Hospitals are Ready, Health Plans Aren’t—Where Do You Stand on ICD-10?

Kathryn Mackenzie, for HealthLeaders Media, September 9, 2008

The government's proposed three-year timeline to replace the ICD-9-CM code sets, currently used to report healthcare diagnoses and procedures, with ICD-10-CM code sets is causing a stir among some in the medical community who say the switch will cost millions in additional IT and operational expenses.

Opponents say the October 2011 deadline put forward by the Department of Health and Human Services does not allow enough time for them to adequately implement and test the new codes. "This is simply not something you can rush into. It's far too complicated a transaction with the potential for a massive disruption to the healthcare industry," says Robert Tennant, senior policy advisor at Medical Group Management Association. The MGMA opposes the timeline, but not the switch to the more modern coding system.

Tennant points out that the transition comes at a time when the president and the secretary of Health and Human services are calling on providers to make greater use of health information technology, such as e-prescribing and electronic health records.

"Practices and others are going to have to spend money on updating these billing systems, money that could have been spent on HIT. It's got to be one or the other, there is not enough money to do everything," says Tennant.

Estimates vary widely about how much providers will have to spend to become compliant with the new coding system, but the general consensus is that it won't be cheap. A survey by the MGMA Legislative and Executive Advocacy Response Network reports that 95% of respondents in medical practices would have to purchase software upgrades for their practice management systems or buy all new software, and nearly 64% would have to buy code-selection software. The HHS puts the industry-wide cost at $1.64 billion, including $356 million in training costs, lost productivity costs of $572 million, and system change costs of $713 million.

Most healthcare providers agree that ICD-9-CM, which was developed 30 years ago, is outdated because of its limited ability to accommodate new procedures and diagnoses. ICD-9-CM contains only 17,000 codes, while the ICD-10-CM code sets contain more than 155,000 codes. And, more codes will certainly help hospitals increase reimbursement by allowing them to code for more diagnoses. The problem, say the MGMA, the American Medical Association, and a number of health plans including the Blue Cross and Blue Shield Association, is that there is no way the industry can effectively implement the new coding system in the time given.

"All we are asking is for the government to follow the recommendations of its own advisory body [the National Committee for Vital and Health Statistics]. The NCVHS letter called for the industry to move to ICD-10-CM, but it also raised a lot of questions about what the impact would be on providers and what the timing should be," says Tennant. If the NCVHS recommendations were followed and started now, the soonest ICD-10 could be completed is late 2013.

Of course, there are proponents to rapid adoption of the coding system. The American Hospital Association and the American Health Information Management Association have both announced their support of the proposed rule, saying ICD-9-CM is outdated and obsolete. "The adoption of ICD-10 is long overdue, and the replacement to ICD-9 has been discussed over the past 10 years," said Rick Pollack, AHA's executive vice president, in a statement.

While the controversy abounds, what should you be doing to prepare your practice for the 2011 deadline? First, do not put off preparing for the transition in the hope it will be delayed, said Sheri Poe Bernard, vice president of member relations at the American Academy of Professional Coders in a presentation discussing ICD-10-CM.

"There are many actions we can take now to mitigate the far-reaching effects of migration to ICD-10-CM," Bernard says. For example, she says, doctors should be trained now and given time to practice the new documentation before ICD-10 kicks in. "All areas of your practice will be affected. Early preparation is key," she says. Part of that preparation will be to gather information to assess your risk by talking to vendors and payers before the change becomes mandatory.

The bottom line: Start figuring out what your potential costs will be right now and don't wait to set up a timeline for getting your IT department ready because no matter which side wins the fight over when to make the switch to ICD-10-CM, it is going to happen.

Kathryn Mackenzie is technology editor of HealthLeaders magazine. She can be reached at
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