HHS Finalizes ICD-10 Deadline Delay

The Department of Health and Human Services is making it official. It will delay for one year the implementation of ICD-10 code sets that classify medical diagnoses and procedures.

The final rule, announced Friday delays ICD-10 implementation to Oct. 1, 2014 from Oct. 1, 2013.

"We believe the change in the compliance date for ICD-10 gives covered healthcare providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition by all covered entities," HHS said.

Providers have anxiously awaited confirmation of the delay, which HHS 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.

In confirming the implementation delay, HHS noted the results of a recent survey that indicated that up to 25% of healthcare providers "believe they will not be ready for an Oct. 1, 2013 compliance date." HHS said concerns about provider readiness were confirmed in another readiness survey in which about 50% of the 2,140 provider respondents "did not know when they would complete their impact assessment of the ICD-10 transition."

According to the rule, compliance with ICD-10 "by all covered entities is essential to a smooth transition to the updated medical data code sets, as the failure of any one industry segment to achieve compliance would negatively affect all other industry segments and result in returned claims and provider payment delays."

Reaction to the delay is mixed. Rich Umbdenstock, president and CEO of the AHA, says the delay "will be especially beneficial to smaller hospitals as they modify their information systems and helpful to larger facilities to conduct additional testing with health plans."

Count the College of Healthcare Information Management Executives (CHIME) also in the pleased column. Richard A. Correll, the CHIME president and CEO, notes that a longer delay "would seriously disrupt ongoing efforts to convert to ICD-10...and significantly increase the costs of converting to ICD-10." The group asked HHS "to develop a clear path forward, with benchmarks, so that healthcare industry stakeholders can make the conversion in 2014."

Physicians, however, are generally not happy.

Susan Turney, MD, president and CEO of the Medical Group Management Association and the American College of Medical Practice Executives, cites concerns about the lack of due diligence in ensuring that the implementation of ICD-10 "will not create debilitating cash flow disruptions for physician practices."

She also notes a lack of confidence that critical trading partners, including Medicare and state Medicaid plans, will be ready in time to conduct testing well in advance of the October 2014 compliance date. "We urge CMS to significantly escalate its implementation efforts by pilot testing ICD-10, ensuring health plan, clearinghouse and vendor readiness, and developing comprehensive educational resources," she said.

The AMA statement expressed similar concerns. "The AMA recommended that CMS delay the move to ICD-10 by a minimum of two years," said Steven J. Stack, MD, board chair. "The move toward ICD-10 comes at a time when physicians are dealing with the implementation of multiple Medicare incentive and penalty programs. Implementing ICD-10 alone requires physicians and their office staff to contend with 68,000 codes—a five-fold increase from the current 13,000 codes. Physicians are also already trying to engage in new delivery and payment models. The implementation of ICD-10 will create more challenges for physicians when our Medicare system is broken and cannot provide adequate funding to cover the cost of these additional administrative burdens."

The ICD-10 delay is confirmed in a 208-page rule that also establishes a unique health plan identifier (HPID) for all insurers. The rule is one of a series of changes required by the Patient Protection and Affordable Care Act to cut red tape in the healthcare system. According to the press release announcing the HPID rule, the change will simplify the claims process by standardizing the identifier format.

"These new standards are a part of our efforts to help providers and health plans spend less time filling out paperwork and more time seeing their patients," HHS Secretary Kathleen Sebelius said in a press statement.

HPID's anticipated 10-year return on investment for the entire healthcare industry is expected to be between $1.3 billion and $6 billion," HHS said.

The rule is effective Nov. 5, 2012.

View HHS statement.
View final rule.

See Also:
The New ICD-10 Deadline
ICD-10 Proponents Cry Foul
ICD-10 Delay Doesn't Address Procedural Hurdles, Critics Say
Intelligence Report: ICD-10 Puts Revenue at Risk