With the news now confirmed that the transition to ICD-10 will be delayed another year, various industry groups have made their disappointment clear, expressing a strong desire that another delay will negatively impact the healthcare industry.
Certainly, provider organizations are worried about how the delay will affect their financials—after all, the Washington, D.C.-based American Health Information Management Association (AHIMA) expressed deep disappointment in the results of President Obama signing the “doc fix” bill into law, estimating that another one-year delay of ICD-10 would likely cost the industry an additional $1 billion to $6.6 billion on top of the already incurred costs from the previous one-year delay.
That being said, not everyone sees the delay exclusively as a negative. A recent report from Fitch Ratings, a New York City-based global rating agency, concluded that a one-year extension of the deadline for hospitals and payers to transition to ICD-10 is viewed as a positive credit development for not-for-profit hospitals. Further, there have been conflicting reports on how ready payers were for the transition; some say the large payers were ready, others say that a significant amount of all payers were not.
To get a better idea of the differing perspectives on what the ICD-10 delay means for the industry, Healthcare Informatics spoke separately with executives from two provider organizations to gauge their opinions. Below are excerpts of interviews done with Stacey McIntosh, solution partner and project manager for the Houston-based 12-hospital Memorial Hermann Health System; and Glenn Harnett, M.D., medical director of American Family Care, an urgent care center with more than 100 facilities spanning 26 states. Joining McIntosh and Harnett for the article is Eric McDonald, CEO and founder of DocuTAP, a Sioux Falls, S.D.-based provider of integrated electronic medical records (EMRs) and practice management technology for urgent care practices. DocuTAP is the vendor used by American Family Care in preparation for its ICD-10 transition.
HCI: What was your in-the-moment reaction to the news that ICD-10 will be delayed again?
McIntosh: We are a big organization, so there were mixed reactions across the board. But our general consensus was, “Are they crazy?” If not now, then when? And realistically, we could be in the same boat next year. So we would have preferred to move forward as opposed to having another delay. There was definitely a scramble, and we were being told to call our congressmen and our senators; everyone seemed to be caught off guard and was asking why the ICD-10 element got included in this bill. That being said, we will take an optimistic approach to this and revamp, revise, and optimize some of the more troubling areas. Going forward, the delay will allow us to optimize time and make problems work. For one, technology readiness has been a challenge for us. It also will give us a better stance in working with vendors and the timelines that they may have been struggling with.
Harnett: Truly, I couldn’t have been more pleased. I felt like our company and our vendor had the ability to be ready for this fall, but we had the feeling that the majority of our insurers weren’t going to be. Giving the insurers more time to get on board and be prepared is a good thing.
Glenn Harnett, M.D.
Also, we have meaningful use Stage 2 starting this year as well, so that is a big focus for us clinically, being able to meet those new measures and moving forward with our vendors. The two of them [ICD-10 and MU] combined were creating new hoops to jump through. But there was more concern with our cash flow—if the payers weren’t ready, we would have a significant delay in getting paid for the services we provide. So, whoever decided to put this in the Medicare “doc fix” bill was brilliant.
HCI: How ready for ICD-10 was your organization prior to the delay and how will the delay affect you going forward?
McIntosh: We did feel confident moving forward, since we did Centers for Medicare & Medicaid Services (CMS) testing with the big payers. And we will do more testing, but will delay that until the fall now. This does affect us [negatively] from a financial standpoint, especially with contracts from our vendors. It also affects the education extensions, since we had to cancel all 48 physician training sessions with specialties across the system. We will still pursue that, but will delay that towards the fall as well. So when it comes to the education of the coders and physicians, while we will still pursue those avenues and keep them going, we will have to extend them and pay for those extensions. You have to keep things fresh, because if you don’t use it, you lose it—and that keeps the costs adding up.
McDonald: When I think about provider training, the number of people who have already been trained have to be a pretty small percentage. I don’t know any organization that will take its physicians and put them through ICD-10 training seven or eight months in advance. Most people do that during the weeks and months leading up to it, so it will be fresh in their minds. So I don’t buy training as a reason for extra costs. Maybe someone had to buy modules for their technology, but the only way that is a cost is if you never move to ICD-10. I’d really love to know how [AHIMA] came up with that number, because I don’t see it. If ICD-10 never happens there will be a big cost, but otherwise I just don’t get it.
Harnett: At this point in the process, a lot of our work was being done by the vendors. So moving forward, were about to send our coders to get extra training, and we were also going to test the new codes with our insurers. But we haven’t reached that point yet—that would have been more mid to late summer—so the delay didn’t affect us in terms of what we could do or not do. It was really more on the vendors.
And I can’t speak for the rest of the industry but I don’t see where all of these extra costs [as indicated by AHIMA] are coming from. If the insurers aren’t ready, they aren’t ready. That’s simple to me. We would have faced more of a burden once ICD-10 went into effect, considering not everyone was ready.
HCI: There seems to be some fuzzy language included in the new date. Is more guidance needed from CMS?
Harnett: I have complete confidence in us and our vendor, the transition may happen. The exact date is not super important at this moment.
McDonald: Yes, CMS has been very quiet about the entire thing; its website still says October 1, 2014. There is fuzzy language and they haven’t said anything, and that doesn’t really help anyone. But they will give clarification at some point.
McIntosh: CMS definitely owes us some direction. Are they going to allow those that are ready to move forward? And if so, will how will that happen? We will actually start coding in January 2015, so that’s really our new target date, not October 2015. Either way, there needs to be more direction and guidance from CMS, since there are lots of unanswered questions. I think you will start to see industry groups asking those questions and pushing CMS for the answers. But I don’t think CMS has a solid plan right now—it just seems like no one knows.
HCI: There were conflicting reports on how ready the payers were. How ready were your insurers?
McIntosh: It’s a mixed bag. Some insurers appear to be ready and have been ready with a structured plan to test with providers for quite some time now. Others, however, have been less engaged with us until recently, and I think it’s a combination of having to figure out how to work with the number of providers they service and not having a structured plan in place. You really don’t know an insurer’s readiness until you begin communicating about scheduling an end-to-end test event. I think the insurers that have been ready and have preliminary results will work to refine their processes based on those early results while those insurers that aren’t/weren’t quite ready will use the delay to ensure they aren’t sitting in this same spot at this same time next year.
McDonald: Everyone we talked to and everything we heard said that only 30 percent of our payers would be ready by October 1, 2014. And really, they have no incentive to be ready, because if they’re not ready, all of a sudden they will be able to reject more claims. As soon as they reject a claim, the likelihood you will resubmit it successfully the next time is probably one in five or one in seven. There is no incentive to get it right the first time. If there were penalties incurred for every day they were late and they were told that the error rate of their rejections cannot increase, then they would have an incentive to get it right. If they get it wrong, the only thing they do is save money. You need to give the payers some incentive, but also have to [penalize them] if they don’t get there.