Next to Last Word (Maybe) Regarding SGR and ICD-10 Extensions

ICD-10 Implementation Delayed…Again?

clock stethoscope

Click here to take our brief, confidential survey and share with us how you think your practice or organization might be impacted by this postponement of ICD-10.

Approved by both the House and the Senate and signed into law by President Obama, the HR 4302 Bill – Protecting Access to Medicare Act of 2014, will implement another temporary one-year fix to the Sustainable Growth Rate (SGR) for Medicare payments. This Medicare payment band-aid, or “doc fix” as it’s commonly referred to, has been applied 17 times in the past 11 years to prevent Medicare payment cuts to healthcare providers. Buried in this bill in Section 212, is a brief statement that the “Department of Health and Human Services (HHS) cannot implement the ICD-10 code set until October 1, 2015”. This comes just a month after CMS administrator, Marilyn Tavenner, adamantly stated, “There are no more delays and the system will go live October 1.” This was during a keynote address at the Healthcare Information and Management Systems Society in late February.

ICD-10, which has been delayed several times, was scheduled to be implemented on October 1, 2014. Healthcare providers, hospitals, health plans, software companies, practice administrators, and certified coders all over the country have spent countless hours and dollars preparing for what was to be the last deadline to start utilizing this new diagnosis coding system. For them, this could mean lost momentum along with the lost time and money they have spent on their preparation efforts. It’s unclear now what those who have adequately prepared will be required to do next year, but those who have procrastinated or simply haven’t had the resources to prepare, are undoubtedly relieved that they have more time to get ready and test their systems.

Industry Repercussions

It is predicted that there will be immense financial ramifications to this postponement. According to AHIMA, CMS estimates that a one year delay could cost $1 billion to $6.6 billion, “which is approximately 10-30 percent of what has already been invested by providers, payers, vendors, and academic programs…” But it’s not just about the financial loss. The Coalition for ICD-10, which comprises representatives from the American Hospital Association and Blue Cross Blue Shield, sent a letter to Marilyn Tavenner urging CMS and government officials to move forward with the deadline. The letter stated, “…we are now in agreement that any further delay or deviation from the October 1, 2014 compliance date would be disruptive and costly for health care delivery innovation, payment reform, public health, and health care spending. By allowing for greater coding accuracy and specificity, ICD-10 is key to collecting the information needed to implement health care delivery innovations such as patient-centered medical homes and value-based purchasing. ICD-10 is the next generation coding system that will modernize and expand the capacity of public and private payers to keep pace with changes in medical practice and healthcare delivery. Thus, ICD-10 will provide higher quality information for measuring service quality, outcomes, safety, and efficiency.”

One thing is certain; there will be lots of unanswered questions about how this delay will impact healthcare providers and facilities, for both those who have prepared and those who weren’t ready. We’d like to know how UPAL Members and Business Partners feel they will be affected by this. Please take UPAL’s brief survey. Your answers will remain completely confidential and we will share our results with you next month. Click here to access the survey.

Other interesting facts to note:

  • According to an article in California Healthline, “since 2003, Congress has spent nearly $150 billion on short-term patches to stave off Medicare payment cuts scheduled under the SGR formula.”
  • A more permanent fix called the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 would have attempted to repeal the SGR and replace it with a 0.5% increase for 2014 through 2018. This legislation was developed by the Senate Finance Committee and the House Ways and Means and Energy Commerce committees and was endorsed by many professional organizations.
  • ICD-9-CM codes have been partially “frozen” for several years now. The last regular, annual updates to the ICD-9 code set were made in 2011 with only limited code updates in 2012 and 2013.
  • The American Academy of Professional Coders (AAPC) stated in their March 31st article ICD-10 Delay: Keep Calm and Code On “If you are ready for implementation, then we know this delay may be difficult; we will support you with both access extensions and refresher courses.”
  • ICD-10 has been used in Europe for 10 years. ICD-11 is currently being developed by the World Health Organization and is set to be released by 2017.