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Should HHS delay ICD-10 penalty for two years?

'The reasonable thing would be to delay the penalty phase for two years as people transition'
By Tom Sullivan
09:05 AM
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US Capitol

Anyone hoping that the clock would keep ticking toward the Oct. 1, 2015 compliance deadline faster than Congress could say "ICD-10" might want to pay attention to the prodding some U.S. Senators gave Health and Human Services Secretary Sylvia Burwell last week.

"The reasonable thing would be to delay the penalty phase for two years as people transition," said Louisiana freshmen Republican Senator Bill Cassidy, MD, during a hearing about HHS' proposed 2016 budget.

Whereas Cassidy did not elaborate on what he meant by "penalty" the biggest threat to healthcare organizations that fail to comply with ICD-10 is non-payment of claims. Interpretation: Delaying the penalty phase would essentially mean that CMS continues accepting, processing and paying claims filed in ICD-9.

Citing estimates from The Centers for Medicare and Medicaid Services that denial rates will spike upward as much as 200 percent while days in accounts receivables double to 40 percent, Cassidy pointed to smaller providers already struggling with EHRs will soon face those payment disruptions, not because they’re doing it wrong “but because the system has changed.”

Burwell countered by saying that many large payers and providers are ready and waiting for ICD-10 and that HHS is working to provide technical assistance and training to those organizations that are not at this point prepared.

Industry readiness, however, has never been a simple matter. Not even close. The Workgroup for Electronic Data Interchange, in fact, earlier this month published the results of its seminal survey, which found that the latest ICD-10 delay actually had a negative impact on progress such that healthcare entities are further behind the recommended schedule than they were a year ago.

At the same time, Burwell is not alone in saying that the large payers and providers appear to be set for compliance on Oct 1, 2015. Kaveh Safavi, MD, head of Accenture’s global healthcare unit told Healthcare IT News at HIMSS15 that his firm’s clients "greatly benefitted from the delay" and feel "close enough to the finish line that now we just have to cross it."

The problem for payers and providers of any size that have yet to make much progress is that they are running out of time to conduct end-to-end claims testing – and that means it's almost impossible for anyone to confidently suggest that the transition will be smooth once the ICD-10 switch flips.

Bearing that in mind, should HHS consider Sen. Cassidy’s recommendation to delay the penalty phase? And, if so, is two years an appropriate duration? Comment below.

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