Very soon, all health care facilities in the U.S. will need to abide by new codes to report medical diagnoses and inpatient procedures for everyone covered by the Health Insurance Portability Accountability Act (HIPAA). On October 1, 2014 ICD-9 with be replaced with ICD-10 code sets — the 10th revision of the International Classification of Diseases.

The transition has been met with trepidation, and according to new research from Medical Group Management Association (MGMA), the overall readiness of the industry to meet the compliance deadline continues to be slow. DOTmed News spoke with MGMA president, Dr. Susan L. Turney, to learn more about what's happening with this important transition.

DMN: Why should we be paying close attention to ICD-10 right now with it over a year away?
ST: ICD-10 is arguably one of the most complex and expensive transitions the health care industry has faced in decades. There are a large number of stakeholders involved, yet only some of them are required to make this change under the law. Physician practices are working with a wide array of trading partners for assistance as they implement this new code set. As the previous HIPAA implementations have shown, there never seems to be sufficient time to make the required software upgrades, train staff, internally test systems and workflow, and work with external trading partners to establish and complete testing processes.

By conducting this research well in advance of the Oct. 1, 2014 compliance date, we seek to both establish a readiness benchmark that we can use as a foundation for additional research (allowing us to access industry improvement on an ongoing basis) and to signal to both government and the private sector areas of concern well in advance of the compliance date that will hopefully steer the allocation of outreach and educational resources.

DMN: Why did MGMA decide to conduct research on the industry's readiness for ICD-10? What did you find?
ST: We created the Legislative and Advocacy Response Network (LEARN) several years ago as an instrument to quickly and effectively measure and quantify responses from practice professionals to critical issues. We were very effective in communicating industry readiness levels in the run-up to the Jan. 1, 2012 compliance date for HIPAA 5010. Our data showed significant portions of the industry lagging behind and disruption to practice cash flow as a likely result. We aggressively publicized our findings and believe that they were at least partially responsible for the CMS decision to issue a six-month enforcement delay for 5010.

Key additional results of the current research include:

— Lack of response from vendors. More than 52 percent of respondents indicated that they had not heard from their practice management system vendor regarding when software changes would be available to the practice. Almost 50 percent had not heard from their EHR vendor.

— Internal software testing lags. Only 5.9 percent of respondents reported that internal software testing has begun or is complete with their practice management software vendor and 4.7 percent with their EHR vendor.

— External testing delays. Just 11.9 percent of respondents reported that external testing with their clearinghouse has started or is complete. Almost 60 percent reported that they have not even heard from their clearinghouse regarding a testing date. Only 8.6 percent have started or have completed testing with their major health plans, with a concerning 70 percent stating that they have not heard from their major health plans.

— Low confidence for a successful transition. Nearly 60 percent of respondents stated they are "slightly" or "not at all confident" that their major health plans will be ready to meet the Oct. 1, 2014, compliance date.

— Concern about changes to clinical documentation. Among a number of implementation concerns, 88 percent are concerned or very concerned about the expected changes to clinical documentation; 87.5 percent are concerned or very concerned about the loss of clinician productivity after implementation; and 81.1 percent of respondents indicated they are concerned or very concerned with the overall cost of switching to ICD-10.

DMN: Were the practices you surveyed all members of MGMA-ACMPE?
ST: A large majority are members, and some non-members may have responded.

DMN: Why do you think the transition to ICD-10 will be such a daunting task for the health care industry?
ST: Compared to the practice migration to the HIPAA 4010 and then the 5010 electronic transactions, for example, ICD-10 presents a set of unique and complex challenges. First, ICD-10 impacts both the clinical and administrative sides of the practice — requiring not only technical modifications to both practice management system (PM) and EHR software, but also potential modifications to the clinical documentation recorded by physicians and utilized by professional coders. Administrative and clinical staff will also require significant training, and workflow processes will need to be reviewed for the impact of ICD-10 and modified appropriately.

As I mentioned, practices cannot achieve ICD-10 success on their own. They must rely on their PM and EHR vendors for the necessary software and their clearinghouse and health plans to test. Clearinghouses were instrumental in facilitating practice implementation of HIPAA 5010 as they offered the service of converting a 4010 transaction to the new 5010. However, with ICD-10, clearinghouses have much less ability to assist practices. First of all, some 20 percent of practices are still on the 4010 version of the claim, and that version does not accommodate ICD-10 codes. Also, we do not believe that clearinghouses will be able to convert an ICD-9 code to ICD-10 on their own as that would require access to the full clinical documentation.

Further, the cost of adopting this new code set will be itself daunting. Only about a third of our research respondents indicated that their vendor would cover the cost of the PM and EHR software upgrade/replacement. For the average 10-physician practice that must cover the expense of these upgrades/replacements themselves, the research indicates that the cost will be $201,690. Add to this the expense associated with project management efforts, code selection software, superbill redesign, staff training, and the reworking and resubmitting of denied claims. Compounding the angst of this transition, there is the unknown impact of decreased coder and clinician productivity following the compliance date.

DMN: Why do you think readiness has been slow?
ST: There are a number of factors contributing to a slowed implementation of ICD-10. Trading partners such as vendors, clearinghouses and health plans have been focused on numerous other federal and private sector initiatives, including Stage 1 and 2 of the Meaningful Use EHR Incentive Program, the Affordable care Act-mandated administrative simplification requirements, such as operating rules, national health plan identifier and the electronic funds transfer transaction, and health insurance exchanges.

Uncertainty undoubtedly also plays a role. ICD-10 is perhaps the only HIPAA standard that many physicians have actively opposed. We assert that the government has not taken the critical steps necessary to build the case for adoption — steps such as completion of an accurate ROI assessment, identification of the pre- and post-implementation costs for practices, and the undertaking of a comprehensive pilot.

In addition, there is currently legislation in both the House and Senate calling for the repeal of ICD-10 — further indication that key constituencies have not been persuaded that the process of implementing ICD-10 adopted by CMS is appropriate. In our industry, uncertainty, coupled with multiple competing priorities, can lead to inaction.

DMN: What advice would you give to those working to prepare?
ST: Our Association has been aggressively educating our members on how best to move forward with ICD-10. We are encouraging practices to adopt a step-by-step implementation approach, starting with the creation of an implementation "team" with both administrative and clinical staff involvement. An internal review of how the code set will impact the practice should be the next step and included there would be the identification of all computer systems impacted by ICD-10 and staff training requirements. Outreach to these vendors should then be conducted and an upgrade/replacement/training timeline established. Creation of a budget to present to senior management is also a critical step. Review of current clinical documentation must also be completed — either as an internal process of assigning ICD-10 codes to previously adjudicated claims or dual coding of current claims. Outreach to external trading partners is a critical next step as is the identification of testing protocols and dates for when claims can be submitted for testing. Establishment of a comprehensive contingency plan is also a very likely and necessary step for many practices.

DMN: Anything else you'd like to add?
ST: Our research results highlight an industry that is lagging behind in terms of readiness. We believe that end-to-end testing is a critical step to minimize the chance for disruption of claims. However, CMS just announced that they do not plan to externally test with providers. We believe that is a mistake on the part of the government and have urged them to reconsider this policy. In addition, we are concerned that some software vendors have yet to communicate their upgrade/replacement plans to practices and have called on these vendors to immediately share with their practice clients their plans to upgrade or replace software, on clearinghouses to communicate their testing plans and ICD-10 options, and on health plans to publicly release their payment policies and testing schedules.

We will continue to monitor the readiness levels of our member practices and their critical trading partners, and communicate our findings, concerns and recommendations directly to the government.