Going the distance

It's two years now and counting down, until Oct. 1, 2013. That's when, according to experts, the information technology sector of the U.S. healthcare industry must make, quite possibly, its biggest lift ever—ready or not.

“It's a big, big date,” says health IT consultant Stanley Nachimson. “Bigger than Y2K or 4010 or 5010 or any of the HIPAA implementations. It will impact everything from patient registration to reporting. It's a big deal.”

Nachimson should know. The principal of Nachimson Advisors, a health IT consultancy, is a former senior technical adviser for health IT activities at the CMS. The “it” he's talking about is the CMS-mandated conversion from the International Classification of Diseases Ninth Revision, or ICD-9 family of diagnostic and procedural codes in current use, to the far larger and more complex ICD-10 code family.

It's two years now and counting down, until Oct. 1, 2013. That's when, according to experts, the information technology sector of the U.S. healthcare industry must make, quite possibly, its biggest lift ever—ready or not.

“It's a big, big date,” says health IT consultant Stanley Nachimson. “Bigger than Y2K or 4010 or 5010 or any of the HIPAA implementations. It will impact everything from patient registration to reporting. It's a big deal.”

Nachimson should know. The principal of Nachimson Advisors, a health IT consultancy, is a former senior technical adviser for health IT activities at the CMS. The “it” he's talking about is the CMS-mandated conversion from the International Classification of Diseases Ninth Revision, or ICD-9 family of diagnostic and procedural codes in current use, to the far larger and more complex ICD-10 code family.

Before the long-awaited switch to ICD-10 happens, the industry will have jumped through a steeplechase of other technical and organizational hurdles. And it's been a long process: the run-up period between the CMS publication of its final rule for ICD-10 in January 2009 and the compliance deadline is more than 56 months.

The hurdles include completing by Jan. 1, 2012, the prerequisite and aforementioned CMS-mandated conversion from the ASC X12 Version 4010 claims transaction standards to the more robust Version 5010 needed to handle claims using the ICD-10 codes.

A far more painful challenge for lots of providers before the ICD-10 switch will be the clearing of the many meaningful-use criteria set by the CMS for the Medicare electronic health-record incentive program under the American Recovery and Reinvestment Act of 2009.

Through August, fewer than 2,300 hospitals, physicians and other “eligible professionals” have cleared Stage 1 meaningful-use standards and been paid, according to the CMS. A gold rush of providers is expected to join the program in 2012.

To do that, many provider organizations will be forced to install and meaningfully use new, certified EHRs. And then by Oct. 1, 2013, the first group of meaningful users could be forced to implement EHR upgrades to comply with more stringent Stage 2 criteria. Health plans and claims clearinghouses, meanwhile, must upgrade their IT systems for 5010 and ICD-10.

So, with such a full load of other IT projects, how is the industry faring with its preparations for ICD-10?

It depends on whom you ask. Nearly everyone contacted for this story says the industry as a whole is behind schedule, but the ICD-10 awareness level is rising among industry organizational leaders and there are even a few bright spots of what could be called a high degree of advance preparedness.

Dave Roach is vice president of information systems and chief information officer at Kadlec Health System, Richland, Wash. Kadlec operates a 201-bed hospital and runs 15 outpatient clinics.

Roach says members of the hospital's coding team have been “going to conferences and webinars for ICD-10,” but for now, ICD-10 is not a top priority.

“We're putting in new systems to meet meaningful use, and upgrading our systems for 5010 and then planning for ICD-10,” he says. “So we have all of these coincident priorities. A lot of us are in that boat.

“If we can get live and successfully get our physicians using the EHR, we'll go for meaningful use in 2012 and then I think we put all of our attention on ICD-10,” he says. “If we have a full 16 to 18 months to work on it, I'm confident.”

Two weeks ago, the American Health Information Management Association released results of its August membership survey for ICD-10 compliance readiness. The survey drew 639 respondents—448 from inpatient settings and 191 from workers elsewhere in healthcare. It found a substantial majority (85.5%) of inpatient respondents had begun work on ICD-10 planning and implementation, up from 62% in a similar survey in August 2010, and 55% in April 2010. But much work remains to be done on component parts of the planning process, according to inpatient respondents (See chart above).

