WASHINGTON – The Obama administration’s validation that it would extend to Oct. 1, 2013, the deadline for conversion of the healthcare coding system from ICD-9 to ICD-10, may give a false sense of relief, industry observers say.

“The clock is ticking, and the timeline is not all that long,” said Mark Williams, director at PricewaterhouseCoopers.

Some payers have begun strategic planning, but a lot of companies “still haven’t gotten out of the gate yet,” he said. At the very least, payers should begin remediation procedures sometime in 2010, and that’s after internal assessment and design and planning, he said.

Once remediation is complete, payers need to test the system enterprise-wide and then test with business partners, Williams said.

With game-changing reforms anticipated, many payers have put ICD-10 conversion on the back burner, said Paul Keckley, executive director of the Deloitte Center for Health Solutions.

Those with plans see them as a vehicle to differentiate themselves in the market with new lines of business, or reposition themselves for acquisitions, he said. “People are being a bit more strategic,” Keckley said. “This is not just a system install problem.”

With the granularity of diagnoses created by the exponential increase in number of codes, payers should treat the conversion process as an opportunity to transform how they manage care and reimburse, said Caroline Piselli, program manager for 3M. To create an overall strategy and understand the opportunities, C-level executives need to be fully engaged, she said. 

The Centers for Medicare and Medicaid Services (CMS) is developing a comprehensive national outreach and education strategy for ICD-10/5010 implementation, said Tony Trenkle, director of CMS’ Office of E-Health Standards and Services.

“We are particularly sensitive to the needs of small providers, who often lack in-house expertise to assist in implementation,” he said. “Our strategy will include partnering with our Medicare provider communications group, trade associations and others to ensure that small providers and others receive support through such avenues as tailored education.”

While some may argue that small payers are at a disadvantage, Williams pointed out that payers who have clean, well-run businesses with integrated, automated systems and well-documented processes will be in a better position for conversion.