ICD-10 Delay Doesn't Come Without Worries

The collective yawn heard a couple of weeks ago after the ICD-10 delay to 2014 was announced was probably a bunch of health plan IT types wondering what all the fuss was about.

In conversations with payers and in reviewing their ICD-10 websites it's evident that the major players—Aetna, Cigna, Humana, Kaiser, UnitedHealth, and WellPoint—have been prepping for ICD-10 implementation and were comfortable that they could meet the original 2013 deadline.

That has not necessarily been the case for hospitals and physicians, which anxiously awaited confirmation of the delay first proposed in April. The American Hospital Association supported a one-year delay based on the time and effort already invested by hospitals in meeting the original 2013 deadline. The American Medical Association had lobbied for a two-year delay until 2015 citing, among other concerns, the need for a cost/benefit analysis of the move to ICD-10.

Meanwhile, America's Health Insurance Plans was copasetic either way. The prevailing sentiment in the industry is that health insurers were already prepared to meet the original Oct. 1, 2013 deadline and the one-year delay is just icing on the cake in terms of testing, although there are concerns that the delay will increase costs and cause the project to lose momentum.

How did payers leave providers alone with their angst and anxiety about ICD-10 and move to a mellower place?

In all fairness, providers face the challenge of a more fragmented market. There are a lot more providers than health plans. It will be a lot tougher for providers, particularly the small ones, to get to a place where they are all compliant at the same time.

But health insurers also experienced their own "oh, wow" moment according to Ray Desrochers, executive vice president at HealthEdge, a software company that specializes in the payer market.

"Originally payers were thinking that they just needed to remediate their core system and call it a day," he explains, "then they realized the complexities of going from 17,000 ICD-9 codes to 155,000 ICD-10 codes. That was the health insurance industry's collective 'oh, wow' moment."

For their part, providers were already fretting about the looming deadline.

To their credit, Desrochers says "payers never took their foot off the gas like some provider organizations." He says payers just rolled along assuming that the ICD-10 deadline would be sorted out one way or the other.

Even with the delay, Aetna will maintain its current momentum in its ICD-10 work, according to Stacie Watson, who heads the insurer's ICD-10 program management office. That work includes remediation of impacted systems and vendor tools, as well as affected business processes and policies.

Aetna "will be fully ready to process ICD-10 claims by Oct. 1, 2014, with a strong commitment to begin testing in 2013 with those entities that are also ready," Watson said in an e-mail exchange with HealthLeadersMedia.

Desrochers says the ICD-10 delay provides health insurers with the opportunity to take  transformational steps to get ready for the new business models, which will include  value-based purchasing and accountable care organizations.

ICD-10 will provide more precision and information related to diagnoses and procedures that will help providers and insurers "make better determinations around what works and what doesn't," he says.

"What we're seeing in the industry is the attitude that if they have to remediate anyway then they might as well use the opportunity not just to change out, rebuild or modify their existing system for ICD-10, but to get ready for everything that's coming." He says payers would like providers to take similar steps.

Still, there are concerns that the delay will actually increase the cost of ICD-10 implementation for many insurers and that some momentum—at least among providers—will be lost.

In addressing the potential ICD-10 delay in June before a House committee, Humana's program manager for ICD-10, Sidney Hebert, explained that Humana began planning for ICD-10 in 2009 and would spend 58% of its projected ICD-10 implementation budget before the end of this year. He noted that the one-year delay in implementation would translate into an "11% to 15% increase in total expenditures" for Humana.

There is concern among payers that as the delay has played out, some providers may have slowed their ICD-10 progress and will need to restart those initiatives.

Health insurers want providers to get their ICD-10 mojo back on track. Watson says Aetna is strongly encouraging providers and vendors to continue to work toward compliance and to use the one-year extension to address any business or system challenges they may experience.

Watson understands the provider struggles. In e-mails she noted that one of the things that makes ICD-10 so complicated is the "pervasive nature of the changes. It's more than just updating one system or one form. For many providers, there are multiple systems, applications, forms, and processes that require remediation."

Software vendors, ostensibly in a position to help, can add another layer of complication because "there are interdependencies that need to be taken into account," she explained.

The deadline delay provides an opportunity for both internal and external testing "to ensure the remediation not only works technically, but that the outcomes of all processes are what would be expected," Watson wrote.

While there has been some aversion to the ICD-10 transition and the costs associated with the move, Desrochers says the confirmed delay in the ICD-10 process "is locked and loaded now. It won't change again. People just need to get on board."