“The good news is we're seeing progress,” says Sue Bowman, director of coding policy and compliance for AHIMA. The bad news: “There are still a lot of people behind trying to catch up.”

The Workgroup for Electronic Data Interchange, a not-for-profit collaborative of payers, providers, claims clearinghouses and IT vendors, also recently conducted a survey of its members on ICD-10 readiness.

Final results are not yet published, but Jim Daley, WEDI's chairman-elect and

co-chair of its ICD-10 workgroup, shared some of the highlights.

According to WEDI, two-thirds of payer and provider respondents haven't completed a full impact assessment; two-thirds of vendor respondents haven't given their customers information about beta test dates—which Daley sees as evidence of particularly worrisome lack of communication—and three-fourths of payers and providers surveyed don't plan to begin external testing with trading partners until 2013.

Last summer, WEDI revised its original timeline for 5010 and ICD-10 conversions because so many members had fallen off pace. Now, even with WEDI's new, compressed timeline, the industry is still lagging behind.

“People should have completed their impact assessments by January of this year,” he says, but the survey data show only about a third have done so.

Still, optimism reigns. A majority of payers and providers expressed confidence their vendors will deliver their IT products in time for them to achieve ICD-10 compliance, Daley says.

“People are moving along,” he says. “Progress is happening, but not as quickly as we had hoped. Certainly it's way too early to say we won't make it.”

The magnitude of both the effort and the impact of the ICD-10 conversion shouldn't be underestimated, according to industry consultants.

One of them is Guillermo Moreno, vice president of the healthcare practice at Experis, a Milwaukee-based project management and professional resources consulting firm. “You can't single out any part of the industry that is totally unglued and not engaged, or is totally engaged,” he says. “Frankly, the part that's really scary about this is there is a huge amount on the provider side of the business that hasn't even started. The CMS is saying they will not relax the deadline. They are going to expect to receive information in the ICD-10 format.”

AHIMA's Bowman says her organization, which is hosting its annual convention this week in Salt Lake City, has been focusing on workforce development and readiness.

“Our members being the HIM and coding experts, they have their fingers in a lot of initiatives that ICD-10 is going to impact,” Bowman says. “They're managers of the coders, so they're looking at getting all of their coders trained. If you have a big staff, that's a lot of training. A lot of people are getting ready with the planning for that.” But that doesn't mean ICD-10 training should begin for the rank-and-file coder, at least not yet.

“We expect that to begin late next year,” Bowman says. “We've been recommending six to nine months prior to the compliance date for the actual training of the coders.”

“Right now, our academies are training trainers,” she adds. Each program is three days, “but there are some prerequisite

courses and additional homework outside of the face-to-face training,” about 50 hours of work in total. So far, there are about 1,500 AHIMA-approved ICD-10 trainers, and more to come, but there could be gaps, Bowman says.

“Small physician offices can't send their whole staff off for training for three days,” she says.

Is the national capacity there for training an ICD-10-savvy workforce fast enough? Bowman isn't sure. “I think for the size of the initiative, it's going to be interesting, because I don't know another where it's ever been tried on this scale before,” she says.

Dan Fagin is managing director and a regional practice leader for Protivit, a consulting and internal audit firm that works with providers and health plans.

“I think evaluating and planning for the impacts to cash flow is going to be important,” Fagin says. “Most of these not-for-profit systems and even some of the for-profits are not operating on enough of a cash flow to handle a significant increase in (accounts-receivable) days.”

Getting ready for ICD-10 should include financial preparedness, he says. “Plan on talking with lenders, looking at lines of credit, and also looking at, from a financial perspective, if you have bond issues that have covenants with working capital (requirements) they need to be looked at.”

Ed Hock, director of the revenue-cycle group at the Advisory Board Co., says providers can do dry runs and tests on how ICD-10 will affect revenue, and “a little of that is being done across the country, but I think it really comes down to systems. Until the systems are there, we can practice on a small scale, but it really doesn't warrant collecting the data.”

“Everyone has to upgrade their system,” he says. “You have to have the back-end coding aspects of it right before you start capturing the codes. A large subset of providers is frustrated because the vendors are holding us back. I have yet to meet the individual who has all of their systems up and running.”

