Part two of a two-part series (Access part one here):
The American Health Information Management Association sent a 17-page letter to HHS Secretary Mike Leavitt on Oct. 20, outlining its response to an HHS proposed rule to push for adoption of the International Classification of Diseases, 10th Version, or ICD-10, and the Accredited Standards Committee X12 Version 5010 data transmission standard.
HHS announced the proposed rule changes for ICD-10 and 5010 on Aug. 15. They were officially published in the Federal Register Aug. 22. A CMS spokesman said the final rules remain a work in progress with the goal of having them ready for release before the Bush administration ends in January.
AHIMA called for technology vendors to get going and start incorporating 5010 standards and ICD-10 codes in their systems now. It also asked that the HHS-supported Certification Commission for Healthcare Information Technology, which AHIMA co-founded, incorporate the new 5010 standards and ICD-10 codes into its testing criteria for electronic health-record systems.
AHIMA said the new codes will facilitate value-based payment systems, and that practitioners will, we believe, benefit significantly over time from the adoption of these code sets. Still, the organization said, providers also will incur costs adopting the new codes and that, Some assistance from the federal government and health plans, even if it is a low-cost or interest-free loan, should be considered.
Last month, AHIMA concluded work on its $3.2 million contract with the CMS to identify and assess the business processes, systems and operations under CMS' direct responsibilityessentially Medicarethat would potentially be affected by a transition to the ICD-10 code set. The only result of the contract work product, thus far, to be made public is a 15-page document, characterized in its title as a summary of an executive report that was posted to the CMS Web site Oct. 16.
The summary identifies 19 CMS business processes affected by the switch to 5010/ICD-10. The conversion would have a high impact on seven of them, based on their effects on operations, the risk inherent with the extent of modifications to existing processes and systems and the cost of making the switch. The high-impact areas are key components of Medicare, including claims processing for Medicare Parts A and B, and for durable medical equipment; CMS data repositories; and quality measures and pay-for-performance activities. Also noted as high-impact areas are developing and using assessment tools; calculating risk adjustment; and developing quality improvement activities.
The costs and potential benefits for both 5010 and ICD-10 conversion are staggering, according to HHS impact estimates in the proposed rules.
According to HHS, the cost of conversion to 5010 for physician practices ranges between $435 million and $870 million. Meanwhile, benefits from reduced phone calls and manual intervention in claims processes because of the more refined coding and an increase in electronic claims usage will run between $7.1 billion and $18.8 billion, according to HHS. Costs for hospitals to implement 5010 range between $932 million and nearly $1.9 billion with benefits between $1.8 billion and $4.7 billion, HHS estimates. Total overall costs for 5010 for the entire healthcare system are estimated between $5.7 billion and $11.3 billion. But total estimated benefits of conversion to 5010 range between $18.6 billion and $47.8 billion, according to HHS.
For ICD-10, the total cost for office-based physicians is estimated by HHS at $138 million and for hospitals, $186 million. The total costs for the system were estimated at $1.64 billion over a 15-year period between 2009 and 2023. The financial analysis in the proposed rule for ICD-10 did not fully allocate benefits of conversion to physicians or hospitals. It did conclude that over the same 15-year period, society as a whole would receive an estimated $3.96 billion in benefits, for a cumulative net gain of $2.31 billion over costs.
The AMA and MGMA dispute the HHS figures, however. AMA board Chairman Joseph Heyman said the costs, training and impact of the transition have been underestimated by HHS. Heyman said physicians are concerned about what he described as a hasty transition to ICD-10, particularly if the rollout is done as planned by HHS, that is, concurrently with the implementation of the 5010 data standard.
Heyman said the AMA, in its formal comments submitted to HHS, called for a bifurcated implementation process more in keeping with recommendations by the National Committee on Vital and Health Statistics. The AMA asked for the initial rollout of 5010 electronic claims standards to take at least three years. The deadline for the ICD-10 codes should not be set earlier than at least five years after formal publication of the 5010 final rules, and not until at least 95% of the industry is successfully using the 5010 standard, Heyman said.
The MGMA, in its official comment on the proposed rule, said the transition to ICD-10 was one of the largest undertakings the healthcare industry has ever faced.
It noted that a recent study it had jointly commissioned with the AMA by Nachimson Advisors estimated the costs of ICD-10 conversion for medical group practices at about $27,000 to $28,000 per physician, whether the group had just three or as many as 100 physicians. The study author, Stanley Nachimson, said the HHS cost estimates were low for both the 5010 and the ICD-10 implementations.
There were a number of factors that CMS did not consider, Nachimson said, and some of those that HHS did consider, it got wrong. Nachimson, who worked for the CMS and its predecessor, the Health Care Financing Administration, from 1978 to 2007, said, for example, HHS only assumed that 10% of physicians would need (ICD-10) training and that the software for the coding would be available essentially for free. I would question that.
Nachimson said another question still in search of an answer is how much of physicians investment in 5010 and ICD-10 will return to physicians, or whether the benefits will come back to payers or other parties.
There will be some redistribution of payments because of the coding, Nachimson said. Exactly who gets more and who gets less, well have to find out. Thats another uncertainty that the industry has to cope with. CMS talks about more-accurate billing and more-accurate payment. Whether thats a benefit to the provider or the payer is something to be questioned. No one knows for sure who gets more or who gets less. Im not sure its a net benefit to providers. Here you have to weigh the benefits of improved public health across the costs. I dont see providers getting a one-to-one benefit from implementing ICD-10.
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