HHS Explains Final Rule Decision To Delay ICD-10

Posted on by Frank J. Rosello

Word of the new ICD-10 compliance deadline came as welcome news to many in the healthcare realm – just not everyone.

There remains a corner of the industry that publicly asked the Department of Health and Human Services (HHS) to consider other alternatives, most notably ICD-11, before mandating a new deadline.

HHS explains in the final rule that it considered four options:

  1. sticking with October 1, 2013 as the deadline,
  2. maintaining the October 1, 2013 for ICD-10-PCS but delaying the compliance date for ICD-10-CM,
  3. foregoing ICD-10 and waiting for ICD-11 and
  4. mandating a uniform delay for one year.

“We proposed Option 4 because we believed it would be the most effective way to mitigate the significant systemic disruptions and payment delays that could result if a large percentage of providers are not ready to implement ICD-10 on October 1, 2013,” HHS wrote in the final rule. “In addition, as the Regulatory Impact Analysis (RIA) indicates, Option 4 is most likely to minimize the costs of delay and to maximize the benefits to providers who need more time to implement.”

To arrive at that conclusion, HHS made “some rough calculations” as to what leapfrogging ICD-10 would cost and, in the RIA, came up with the estimate of somewhere between $1 billion and $6.6 billion, representing 10 to 30 percent of what has already been budgeted for ICD-10. “Forgoing ICD-10 translates into a loss of up to $22 billion for the U.S. health care industry,” HHS wrote. “This does not take into account the projected fiscal and public health benefits that would be lost every additional year that we use ICD-9.”

But do those rough estimates constitute a proper cost-analysis regarding ICD-10 versus ICD-11? Not according to Matt Murray, MD, a pediatric emergency physician and self-described health IT advocate.

“The final rule dismisses the call from several commenters on the proposed rule for an analysis of the total costs of the two pathways to an ICD-11 implementation,” Murray wrote on his blog Digitized Medicine. “One argument made against such an analysis is that the ‘the disruption and costs of transitioning to ICD-11 are highly unlikely to be less those of transitioning to ICD-10.’ I agree that each individual implementation may have comparable costs, but that does not compare the cost of the two pathways.”

Murray continues that a comprehensive comparative analysis would look at both potential pathways. The first being to implement ICD-10 in 2014 followed by ICD-11 down the road, meaning two complete transitions; the second would be to skip ICD-10 and adopt ICD-11, which Murray explains as one full implementation plus “one sunken ICD-10 investment.”

In other words: It might actually be less expensive to cut bait on ICD-10 and pay for just one complete implementation to ICD-11, an alternative that the American Medical Association (AMA) said in late June it intended to investigate.

AMA board chair Steven J. Stack, MD wrote the association’s reaction to the new deadline. “This is not the final action on this issue. In the rule, the administration stated its commitment to ‘engage stakeholders on a wide variety of ICD-10 implementation issues, including reduction of burden on physician practices,’” Stack wrote on the AMA’s site. “In the coming months, the AMA will work constructively with the administration to reduce the burden of ICD-10 for physicians so physicians can spend more time with their patients.”

Another ICD-10 skeptic, the Medical Group Management Association (MGMA) circulated a statement reiterating that the MGMA is “not confident that critical trading partners, including Medicare and state Medicaid plans, will be ready in time to conduct testing well in advance of the October 2014 compliance date,” Susan Turney, MD, president and CEO of MGMA, said in a statement.

The foundational element of the argument put forth in favor of holding out for ICD-11 is that the further ICD-10 gets pushed back, the closer ICD-11 comes to being a tangible, albeit nascent, classification system that stands as a viable alternative.

Indeed, in its final rule HHS referenced a pair of oft-cited readiness surveys, one by CMS and the other from WEDI, each of which paints a chaotic picture of missed timelines, ICD-10 projects yet to get off the ground, and vendors not ready to deliver updates soon enough. Which has more than just the MGMA concerned about the industry meeting the mandate, even by the new October 1, 2014 deadline.

“I fear that that the burden will be excessive on healthcare organizations in 2014 to implement ICD-10 and meet the 2014 Stage 2 Meaningful Use requirements announced by CMS this week. This burden will be greatest on the small, individual physician practices already throttled by meaningful use, 5010, e-prescribing and healthcare reform. They are struggling to find the time and resources for the ICD-10 effort,” Murray wrote. “Since the EHR Incentive Program has a specified timeline under ARRA, I believe this excessive burden is likely to trigger another delay of ICD-10, at least for small physician practices.”

Time alone will tell if HHS and the healthcare industry are, once again, facing such a disastrous transition to the new codes so as to necessitate another delay beyond 2014 – as well as whether or not by then ICD-11 will be sculpted enough to figure more prominently in the decision.

“Given the considerable financial investment made by entities in preparation for ICD-10, and the timelines and uncertainties regarding a possible adoption of ICD-11,” HHS explained in the final rule, “we cannot forgo ICD-10 in the hopes that a future, more effective code set will be adopted.”

Article written by Tom Sullivan, Editor of Government Health IT

Leave a Reply

Follow GOEILLC on LinkedIn Follow GOEILLC on Twitter