Feds Propose One-Year ICD-10 Delay

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The U.S. Department of Health and Human Services (HHS) Monday announced a proposed rule to postpone the compliance date for ICD-10 by one year to Oct. 1, 2014.

The compliance deadline for ICD-10 had been set for Oct. 1, 2013. However, in February, after pressure from some health industry groups, including the American Medical Association, HHS disclosed it was evaluating extending the deadline for ICD-10, but did not announce how long the extension would be.

Meanwhile, in addition to extending the ICD-10 deadline, HHS Monday also proposed establishing a unique health plan identifier (HPID) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The Centers for Medicare and Medicaid Services (CMS) said in a statement that unique HPIDs "would save health care providers and health plans up to $4.6 billion over the next 10 years" by cutting red tape and "simplifying administrative processes for doctors, hospitals, and health insurance plans."

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Currently, when health plans and entities such as third-party administrators bill providers, the billing party is identified using a wide range of different identifiers that do not have a standard length or format. As a result, healthcare providers run into a number of time-consuming problems, such as misrouted transactions, transactions rejected due to insurance identification errors, and difficulty determining patient eligibility.

As for ICD-10, AMA and some other healthcare provider organizations had written letters to HHS Secretary Kathleen Sebelius in recent months expressing concern that physicians would be unable to meet the Oct. 1, 2013 compliance deadline for ICD-10, due to the many other technology-related, regulatory, and reporting projects also underway at their organizations, including the rollout of e-medical record systems to participate in the HITECH Act's financial stimulus programs for the adoption of meaningful use of health IT.

Before HHS' announcement of the one-year ICD-10 delay, some industry watchers had speculated that HHS might postpone ICD-10 indefinitely or perhaps until the World Health Organization (WHO) releases its draft of the upcoming ICD-11, which is expected in 2015.

ICD-10, short for the International Classification of Diseases 10th edition, expands by thousands the number of medical diagnosis and in-patient procedure codes used for clinical, billing, and financial systems of healthcare providers, payers, and other covered entities, compared to ICD-9, which is still used in the U.S. today. The U.S. is the last major country to move to ICD-10.

Depending on the size of a medical practice, the AMA estimates the cost of implementing ICD-10 to range from $83,290 to more than $2.7 million per organization. Some think the figure could climb to $100 million or more for multi-hospital systems.

"This is a massive administrative and financial undertaking for physicians, requiring education, software, coder training, and testing with payers," said AMA CEO James Madara in a letter to Sebelius in February.

ICD-10 includes 68,000 diagnosis codes, compared to 13,000 in ICD-9, while in-patient procedure codes in ICD-10 grows to 87,000 from only 11,000 in ICD-9. The new codes in ICD-10 provide greater clinical detail and cover medical treatments and technologies not reflected in the older ICD-9 codes.

CMS said the conversion to ICD-10 will allow greater analysis of clinical and treatment data and will help to reduce fraud and improve accuracy in reimbursements.

Some healthcare provider organizations have contended that the burdensome remediation work needed to comply with ICD-10 outweigh the potential benefits.

HHS said the one-year delay for ICD-10 compliance offers providers more time to prepare and fully test their systems.

Industry speculation in recent weeks of the U.S. possibly skipping ICD-10 and instead transitioning from ICD-9 to ICD-11 wasn't exactly embraced by some, who argued that such a move eventually would be even more burdensome for healthcare providers while penalizing organizations that have been making solid progress with their ICD-10 conversion work.

ICD-11 will build on ICD-10, and final U.S. requirements for ICD-11 might not be ready for at least another five years after the WHO finishes its draft in 2015, said Carl Ascenzo, VP of global healthcare at Virtusa, a Westborough, Mass.-based IT services firm.

"It's been 30 years since work started on ICD-10, and almost 20 years since the U.S. completed its version of ICD-10," said Ascenzo, who was previously CIO at Blue Cross Blue Shield of Massachusetts."In my opinion, to do [the work] well, delay it a bit but don't stop it. We need to get this done," he said in an interview with InformationWeek Healthcare.

Lynne Thomas Gordon, CEO of the American Health Information Management Association, said her organization had been opposed to delaying the ICD-10 compliance deadline.

"I'm scared there will be lost momentum," she told InformationWeek Healthcare before the HHS announced the one-year delay.

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