Providers should expect delays in claims processing, according to Hock. One reason is coding delays, which surfaced when Canada converted nearly a decade ago to its own, somewhat lighter version of ICD-10.

According to a 2009 presentation by a trio of Canadian and U.S. consultants to the Healthcare Information and Management Systems Society—a study oft-cited by U.S. consultants—Humber River Regional Hospital in Toronto experienced significant coder productivity losses when it implemented its version of ICD-10 in 2002.

Measured in the number of charts completed per hour, productivity fell by 37% to 64%, depending on the department, during July 2002, the first month ICD-10 codes were used. Productivity was still off by 15% to 20% eight months later.

A March 2004 RAND Corp. study on the broader impact of ICD-10 in Canada concluded—without providing supporting data—found that Canadian coders “became sufficiently proficient with the new codes well inside six months, with no reported loss in long-term productivity,” Hock says.

Dr. Jane Thilo, a senior consultant in the healthcare practice group at OTB Solutions Group, a Seattle-based IT and business process consultancy, says physician training will be “huge.”

“I think a lot of physicians want to think that the coders will handle it,” Thilo says. But neither coders nor slick software will address all of the issues, she adds.

ICD-10 codes to a much greater degree than ICD-9 “reflect the pathophysiology of some of the diseases processes,” Thilo says. That's one reason why physicians will need to be ICD-10 trained. Another is increased specificity.

Orthopedic surgeons, for example, will have to contend with new codes that are “very specific about type of fracture,” Thilo says. “It's not just the arm; it's the humerus or the radius. It's whether it's a greenstick fracture or a spiral fracture and whether it's right or left.

“There are some unspecified codes in ICD-10, but one of the things the payers may do is not pay for unspecified codes or pay at a lower level,” she says. “That's where physicians will feel the impact, on revenue, unless they put a little more effort into it.”

For some members of the health IT community—the vendors—the ICD-10 conversion means challenge and opportunity. Steve Brewer, executive vice president for product solutions at Merge Healthcare, a Chicago-based developer of radiology information and other clinical IT systems, sees “a revenue opportunity for us” as provider organizations drop older competitors' products.

“But frankly, the win for us is getting a lot of people off older versions” of the company's own systems. “That allows us to do away with legacy products that we don't need to support anymore.”

Todd Johnson, president of Salar, a developer of inpatient physician documentation and billing software systems, predicts the competition among technology companies will focus on their systems' ability to facilitate the coding process.

“There is going to be a real expectation of the vendors to help with that,” Johnson says. “That's where the battle is going to be won in how manageable you can make the browsing and selection of ICD-10 codes.”

Meanwhile, Peyman Zand, director of strategy and governance at 431-bed Rex Healthcare, Raleigh, N.C., says his organization is well on its way toward ICD-10 preparedness thanks to a potent mix of advanced planning and fear.

Rex started planning earlier than most healthcare organizations by hiring a consultant in 2010 on what Zand described as a “very, very high level” engagement.

“That firm came in to do two things: One was to educate our executives and all of our healthcare staff providers what (ICD-10) means to them. And the other was take the top 10 of our systems to give us an order of magnitude what this would look like,” he says. “We looked at it and were sufficiently scared” to put out a request for proposals. The winning consultant began work in January and finished in five months.

Why get outside help to do the planning?

“Two reasons,” Zand says. Even with a 100-person IT department, “it was an extra amount of effort and everyone within the IT organization was pretty well booked up.”

Second, “We have over 400 (IT) systems here in the hospital. It really took a team to assess how many of them were impacted and at what level.”

Rex is now implementing the consultant's recommendations, and that, too, will require some outside help.

“Training (for ICD-10) is another beast. We'll probably bring in resources to facilitate that. Again, we just don't have the resources,” he says.

Zand says he is “very confident” Rex will be ready for both the Version 5010 conversion deadline at the end of this year and the ICD-10 deadline in October 2013. The plan is to have all systems 5010-ready by Oct. 1 of this year and ICD-10 operational by the first quarter of 2013.

“I won't lose any sleep over it,” Zand says.