Payers see ICD-10 as opportunity to drive IT

By Molly Merrill
10:12 AM

According to a recent survey, health plans believe the transition to the ICD-10 diagnostic and procedure coding system presents an opportunity to drive their IT initiatives.

A 2009 survey commissioned by The TriZetto Group, Inc., a software and IT services firm based in Newport Beach, Calif., tracked payer transitions to ICD-10. The survey, the second commissioned by TriZetto, was conducted by The Gantry Group, LLC, a consulting and research firm. The first survey, conducted in October 2008, serves as a basis for comparison.

TriZetto's surveys show the commitment to use ICD-10 migration to drive additional IT system changes and achieve strategic advantage has grown since October, especially among health plans on both ends of the membership continuum - small and large memberships. The commitment rose from 31 percent to 48 percent among plans with fewer than 50,000 members, while it increased from 36 percent to 75 percent among payers with more than 8 million covered lives.

"The surveys prove what we've been hearing from customers," said Rob Scavo, senior vice president of core administration solutions. "Many of them plan to leverage ICD-10 to drive broader system and operational changes that improve their connectivity to providers, members and brokers, reduce costs and enhance clinical outcomes. In effect, they are using ICD-10 to power their IHM strategies."

The surveys reveal payers are not postponing ICD-10 preparation even though the federal government extended compliance deadlines to Jan. 1, 2012, for the ANSI x12 v.5010 HIPAA electronic transaction standards and Oct. 1, 2013, for the ICD-10 code set. Thirteen percent of health plans have moved from inaction to action on migration, according to two studies, while ICD-10 project starts have increased by 29 percent. The number of payers developing plans or putting plans into place has risen from 41 percent to 54 percent.

Sixty-three percent of health plans reported in the most recent TriZetto survey that the deadline extensions will either not affect their planning or merely slow the pace of adoption.

From the first to second study, payers increasingly said that the effort will be comparable to the HIPAA effort (from 14 percent in the first study to 24 percent in the second), while 26 percent of health plans continue to believe that ICD-10 will be a larger effort than HIPAA compliance. Health plans that believe ICD-10 will be a larger effort than Y2K readiness rose from 19 percent to 28 percent.

"As payers have begun planning ICD-10 implementations, they've become aware that the scope goes well beyond claims coding," Scavo said. "They're seeing that ICD-10 will impact all areas of health plan operations - from product development to revenue management, customer service, reimbursement management, finance and administration, care management, network management and risk management - and therefore their care management, provider network and constituent systems as well as core administration applications."

Scavo said payers will use ICD-10 as an opportunity to replace outdated core administration platforms to more quickly enable compliance and provide a foundation for integrated healthcare management. He said health plans that already have state-of-the-art systems likely will use ICD-10 migration to drive changes in their care and constituent applications to take better advantage of the intelligence the new coding structure provides.