The costly decision stunned many healthcare providers and payers who have collectively spent hundreds of millions to meet the CMS' previous deadline of this fall for the changeover. Every inpatient medical procedure in the U.S. is paid for using these medical codes, and the industry had been told repeatedly that all of the codes would change effective this October. ICD-10 includes more than 68,000 potential codes (PDF) for discrete medical conditions, up from the 13,000 such codes under the current system, ICD-9.
Jopp said the delay is a blessing for some smaller healthcare providers who were not prepared for the switch this fall, and he noted that a delay of just 18 months would allow more breathing room—even for providers, insurers and coding firms that had been training on ICD-10.
In the meantime, executives at hospitals and insurance companies are left to wonder whether they should continue so-called “dual-coding” efforts.
In preparation for the switch, many larger organizations had already spent significant amounts of time and money to code their procedures under both systems, and then auditing the ICD-10 side to check for accuracy. But that's a redundant expense that many executives may be tempted to cut, especially given all the other ongoing spending on health IT, like the transition to electronic health records.
Healthcare chief information officers won't want to lose their momentum toward the ICD-10 goal in areas like training, but they won't want to spend more money on it until they have a clearer understanding of where the industry is headed.
“My guess is, there are chief information officers all over the country saying, 'How do I shelve this program?'” said Andrew Smith, president of Impact Advisors consulting firm, based in Naperville, Ill.
But organizations that have spent large sums to accomplish a government goal—a mandate that was reiterated by CMS Administrator Marilyn Tavenner a little more than a month ago—may be inclined to push for the ability to use ICD-10 codes voluntarily.
“It says what they can't require, but it doesn't say what they can and can't do to facilitate the work that has been done,” said Chris Powell, president of health IT consulting firm Precyse. “That's what everyone is waiting to hear. Some organizations will stop their ICD-10 efforts until they hear that.”
News of the delay was met with both relief and annoyance from providers who had invested money and time in getting ready for an Oct. 1 implementation date.
“We have been working furiously for the last year to be ready by Oct. 1, 2014,” said Dan Robinson, chief administrative officer and vice president of corporate services for Hill Physicians Medical Group, an independent physician association based in San Ramon, Calif. “We are not going to take our foot off the pedal.”
Robinson said Hill Physicians Medical Group, which consists of a network of 3,800 doctors and its management services organization, PriMed Management Consulting Services, have invested $2.1 million in getting ready for ICD-10 adoption and he estimated that the delay will increase costs by at least 8% to 10%.
But Dave Clark, the interim administrator for Hardeman County Memorial Hospital-Quanah (Texas), said the delay will help keep his 18-bed critical access facility in Northwest Texas in business. The hospital filed for bankruptcy last May, and Clark said ICD-10 adoption would have led to a cash-flow disruption which would have forced the facility to close its doors.
Clark, a consultant who helps restore sustainability to “small hospitals that are on fire,” said he expected the conversion to cause interruptions to the fragile hospital's reimbursement, and the delay will give him time to build up a reserve. “This gives us our best shot,” he said.
Some providers vow not to take the delay lying down.
“I have a community-wide call with all the CIOs in Massachusetts on April 7,” Dr. John Halamka, CIO for Beth Israel Deaconess Medical Center in Boston. “I'm going to recommend we do our very best to move forward with ICD-10 testing and go ahead with as much ICD-10 as possible.”
One scenario is for each hospital to use ICD-10 internally and convert those codes to ICD-9 for billing, Halamka said. “From a payer's perspective, it won't look like we changed.” Halamka said the National Library of Medicine has software available for download that can perform the ICD-10 to ICD-9 conversion.
Doing nothing but waiting on ICD-10 is not an option, he said. “I can't imagine wrapping it in a bow and putting it on a shelf and then losing our investments.”
–with Joseph Conn
Follow Joe Carlson on Twitter: @MHJCarlson
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