On April 1, President Obama signed into law a bill that again delays a permanent fix of the sustainable growth rate formula, or SGR, the so-called “doc fix.” The bill also contained a surprise provision added by Congress to delay implementation of the switch from ICD-9 to ICD-10. The mandated conversion was supposed to take place by October 1 of this year; its delay will have a range of impacts on everyone from physicians to payers.
Hospitalists and others must weigh their options going forward, as many health systems and groups are already well on their way toward compliance with the 2014 deadline.
At this point, prevailing wisdom is that Congress added the delay as an appeasement to physician groups that would be unhappy about its failure to pass an SGR replacement, says Jeffrey Smith, senior director of federal affairs for CHIME, the College of Healthcare Information Management Executives.
“The appeasement, if in fact that was the motivation, was too little too late,” Smith says, adding Congress “caused a lot of unnecessary chaos.”
For instance, according to Modern Healthcare, executives at Catholic Health Initiatives had already invested millions of dollars updating software programs to handle the coding switch ahead of a new electronic health record system roll-out in 89 of its hospitals, which would not have been ready by the ICD-10 deadline.
“Anyone in the process has to circle the wagons again and reconsider their timelines,” Smith says. “The legislation has punished people trying to do the right thing.”
The transition to ICD-10 is a massive update to the 30-year-old ICD-9 codes, which no longer adequately reflect medical diagnoses, procedures, technology, and knowledge. There are five times more diagnosis codes and 21 times more procedural codes in ICD-10. It’s been on the table for at least a decade, and this was not the first delay.
In 2012, when fewer groups were on their way to compliance, CMS estimated that a one-year push-back of ICD-10 conversion could cost up to $306 million. With the latest delay, the American Health Information Management Association says CMS now estimates those costs between $1 billion and $6.6 billion.
However, according to the American Medical Association, which has actively lobbied to stop ICD-10 altogether, the costs of implementing ICD-10 range from $57,000 for small physician practices to as high as $8 million for large practices.
The increased number of codes, the increased number of characters per code, and the increased specificity require significant planning, training, software updates, and financial investments.
The Medical Group Management Association (MGMA) also pushed for ICD-10 delay, concerned that many groups would not be ready by Oct. 1. MGMA surveys showed as much, says Robert Tennant, senior policy advisor for MGMA.“We were concerned that if everyone has to flip the switch at the same time, there will be huge problems, as there were for healthcare.gov,” Tennant explains.
What MGMA would like to see is more thorough end-to-end testing and staggered roll-outs. Hospitals and health plans should be permitted to start using ICD-10 coding when they’re ready, even if ahead of the next deadline, Tennant said. MGMA would also like to see a period of dual coding built in.
The ball is now in CMS’ court.