ICD-10's ten-year reign of fear
Shortly after the National Committee on Vital and Health Statistics (NCVHS) recommended that the United States adopt ICD-10, the Medical Group Management Association (MGMA) assembled a session on the code scheme for its annual conference. The last-minute addition was so late, in fact, that the MGMA did not have time to include it on the printed agenda, and the only available time slot was 7 a.m.
Yet the room was overflowing with attendees.
“You couldn’t get in. The line was out the door,” said Robert Tennant, senior policy advisor for the MGMA. “They were terrified.”
That day, nearly a decade before the dreaded compliance deadline, marked the beginning of what would become ICD-10’s reign of fear. And today, with two years remaining before the Oct. 1, 2013 compliance date, the mandate stands to incite more consternation than in all previous years combined.
“Even the mere mention of ICD-10 runs shivers up peoples’ spines,” said Bill Bernstein, chairman of the healthcare division at law firm Manatt, Phelps & Phillips, which works with states and providers on health IT and related public policy issues.
Whether most hospitals will even meet the mandate on time is “a hard question to answer,” said George Arges, senior director of the health data management group at the American Hospital Association (AHA). “One of our concerns right now is the fact that there are so many other overlapping IT initiatives that are also on the docket.”
More Than Fear Itself
Exactly what health IT professionals are afraid of constitutes a scroll of considerable length. But almost everyone asked seems to scare up the words “time,” “resources” and “money” without much thought.
The Department of Veterans Affairs, in a 2010 presentation, outlined the anticipated local impact of the ICD-10 mandate. The short list grows increasingly intense: quality and performance indicators, staff time for modifications, staff time for training, decreased productivity of coders and providers, potential for staff turnover and potential loss of revenue.
Cash flow disruption threatens chaos. Simply put, health entities that fail to comply by Oct. 1, 2013 will find their claims rejected straightaway.
“There is a significant risk that for the first three to six months of the transitions, there will be a real learning curve for providers to code correctly and for health plans to interpret the codes and process them correctly,” said Stanley Nachimson, co-chair of WEDI’s Timeline Initiative, a former senior technical advisor at the Center for Medicare & Medicaid Services and principal at Nachimson Advisors. “There is unpredictability in the revenue flow as the new codes are used to make payment decisions.”
Many of the same payers that will reject ICD-9 claims, meanwhile, may not fully comply with ICD-10 themselves – at least not on compliance day. Rather, they may crosswalk ICD-10 claims into ICD-9, process them internally, then spit ICD-10 back out to providers.
"I know that there's been some talk about people trying to use the general equivalence mappings, but those tools are to help build whatever system changes they need to make in peparation for exclusively using ICD-10," AHA's Arges said. “The idea that you can somehow crosswalk from ICD-10 back to ICD-9 or vice versa, I think, is the wrong message. That would be a problem.”
Tennant added that ICD-10 is not just a conundrum for his physician practice member base. “This is a major issue for payers. I don’t think they know how to get there,” he said. “Our members are just hoping it goes away.”
ICD-10, however, will not so easily be extinguished.
Strength In Numbers
Large health systems such as Kaiser Permanente and the Mayo Clinic will be able to manage ICD-10 compliance by the deadline, according to several experts. Smaller outfits, however, lack the resources, personnel, knowledge and money that the behemoths enjoy.
“A lot of small and rural hospitals, we’re talking 30- to 40-bed hospitals, they’re operating on razor-thin margins,” said Frank Clark, CIO of the Hospital Authority and Medical Center of South Carolina. “It’s amazing how razor-thin their margins are. It might seem they’re crying wolf but many of them are not. ICD-10 could cripple them.”
If healthcare IT shops faced only ICD- 10, the unfunded mandate would still be mighty intimidating. The aforementioned VA presentation, for instance, listed 58 packages – within the depart- ment’s VistA electronic health record system alone – that require remediation to comply with ICD-10.
Add the VA and Department of Defense to the list of entities for which failure is not an option, of course. Might as well include the likes of Johns Hopkins and Vanderbilt, too.
But some smaller hospitals, specialists and physician practices are “already going out of business because of the economic environment. They simply cannot afford ICD-10,” Tennant said.
Clark agreed: “Small hospitals – the bulk of the 5,500 hospitals across the country – ICD-10 is going to push them to align themselves with hospital organizations, because they cannot afford it.”
ICD-10, that is, along with meaningful use, building accountable care organizations, value-based purchasing, myriad reporting requirements, reductions in readmissions, state-level health information exchanges – all of which greedily demand and consume IT resources.
Unlike the unfunded ICD-10 mandate, however, a number of those promise financial incentives down the road. Despite that payoff, a mere 5 percent of rural hospitals will achieve meaning-ful use, largely because “the costs of compliance may be particularly high,” according to a report in the Journal of Rural Health’s Summer 2011 issue.
