Don't rush change to ICD-10 codes

The Centers for Medicare & Medicaid Services is in a great hurry to change how physicians record patient diagnoses and transmit them electronically. CMS figures that three years is all it will take for physicians and the rest of the health system to absorb a nearly tenfold increase in diagnostic codes, as well as adopt a new HIPAA form designed to make sure transmission of those codes to payers is secure.

CMS is figuring wrong, setting the stage for major implementation problems.

The first deadline comes April 1, 2010, and requires use of the new Health Insurance Portability and Accountability Act electronic transaction form. Eighteen months later, on Oct. 1, 2011, comes the deadline for using the new set of International Classification of Disease codes.

For years, the American Medical Association and others have argued for a reasonable ICD-10 implementation that leaves time for physician education, software vendor updates, coder training and payer testing. The AMA will continue that argument with a filing to the CMS by Oct. 21, the deadline for the agency's comment period on the proposed ICD-10 and HIPAA changes.

The AMA won't be the only organization saying more time is required. Even private-payer trade group America's Health Insurance Plans has said CMS should extend its deadline for ICD-10 implementation. While the AMA has no specific time frame, AHIP estimates plans will need at least until 2013.

The switch to ICD-10 is a massive administrative undertaking. ICD-9 has 17,000 codes for reporting patient diagnoses. ICD-10 has 155,000 codes.

The ICD-10 transition is in tandem with the rollout of the new HIPAA form, 5010, replacing the current 4010. CMS never pilot-tested the 5010 form, even though a Health and Human Services advisory committee said testing was a necessary step before moving ahead and could help avoid disrupting the payment system.

In the words of AMA Board of Trustees Chair Joseph M. Heyman, MD, making the changes without pilot-testing the form "boggles the mind."

Although CMS was in a hurry, it failed to hit the Bush administration's own deadline for issuing new regulations. A White House directive stated that, except in extraordinary circumstances, "regulations to be finalized in this [outgoing] administration should be proposed no later than June 1" so agencies have time for "necessary analysis, interagency consultation, robust public comment and a careful evaluation of and response to those comments."

CMS didn't issue its rules on ICD-10 and the new HIPAA form until Aug. 22. That provides a woefully inadequate five months for that "necessary analysis, interagency consultation, robust public comment and a careful evaluation of and response to those comments."

Assuming the regulations go through, the health system will be just as rushed to respond to CMS' changes. There is not enough time for the massive machine of our health care system to accommodate the physician education, software vendor updates, coder training and payer testing, along with whatever else is needed for a smooth transition.

CMS estimates that the transition will cost physicians a mere $138 million, or 0.4% of collective practice revenue. CMS says that's a small price for richer code sets that support full quality reporting, pay-for-performance and biosurveillance, and that any delay will cost the health system more in the long run.

But the AMA and others say that cost estimate will likely be exceeded, especially when practices lose cash flow as hitches and flaws are exposed. And as with implementation of electronic medical records, many of the benefits of the ICD update will flow, not to physicians, but to payers, researchers and others with an interest in collecting data.

The more pressing bottom line is this: CMS is underestimating the difficulty of the change. A 2011 deadline is asking too much of the health system, and especially of physicians. If the transition to ICD-10 is to be done right, it can't be rushed.