WASHINGTON – The Centers for Medicare and Medicaid Services has its work cut out in transitioning to ICD-10. As the largest payer and the force driving the new code sets in the United States, CMS has a task at least as intimidating as anyone else when it comes to implementation.

“Given the extent to which the code set is built into many business and operating processes and systems, the size of CMS operations, and the complexity of its systems,” the challenges CMS faces are indeed formidable, according to a report published last week from the National Research Council, which CMS assigned to help it better understand how to modernize CMS’ own IT.

Challenges the National Research Council outlined are:

1. Distributed ownership and collaborative governance. CMS will have to coordinate an enterprisewide effort of this size across multiple independent divisions, units, projects, and systems in a timely and coordinated manner.
2. Program and system interdependencies. CMS must coordinate the interdependencies between discrete projects affected by ICD-10 and crosscutting themes related to ICD-10 affecting multiple programs and units – for example, having an enterprisewide crosswalk approach between ICD-9 and ICD-10.
3. Competing initiatives. In addition to ICD-10 – CMS and OESS specifically – is challenged with having to implement several other agency-wide initiatives and oversee national healthcare reform efforts that may detract from the ICD-10 transition.

Sound familiar? Almost every payer and provider faces that same heaping pile of changes, be they incentivized or merely unfunded mandates, namely HIPAA 5010 and ICD-10. Much like those other private and public health entities that must convert, ICD-10 also creates some opportunities for CMS.

NCR lists three of those as:

1. The chance to consider “phasing-out legacy systems” or functions, as CMS may find it more cost-effective to implement new IT than to remediate or upgrade systems and applications simply to comply with ICD-10.
2. The ability to leverage ICD-10’s greater granularity “to establish more effective processes and perform and execute more refined controls in areas such as quality, patient safety, population health management, and fraud and abuse.” NRC noted that these improved capabilities may prove “particularly valuable” as the new ACO model continues to expand.
3. The chance to use ICD-10 to form “more effective outcomes-based payment and reimbursement policies,” such as those under the Patient Protection and Affordable Care Act.

The National Research Council’s report, Strategies and Priorities for IT at CMS,is available for download on the National Academies Web site.

Tom Sullivan

Editor of Government Health IT

Follow Tom on Twitter @GovHITeditor