reimbursement as well as pushes ICD-10 implementation back one calendar year.

This newest rescheduling of ICD-10’s implementation marks the third such delay in the massive transition to the new code since it was suggested in 2005. Already used by the medical industries of most of the developed world, ICD-10 features a total of 68,000 reimbursement codes, a staggering jump from the 14,000 currently in use with ICD-9.

The value behind ICD-10 lies in the specificity that comes with the huge increase in diagnosis codes. By increasing the number of codes, providers will be able to better communicate to insurance companies the complexities of the treatments they deliver to patients.

For healthcare providers, this more accurate –albeit, more complex—coding system will result in better data articulation, which could lower costs by more effectively evaluating complications and precisely tracking outcomes. ICD-10 could also help regulators and researchers gain a clearer view of the connections between the specific procedure performed, physician performance, and patient outcome.

This most recent delay in ICD-10 has met with near unanimous support from professional societies like the American Medical Association, American Academy of Family Physicians, and the Medical Group Management Association.

Here’s why it’s good for providers:

Small Practices Can Allocate Better

Even with the mountains of HITECH money spent on subsidizing implementation of healthcare IT – mostly in the form of electronic medical records – only a reported 13 percent of physicians are ready to attest to Meaningful Use Stage 2 this year. And the majority of those providers are hospitals and larger, multi-physician practices. Small and solo practices are still losing out, and it comes down to funds.

While EHR adoption is reaching 80 percent for primary care physicians in large practices, it’s still stagnating around 50 percent for solo practices. Even with Meaningful Use incentives, funding the substantial project of overhauling their practice’s infrastructure still stands as the greatest obstacle.

According to a study conducted by the AMA, implementing ICD-10 could run small practices anywhere from $56,000 to $226,105 which would only compound the challenges of finding and implementing an EHR – an undertaking which could cost as much as $44,000 per full time provider, with ongoing costs averaging $8,500.

Delaying ICD-10 implementation gives these providers some breathing room, and allows them to find take on one challenge at a time.

The Market Isn’t Ready

Just because a majority of providers may have implemented an EHR doesn’t mean they’re prepared for ICD-10. Part of that is undoubtedly due to a lack of capable resources in the market.

A 2013 Emdeon survey found that only 12 percent of top healthcare software vendors confirmed that their technologies were ICD-10 ready. The number increased to 23 percent who said they would be prepared by this year. Incredibly, nearly 50 percent refused to comment on their organization’s timeline for ICD-10 readiness.

If the technology providers aren’t prepared for ICD-10, it seems quite unreasonable to expect widespread physician preparedness. Delaying implementation until next year invites the market to catch up, which helps both vendors and physicians.

As to be expected in the US healthcare industry, opinions were divided about the delay. The AHIMA in particular has been outspoken in its opposition to further delaying ICD-10. Let’s examine the negatives of pushing ICD-10 implementation back.

Loss of Current Progress

“There are no more delays and the system will go live Oct. 1,” said CMS Administrator Marilyn Tavenner earlier this year. With such unequivocal statements issuing from healthcare’s governing body, it’s understandable why all areas of the industry would treat such a statement as fact.

As such, significant investments have been made in anticipation of the transition to ICD-10, mostly notably the 25,000 students who have exclusively learned the new code system in their undergraduate and baccalaureate health information management programs. Because ICD-10 codes use more characters than ICD-9, these students won’t be familiar with the current lexicon.

Further, CMS predicts that delaying implementation another year could cost from $1 to $6.6 billion.

ICD-10 and the Doc Fix

While certain significant organizations support the ICD-10 delay, the vast majority universally denounce the bill in which it’s included. The one year delay is basically tacked on to a further one year delay in settling the SGR formula, which dictates the percentages of reimbursement that Medicare pays practicing physicians.

While we won’t explore the intricacies of the SRG system, it’s important to note that it’s a source of controversy, and had the federal government not delayed making a decision on its workings, Medicare would have paid doctors 24 percent less this year.

Tacking an ICD-10 delay onto the SRG delay is arbitrary at best.

So while the debate continues to rage, providers in the market for an EHR have more time to focus on hitting the three month Meaningful Use window this year before they focus on the behemoth that is ICD-10 next year.

If you’re looking for ICD-10 complaint EHR software, use our product selection tool to find the right solution for your practice in minutes.