Double trouble

Think about fighting King Kong and Godzilla, or Mothra and the Blob. Tussling with one is bad enough. But both at once? Who can save mankind? Now pity the poor healthcare industry executives who must face and vanquish two huge technology monsters in 2014, and do it with dozens of other IT projects chewing at their feet.

After decades of planning and delays, implementation of the complex new ICD-10 coding system is finally getting close. Preparations for the shift have driven all healthcare IT hands to their battle stations.

But many of those same health IT troops simultaneously are trying to execute this year's required upgrade to Stage 2 meaningful-use criteria for electronic health records under the federal incentive payment program.

Modern Healthcare's reader IT survey shows ICD-10 and Stage 2 are by far the most difficult of the many health IT challenges ahead, with ICD-10 out front.

Losing an EHR payment in 2014 and being dinged for a Medicare penalty in 2015 are bruising consequences of missing Stage 2 meaningful use and 2014 upgrade requirements. But failing at ICD-10 compliance—or failing to cope with the exponentially more complex ICD-10 codes—could trigger catastrophic cash-flow problems. Under federal law, after Oct. 1, Medicare, Medicaid and private payers aren't supposed to pay claims not coded in ICD-10.

“I think we'll be prepared internally,” said Dale Reigle, CEO of Rocky Mountain Orthopaedic Associates, a 14-physician group in Grand Junction, Colo. But if Medicare claims processors handle their preparations for ICD-10 the way federal contractors did in building Obamacare's troubled HealthCare.gov website, Reigle said, “We could go as long as 60 days without getting paid.”

We asked readers to choose their top three hot-button IT issues from a list of 20 options. ICD-10 topped the list, chosen by 22% of survey respondents, followed by 18% for Stage 2, 7% for data security and 6% each for other topics. These topics included consolidating IT functions using common applications, enabling patients to access selected data via the Internet, building communications links with physicians, and replacing their current EHR with another vendor's system.

We also asked healthcare leaders about the implementation status of 13 major IT projects—whether they were complete and operational, in process for implementation, starting implementation in the next 12 months, planned but not started, or not contemplated at this time.

Only 8% of respondents indicated their ICD-10 work was done, 57% listed it as a work in progress, 19% said they would start within 12 months, 11% had not started and 5% said they had not considered it.

And yet, when asked how confident they were that their organization would be fully compliant with ICD-10 by Oct. 1, 36% said they were highly confident and 40% were somewhat confident. Another 12% were unsure, 8% were somewhat pessimistic, and 4% were highly pessimistic.

“There is a disconnect,” said Stanley Nachimson, a Baltimore-area health IT consultant and a specialist in ICD-10. He noted that although 76% of respondents are confident they would be ICD-10 compliant, only 65% were done or in the process of ICD-10 implementation. “I think there is a lack of understanding of how complicated this is, if they're highly confident and haven't even started,” he said.

HHS' tortuous history with ICD-10 shows why some provider organizations may have procrastinated. Work on ICD-10 by the World Health Organization was completed in 1990. Not until 18 years later, under the George W. Bush administration, did HHS publish a proposed rule calling for ICD-10 adoption by 2011. In the final 2009 rule, however, the start was deferred to 2013, which in 2012 was pushed back by HHS to the current Oct. 1, 2014 deadline. HHS has said there will be no more delays.

And yet, 48% of survey respondents wanted HHS to once again delay ICD-10 implementation, while 41% favored no further delays and 11% said they were unsure. Half indicated a delay would be helpful, 14% hurtful and 36% said it would have no impact.

Those seeking a delay said it would allow limited resources to be deployed for other projects, give vendors more time to certify their products for Stage 2, and let Medicare contractors conduct end-to-end testing of their claims processing systems with providers. “The financial risk is enormous,” wrote a survey respondent who did not want to be identified. “A longer period of time to test our systems or even run them in parallel would be very good.”

Reigle said in the survey that he was “slightly pessimistic” that his group would be ICD-10 ready. But in an interview, he said it's the CMS that really has him worried. “There are going to be limited opportunities for testing before it goes live,” he said.

He's also concerned because orthopedists, along with rheumatologists and family practitioners, have larger than average increases in the number of their codes when they switch from ICD-9 to ICD-10. Given the huge increase in codes and the extended time it will take physicians to code their diagnoses, “I think we're going to see a lot larger (claims) denial rate (and) we're going to have more payers requesting more copies of medical records,” Reigle said.

In preparation, he said, the practice significantly increased its line of credit to cover payroll and other costs if, as expected, coder and physician productivity drops.

But several readers argued against further delay, saying it would diminish the effectiveness of already-completed staff and physician training in which they have invested lots of time and money.

Nachimson recently updated the estimate of practice costs related to ICD-10 implementation and predicted that a small physician practice could see total costs of $57,000 to $226,000, while large practices could face costs of $2 million to $8 million. About 70% of physician practices need to upgrade their EHRs to meet ICD-10 requirements, but only about 40% have contracts that oblige vendors to pay for mandated updates, according to his report.

He predicted that a significant portion of providers would not be ready. “I can sense as many as 20% to 25% of the providers will not be capable of sending in appropriate ICD-10 codes,” Nachimson said.

Follow Joseph Conn on Twitter: @MHJConn