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It’s 2015, and ICD-10 is coming…again. Some of us have made good use of an extra year to prepare, but for many smaller hospitals and physician practices, it appears that the procrastination caused by the last delay (from 2013 to 2014) is being repeated.

However, 2015 will not be a repeat of 2014. Why? In 2014, there was a great unknown: the Centers for Medicare & Medicaid Services (CMS) had not done end-to-end testing with providers and could not confirm industry readiness to move forward. This year is different.

CMS has scheduled three end-to-end testing periods for 2015. The first round of test claims will be submitted January 26-30, 2015, and by mid-February, preliminary results of that testing will be available. Those results – from real tests of real ICD-10-coded claims – will change everything, including the trajectory of ICD-10 in 2015. If the testing goes poorly, CMS will have no choice but to institute another delay. More likely, however, is that testing will go smoothly, especially given the large amounts of data CMS has gathered from providers during acknowledgment testing and the extensive amount of internal testing already completed.

Keeping that in mind, here are our predictions for ICD-10 in 2015.

There will be some healthcare industry panic in February and March as it becomes clearer that the move from the antiquated ICD-9 system to the world-standard ICD-10 won’t be delayed again.

No doubt there will also be lobbying efforts by the American Medical Association (AMA) and special interest groups to create another delay with the renewal of the sustainable growth rate (SGR) patch at the end of March. Last March’s patch vote was one of a long series of quick “solutions” Congress has enacted every year since 2003 to delay major Medicare pay cuts for physicians under the SGR formula. Last year’s patch included a surprise one-year delay of the ICD-10 deadline to Oct. 1, 2015.

The lack of end-to-end ICD-10 testing performed by CMS last year played right into the anti-ICD-10 lobbyists’ hands. Successful testing results this year will create momentum that will effectively derail any additional potential attempts to halt ICD-10, especially because there are plenty of strong pro-ICD-10 interest groups currently at work. Significantly, the latter group includes the powerful health insurance industry as well as the federal government. 

Ultimately, ICD-10 will go off as scheduled in October 2015, accompanied by much gnashing of teeth and predictions of doom and gloom, especially among smaller providers, who have been the slowest to get on the ICD-10 bandwagon. Larger hospitals and multi-entity healthcare systems, most of which have invested millions in the conversion to ICD-10, will be much happier as they finally see a return on their investments.   

Also among the gloomier set, hospitals and physician practices that relaxed implementation efforts after the last delay will have no choice but to complete preparations quickly. The least prepared group continues to be physician practices. In many practices, particularly in primary care, physicians perform their own coding, and some will plan to “meet” ICD-10 demands by using a very limited subset of codes. This practice already happens today with ICD-9, whereas many physicians don’t worry much about fourth and fifth digits when coding, but it will happen even more frequently in ICD-10. 

Within hospitals, while most ICD-10 project teams have addressed the potential issues of reduced coder productivity during the transition adequately, many will not have addressed the impacts on patient registration. Even a limited number of ICD-9 codes or otherwise unclear outpatient orders for lab and radiology testing will bog down productivity for at least a couple of months. Similarly, patient account teams will be handicapped temporarily while they relearn their protocols in the context of ICD-10 and while payors’ call centers become overloaded with related increased call volume. (Let us hope that the payors are planning for the latter.)

ICD-10 is designed to be revenue-neutral across the board, but there will be impacts, both positive and negative, on individual providers because of their particular case mixes. Many providers haven’t performed an analysis of their particular situation, and some will be unpleasantly surprised. One hospital we spoke with recently was dismayed to find that ICD-10 will have a significant negative impact on its revenue, as it handles a large number of bowel surgeries (which will be coded to a lower-weighted DRG when coded under ICD-10).

Revenue disruptions will occur, but most payors will be ready to receive ICD-10 claims. –It’s more than likely that some payors will have issues with specific code combinations that will take time (and appeals) to resolve. Hospitals will have an easier time, as a high percentage of their funds are typically concentrated in a handful of large payors, including Medicare and Medicaid, which presumably will have already tested and resolved most of their issues. Revenue disruptions should start becoming apparent by early November as ICD-10 coded charts make their way through the coding, submission, and adjudication processes.

For practices and hospitals that do significant business with liability insurance and worker’s compensation carriers, keeping ICD-9 and ICD-10 straight will be a challenge. These carriers don’t have to switch to ICD-10. For one large orthopedic practice we have worked with, which works with worker’s compensation carriers in three states, one state program is moving to ICD-10, another will stay with ICD-9, and the third state,  (which has multiple worker’s compensation carriers) is not mandating one or the other. This situation is a recipe for confusion, and another term for “confusion” in the healthcare revenue cycle world is “claims denials.”

Many hospitals will have significant reporting issues. Some of those changes will be the result of changes in coding, whereas others will be reporting artifacts and genuine errors in report remediation. At the very minimum, report writers, managers, and IT staff will spend more time analyzing data to verify information in each impacted report.

Ultimately, the industry will stabilize with ICD-10, but not overnight. Revenue impacts likely won’t work themselves out until 2016. And some impacts, like refining claims rejection and adjusting to audit rules to take advantage of the greater specificity in the ICD-10-coded world, will be ongoing efforts for the rest of the decade.

About the Author

As a co-founder of Phoenix Health Systems, D’Arcy has had leadership roles in the growth of the company. Currently, she leads overall corporate administration, marketing and industry relations, services development, human resources, and knowledge management. She has led various strategic initiatives, including the development of ICD-10 services, HIPAA-based security and privacy compliance tools, and online education programs.

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