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The SGR Repeal Bill Looks to be ICD-10-Free; That’s a Great Thing

March 31, 2015
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It’s been a very busy last few weeks in health IT. While everyone is doing their annual prep for the upcoming Healthcare Information and Management Systems Society (HIMSS) conference, held this year in Chicago in two weeks, a few major policy developments have hit the industry and have the potential to bring massive change to the healthcare landscape.

One of these developments is the proposed legislation to repeal Medicare’s Sustainable Growth Rate Formula (SGR) for physician payment, and institute a 0.5-percent payment update for the next five years for physicians, under Medicare. This bill has been passed in the House of Representatives, and is expected to pass in the Senate in two weeks, according to HCI sources with Congressional ties. While it was reported that there was no language in the bill that would further push back the transition to ICD-10—currently set for Oct.1, 2015—it would be foolish to ever count such a thing out, after past developments have proved that no matter what you might think, there could be high-level people behind another delay.

However, in his Washington Debrief this week, Jeff Smith, vice president of public policy at the College of Healthcare Information Management Executives (CHIME) noted that, “Despite the introduction of an amendment to delay the new coding set to 2016 by freshman Representative Gary Palmer (R-MS-04) it was not allowed to be included in the bill by House leadership.” Indeed, in January, Palmer was part of a group of congressional members who sent a letter to Alabama's Congressional Delegation urging to delay implementation of ICD-10 until October 2017, if not get rid of it completely until ICD-11 comes around.

The letter stated various reasons why a delay was necessary, mainly the increased granularity with codes and the extra cost for healthcare organizations.  “While spending more time with patients is what patients and physicians want, under ICD-10 we will instead spend more hours in front of a computer screen scanning 68,000 medical codes looking for the right one,” the letter states. It continues, “The transition to ICD-10 is expected to cost more than $1.64 billion over 15 years, with more than 40 percent of that expense coming from the cost of upgrading information technology systems for different participants including the government, insurance companies, physicians and hospitals.”

While I won’t argue the specific points of cost and physician training, I will disagree with Palmer on his overall take. Simply put, the industry cannot go through the burden of another delay; its effects would be rippling. There has been a great deal of money spent on ICD-10 already. How do vendors, hospitals, physician groups, and others recoup the loss of money spent getting ready if yet another delay occurs? A delay until 2017 is just the wrong move—as our Senior Editor Gabe Perna reported last month, on an ICD-10 hearing held by the House of Representatives’ Energy and Commerce Committee’s Subcommittee on Health, one of the panel members said it’s time to move forward or pull the plug. And to be honest, it’s too late to pull the plug. There has been too much invested already.

Also, regarding the boost in medical codes, while naysayers point to the increased granularity involved with that, it’s likely that providers won’t have to worry about all of them. This is according to Fletcher Lance, managing director and national healthcare leader of the Nashville, Tenn.-based North Highland, a global consulting firm, who recently told me that the firm’s Codes That Matter approach prioritizes ICD-10 implementation activities by identifying those codes that are tied to the largest revenue streams at a given healthcare organization.

To find the codes that matter, North Highland assesses multiple factors that contribute to the complexity and potential impact of the ICD-10 transition on physician and clinician productivity and organization revenues. As such, Lance says, “We find that, of the 68,000 codes that you’ll see in the hospital setting, maybe 300-500 codes matter, and often even less than that,” he says. “Not all codes are created equal; we can and have predicted which ones matter.”

This is not to say that the extra training and education isn’t necessary, but that it might not be as drastic as people such as Palmer are saying. It’s also not to say that ICD-10 doesn’t come without concerns. Earlier this month, nearly 100 physician groups representing state and specialty medical societies have written a letter to the Centers for Medicare & Medicaid Services (CMS) regarding said concerns, specifically about a lack of industry-wide, thorough end-to-end testing. Certainly, ICD-10 is not without problems or challenges, but another delay or pulling the plug is not the answer at this point of time.