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ICD-10 delay: How should your organization respond?

Ready to go, on track or running late - the delay has significant consequences for all providers and payers.

Overview

The Department of Health and Human Services previously stipulated that organizations be ready for the new ICD-10 codes by October 1 2014. Now implementation has been pushed back to October 1 2015 at the earliest. This is a welcome reprieve for some organizations as the transition requires them to replace some 14,000 codes with around 68,000 new ones. On the other hand, those organizations already prepared for ICD-10 will see this delay as an inconvenience.

While ICD-10 conversion is a complex, resource-intensive process, it can be deliver greater benefits than maintaining compliance. In fact, Accenture Health believes that tackling ICD-10 with a proactive and strategic mindset will help better position an organization to achieve significant revenue cycle and other operational improvements. However, whether organizations are aiming for minimum compliance or taking this more strategic approach, all healthcare organizations now need to consider how to respond to the delay.

Background

Converting to ICD-10 can increase coding accuracy, optimize efficiency and reduce costs. Compliance with ICD-10 can also help improve core business processes around scheduling and registration, clinical care and quality improvement, post-hospital care, collection management and public reporting. Ultimately, hospitals, health systems and other providers who convert to the new codes are better positioned to improve portfolio management, redesign clinical and administrative operations, improve physicians’ clinical documentation, increase loyalty among patients and providers, enhance integration with payers and providers. As if that were not motivation enough, failure to convert to ICD-10 can lead to lead to stiff fiscal and reporting consequences.

Although the shift has been in the pipeline for many years, some providers and payers are closer to preparedness than others. All organizations will at least want to treat the ICD-10 delay as a trigger for a review of their current readiness – the results of such reviews will in large part determine their response.

Analysis

The shift to ICD-10 is not just about coding. Organizations will need to create whole new workflows, re-engineer processes and deploy new database systems capable of supporting the new language of ICD-10. Providers that are still completing remediation and testing may intend to stick with their timelines, but will now know there is room for slippage. Any organizations that are significantly behind will see the delay as a reprieve. Since the Center for Medicare & Medicaid Services has yet to announce a new compliance date, some organizations expect further delays or even that CMS will now leapfrog straight to ICD-11. For some organizations however, the delay will increase the cost of the ICD-10 program and may cause difficulties with resource allocation, particularly since this is the second postponement in two years. For example, those organizations that have completed date-sensitive remediation may now face additional work.

Recommendations

Individual providers and payers need to develop a plan that meets their business needs while preparing for a new healthcare reform timeline. That plan is likely to fall within one of the following four options:

  • Stay the course - this is likely to be the preferred option of providers and payers that have completed remediation and are now in testing, and will allow that work to be finalized.
  • Slow down – by stretching the work still to be done over the course of the extension, there may be less need to increase budgets and resources.
  • Be pragmatic – some organizations may choose to stick to their original timelines where possible, accomplishing what is feasible and realistic this year while reserving a small budget to complete deferred work next year.
  • Stop – one option is to stop work completely for now, maintaining the budget until CMS sets a compliance date. This may be a favored option for organizations that have already completed remediation and external testing.