“What has to shift is all the pressure being placed on providers,” said Kim Lamb, executive director of the Oregon Health Network. “It cannot just be that ‘you-know-what rolls downhill’ and the providers are stuck cleaning that up. For the majority of our participants, that cost is just too much.”
What with overwhelming expenses in tight economic times, widespread consolidation is underway – and ICD-10 will only fuel that fire.
Small and rural physician practices are either being consumed by, or latching onto, larger regional health centers, if only to pay the bills. With the MGMA estimating a small practice will have to pony up $84,000 for ICD-10 alone, and other projections skyrocketing into the millions of dollars depending on provider size, it’s no wonder.
“This problem where doctors are getting rolled up into big practices, it’s happening right now. And they sit there earning a salary and being less productive, their pay is going to go down anyway, and so we’ll have a less enthusiastic physician workforce,” said John Graham, director of healthcare studies at the Pacific Research Institute.
For Graham, it’s a matter of patients’ choices. The smaller the provider community, the fewer the options patients have when it comes to healthcare. For Clark, of the Hospital Authority and Medical Center of South Carolina, and health entities of a similar ilk, such consolidation – by no means triggered by ICD-10 alone for an organization of that size – may be more a matter of survival.
“It scares us to the point we need to find a good partner,” Clark said of the overflowing pool of IT projects and current economic realities driving alliances. “Remember back in the late ‘80s and early ‘90s, when we had this consolidation wave coming across California and we had all these organizations partnering? Well, we’re going through that again.”
And not just in California.
Will ICD-10 be Worth It?
It’s a question that must be asked: Will the expense – in terms of time, manpower and money – someday pay off by improving the quality of care in America?
As long as the list of grievances runs, the collection of potential benefits – ways that ICD-10 and its seven-digits can bolster healthcare – carries on as well. The overarching advantages can be boiled into a reduction sauce: Higher-quality data of greater specificity for reporting, trends and analysis that will ultimately lead to better health outcomes for individuals and populations.
Much of the rest of the world has gone to ICD-10, and it’s high time the United States catches up. But for the rewards to fully materialize, every physician and provider has to code in ICD-10 and submit claims in ICD-10 to payers that are also in compliance with the new code sets.
“The advantages of the ICD-10 code sets will not be realized unless providers document thoroughly and bill with codes representing the services delivered and the patient’s clinical status,” said Pat Zenner, healthcare consultant at Milliman. “That will only occur when providers can realize ‘what’s in it for me.’”
CMS maintains steadfastly that Oct. 1, 2013 is a firm cutoff date on which the switch will flip to ICD-10, and holds itself up as a pilot project that will deliver on time. The agency, as recently as August, reiterated in a National Provider Conference Call that it “does not intend to delay Version 5010 or ICD-10 implementation,” and instead is “committed to meeting these regulatory compliance deadlines, and expects the industry to do as well.”
But rumors are swirling that some state-level Medicaid agencies – California, Illinois and Pennsylvania among them, according to Arges – won’t make the deadline. “We’re very concerned right now with some of the state Medicaid programs and where they might be in terms of readiness for ICD-10, and that is a problem because what we don’t want to happen is to force providers into dual reporting, to code in ICD-9 for some Medicaid plans and code in ICD-10 for everybody else,” Arges said. “That is the worst of all worlds because it adds to the inefficiency and it penalizes people for making the steps they’re taking today to get ready for ICD-10.”
Even with thorough planning, anticipating all the changes ICD-10 will bring is near impossible, if only because there is no way to accurately predict how providers will document and use the code set, Zenner said. “It is important to realize where the level of uncertainty is greatest, and build protections to help mitigate the impact of the unknown,” she cautioned.
Indeed, such uncertainty is why so many health experts are concerned that the federal government has not conducted a satisfactory test pilot to blaze the trail, look back and guide the rest of the industry in the right direction.
“We have a big mess on our hands and there’s no doubt there will be a heck of a lot of money spent on IT, so a lot of the folks at Cisco, IBM or Microsoft, there’s going to be a lot of money for them to make,” Graham said. “Whether it will be productive to the healthcare system, well, that’s a completely different question.”
It’s also a question that won’t likely be answered anytime soon. Whether ICD-10 wreaks havoc on healthcare or ultimately proves its worth may take years to unfold.
“Some organizations structure their ICD-10 implementation efforts to end on Oct. 1, 2013 or shortly thereafter, but the real opportunities with ICD-10 will come in the post-compliance period,” Zenner said. “Organizations need to plan for how they will evaluate these programs during the transition period – which, from a data perspective, will last several years."
And so the fire that began as early as 2004 will burn fierce and hot into 2014, and after.