Wednesday, August 10, 2011

Nearly Half of Leading Healthcare Organizations Are Not Yet Switching to ICD-10-CM

A report by HealthLeaders Media finds that nearly half of healthcare leaders have not yet even begun to prepare for the ICD-10-CM switch. Overwhelmed with competing priorities, hospitals and health plans have not started on ICD-10-CM despite a misguided belief that it will help with their quality improvement efforts (72% of respondents) and a real belief that it will negatively impact revenue for years to come (46% of respondents).

Healthcare reform and the electronic health record are higher priorities. Let's turn off the switch.

Tuesday, August 9, 2011

ICD-10-CM Prerequisite at Risk

A Medical Management Group Association (MGMA) survey finds that just over 45% of physicians have not begun the process to upgrade to a standard that is a prerequisite for the ICD-10-CM switch. The ICD-10-CM switch requires that doctors and health plans upgrade from a standard called '4010' to its successor, 5010.

The reason: 4010 arbitrarily limited the number of characters for diagnosis codes to the maximum contained in ICD-9-CM: 5. Now, ICD-10-CM has diagnosis codes that stretch to as many as 7 characters. So, before the U.S. can start using ICD-10-CM codes for payment and reimbursement purposes, it must first upgrade the standards for submitting insurance claims.

To be sure, 5010 has other changes intended to improve the standard as well. But also to be sure, ICD-10-CM is a non-starter without it.

So, now comes news that physicians are struggling with the prerequisite to ICD-10-CM, let alone ICD-10-CM itself.

The survey results also mention that the cost of the 5010 upgrade is $16,000 per physician. With approximately 660,000 physicians in the United States today, the cost of the 5010 upgrade is $10.56 billion.

However, the final rule (warning: PDF) that mandated the 5010 upgrade states that "... the new estimate of total cost for physicians and other providers segment to implement Version 5010 is between $544 million to $1,088 million."

Too low by a factor of 9.7!

And this cost dwarfs the rosy estimates of benefit: the final 5010 rule states that "...the new estimate for physician savings due to better standards is $1,392 million and operational savings due to increase in the use of auxiliary claim transactions are $4,443 million".

So the cost already is dwarfing the best-case scenario for benefit by a factor of two.

Given that similar problems exist already with the estimates of cost and benefit of ICD-10-CM, we could save countless healthcare dollars by aborting the switch. Now!