HHS Secretary Sebelius Confirms ICD-10 Deadline to be Postponed

From February 17th article posted on HealthLeaders Media

Health and Human Services Secretary Kathleen Sebelius said Thursday that the federal government will delay for an unspecified time the implementation date for the ICD-10 diagnostic and procedural coding system.

In a media release Thursday afternoon, Sebelius said federal officials were acting on providers’ concerns “about the administrative burdens they face in the years ahead. We are committing to work with the provider community to reexamine the pace at which HHS and the nation implement these important improvements to our health care system.”

HHS said it will “announce a new compliance date moving forward.”

ICD-10, which has been widely used in many other countries for years, was scheduled to replace ICD-9 in the United States in October 2011. During the 2008 public comment period providers asked for,  and got , a delay until Oct. 1, 2013.

For the last several months, the American Medical Association and other provider groups have pressed the Obama Administration and Congress for another delay. Many providers say they would like to see the deadline extended by another two years.

Sue Bowman, director of Coding Policy and Compliance at the American Health Information Management Association, told HealthLeaders Media that the delay “raises concerns.”

“The need to replace ICD-9 and go to a better coding system is still out there and hasn’t gone away,” Bowman says. “Actually, the need for high-quality healthcare data has gotten bigger now with meaningful use and payment reform and value-based purchasing and ACOs and all the other initiatives.”

Bowman says delaying implementation of ICD-10 will delay all of the other benefits of better healthcare data. “Until we have a better coding system we can’t really have a better healthcare system and achieve the goals of all of these other initiatives because they all pretty much come down to better data,” she says.

Bowman says implementing ICD-10 alongside other looming initiatives such as bundled payments, electronic medical records, and accountable care organizations makes sense because “they all relate together.”

“To separate them out and say ‘this piece doesn’t need to be done now’ is somewhat shortsighted,” she says. “They all link together and are interrelated in a way to promote value for healthcare both to improve the quality and costs. I don’t think we are going to see the anticipated benefits of all of the other initiatives unless we move to a better coding system.”

Tim Stettheimer, a Birmingham, AL-based Regional CIO for Ascension Health, told HealthLeaders Media that HHS’s earlier decision to delay by 90 days the implementation of the 5010 HIPAA transaction standards signaled that federal officials understand the burdens hospitals face.

“The fiscal intermediaries for (Centers for Medicare and Medicaid Services), many of them are not even ready for 5010 and we have seen the impact on hospital cash because of delays and payers being unable to accept those federally mandated transaction standards,” he says. “If we would have kept that ICD-10 implementation date in October it would have been considerably worse.”

Stettheimer says payers also are having problems with the ICD-10 deadline.

“Our healthcare reimbursement environment is different from any other country. It is so convoluted,” he says. “It is not tied to the diagnostic codes and if you change the codes you impact the whole reimbursement cycle within healthcare. It’s not that the healthcare providers are standing alone and not being ready. It is the payers, all the insurance companies, the fiscal intermediaries that handle the transactions for CMS, all of these organizations, most of them aren’t ready and would have a challenge getting ready.”

ICD-10 implementation is further complicated, Stettheimer says, because there is no way to ease into it. “It is a little bit like a light switch. You go from ICD-9 to ICD-10 in a day,” he says. “Because there is no way to not make it an instantaneous transition, the readiness and preparation and testing becomes that much more complex. We can’t put just one hospital or unit up on ICD-10 and see how it goes.”

Bowman says the “too-much-on-our-plate” excuse has been used before by providers to justify delays.

“There is never going to be a year when we don’t have a lot on our plates,” she says. “It is unfortunate that ICD-10 didn’t get initiated several years ago ahead of these other things to set the foundation and the groundwork for these other initiatives. Of course the further it is delayed, what is going to come up that year?”

AMA President Peter W. Carmel, MD, issued a statement Thursday thanking Sebelius for her “swift response.”

“The timing of the ICD-10 transition could not be worse for physicians as they are spending significant financial and administrative resources implementing electronic health records in their practices and trying to comply with multiple quality and health information technology programs that include penalties for noncompliance,” Carmel said. “Burdens on physician practices need to be reduced—not created—as the nation’s healthcare system undertakes significant payment and delivery reforms.”

Bowman says providers should use their extended deadline to continue preparations for ICD-10. “This is a delay. It is not a stoppage of ICD-10. It’s going to get done,” she says. “Whatever work you get done will be done, so our message is don’t stop the work you are doing.”