Proposed rule divulges new ICD-10 compliance date

As part of a proposed rule intended to simplify administrative transactions, the Department of Health & Human Services (HHS) announced that the compliance date for ICD-10 would move out one year to Oct. 1, 2014.

“Provider groups have expressed strong concern about their ability to meet the October 1, 2013 compliance date and the serious claims payment issues that might then ensue," HHS explained in the document. “Some providers' concerns about being able to meet the ICD-10 compliance date are based, in part, on difficulties they have had meeting HHS' compliance deadline for 5010 standards (Version 5010) for electronic health care transactions. We believe the change in the compliance date for ICD-10, as proposed in this rule, would give providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition by all industry segments.”

Backing up its argument in favor of delaying ICD-10, HHS cited a Centers for Medicare & Medicaid Services survey finding that one quarter of providers do not believe they will be ready by Oct. 1, 2013, and a recent WEDI readiness survey in which nearly 50 percent of the 2,140 providers responding did not know when they would complete their impact assessment.

HHS projects that ICD-10 will cost commercial and government health organizations between $650 million and $1.3 billion. However, the department anticipates that eventually health entities will make up the costs.

“By allowing more time to prepare, covered entities may be able to avoid costly obstacles that would otherwise emerge while in production,” HHS officials wrote. “Savings would come from the avoidance of costs that would occur as a consequence of significant numbers of providers being unprepared for the transition to ICD-10.”

During the Regulatory Impact Analysis (RIA) of this proposed rule, HHS determined a cost avoidance of between $3.6 billion and $8 billion – but acknowledged that “a 1-year delay of the ICD-10 compliance date would add 10 to 30 percent to the total cost that these entities have already spent or budgeted for the transition."

"Medicare and state Medicaid agencies have also reported estimates of costs of a change in the compliance date in recent informal polls,” HHS said. “Accordingly, the calculations in the RIA in this proposed rule demonstrate that a 1-year delay in the compliance date of ICD-10 would cost the entire health care industry approximately $1 billion to $6.5 billion.”

So healthcare entities now have a compliance deadline to work toward, and a slightly clearer picture of how far behind so many organizations are – but the industry is not any closer to understanding just how much money ICD-10 will really cost.

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