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ICD-10 Readiness Lags

March 6, 2014
FROM:      ACA International
           ICD-10 Readiness Lags

With the Oct. 1, 2014, ICD-10 transition date approaching, many in the health care industry have not yet adequately prepared for the new coding system.

Health care payers and providers are significantly behind on preparing to use a new coding system required by the Centers for Medicare and Medicaid Services’ Oct. 1 deadline, according to KPMG, a U.S. audit, tax and advisory firm.

The new system, ICD-10, is a replacement for ICD-9, which is used to document medical diagnoses and inpatient procedures. All entities covered by HIPAA must implement the new system by Oct. 1. It will create consistency between the health care system in the United States and other industrialized countries.

Codes in the ICD-10 allow for more specific patient diagnoses and the system also makes it easier if new codes need to be added. KPMG completed a poll to gauge preparedness for the change in the health care industry and found that 74 percent of participants had not, or had no plans to conduct testing involving outside entities such as health plans, providers and trading entities.

Additionally, 50 percent of the participants said they have not reviewed the impact of the coding update on their cash flow.

“As Oct. 1 inches closer, health care organizations have their work cut out to properly absorb the impact that the new coding will have on their businesses,” said Wayne Cafran, an advisory principal with KPMG. “With estimates by those who did measure the impact tallying anywhere from $1 million to more than $15 million, health care organizations are in for a rude awakening when they finally realize what (impact) the new standards will have on their bottom lines,” he said.

Concerned about the Oct. 1 implementation of ICD-10, the Healthcare Finance Management Association has also expressed concern (http://www.hfma.org/Content.aspx?id=21278) about the need for additional testing.

A survey by Workgroup for Electronic Data Interchange (http://www.wedi.org/docs/news/icd-10-survey-results-summary.pdf?sfvrsn=0) provides more data about the health care industry’s preparation for ICD-10.

© 2014 ACA International. All rights reserved. Reprinted with permission from ACA International. www.acainternational.org

Guaranteed cash flow during transition.