News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Good News for Labs: HHS Delays Implementation Deadline for ICD-10 to 2013, Version 4010/4010A1

Pathologists and lab directors concerned about training staff to implement the new ICD-10 code sets can relax-but only just a bit! The federal Department of Health & Human Services (DHHS) has pushed back the compliance deadline for implementing the International Classification of Diseases, 10th Revision (ICD-10) code sets. The new implementation deadline of October 1, 2013; replaces the existing deadline of October 1, 2011.

As it announced this extension in implementation of ICD-10 on January 15, HHS also set a date of January 1, 2012, for implementing the so-called X12 standard, Version 5010, for certain electronic health care transactions. Version 5010 is an important prerequisite to adopting ICD-10 and includes updated standards for claims, remittance advice, eligibility inquiries, referral authorization, and other administrative transactions. Version 5010 accommodates the ICD-10 code sets, which are not supported by Version 4010/4010A1, the current X12 standard, HHS said.

These two implementation dates give labs additional time to prepare and train for using the new codes. Labs will find the implementation of ICD-10 to be a costly process, in part because ICD-10 uses 155,000 seven-digit codes, compared with the existing 17,000 codes in ICD0-9. Bloomberg news reported on January 14 that the new codes will be a “nightmare” for healthcare providers.

In a report last year, Nachimson Advisors, LLC, estimated that every provider will incur conversion costs in at least six ways. Organizations representing physicians and laboratories, including the American Medical Association and the American Clinical Laboratory Association (ACLA)  commissioned the report, which projected the ICD-10 implementation costs for small, medium, and large physician groups.

The Nachimson Report calculated that the typical small group of three physicians would incur costs of $83,290 to comply with ICD-10. A typical medium-sized group of 10 physicians would spend $285,195, and a typical large physician practice of 100 providers would spend $2.7 million. (See “ICD-10 Conversion Costs Underestimated by HHS,” The Dark Report, Oct. 20, 2008.) These costs include expenses for:

1) education;

2) process analysis;

3) changes to superbills;

4) information technology;

5) documentation; and,

6) cash flow disruption

Conversion costs will be even higher for labs. That’s because labs must fund extensive changes in their information systems. Labs will also need to train not only staff, but also referring physicians. One large national lab estimated that it will spend $40 million to convert to ICD-10.

Armed with the knowledge about these high costs to implement ICD-10 and train referring physicians on the new codes, physician groups and ACLA have lobbied Congress to order HHS to delay implementation. HHS received more than 3,000 comments on the ICD-10 proposal, said Kerry Weems, acting administrator of the federal Centers for Medicare & Medicaid Services (CMS).

“A number of commenters asked for a delay in the compliance dates for both ICD-10 and Version 5010, citing implementation costs, the need to train health care personnel, and to assure ample time for testing between trading partners,” noted Weems. “HHS recognized these concerns and the final rules delay the implementation dates between the proposed and final rules by 21 months for the 5010 standards, and by 24 months for the ICD-10 codes.”

Medical laboratories and pathology group practices should already have a strategy in lace for handling the transition to ICD-10 codes. This two-year extension may be welcome today, but the United States is a full two decades behind the rest of the world in its use of ICD-10 codes. So further delays in ICD-10 implementation beyond 2013 should not be expected.

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Not Much Progress for E-Prescribing in the U.S.

Fewer than 10% of U.S. physicians prescribe drugs electronically, according to The Wall Street Journal. Furthermore, only 35 million of the 3.6 billion prescriptions dispensed by U.S. retail pharmacies are sent electronically. One factor discouraging wider acceptance of electronic prescribing is the resistance of older physicians to any change their long-established habits. By contrast, young physicians leaving medical school are fast to adopt e-prescribing when it is available in general practice settings.

There are many advantages to electronic prescriptions. Probably the most significant benefit is prevention of medication errors. The Institute of Medicine of the National Academies reports that more than 1.5 million times per year an error in medication leads to patient injury in the U.S. Another major-and oft-overlooked-feature of electronic prescribing is that many electronic systems are capable of identifying generic substitutes for brand name drugs. That saves patients money. Blue Cross and Blue Shield of Massachusetts reports that members who receive electronic prescriptions save, on average, about $250 per year on maintenance medications. Some electronic prescription software is even capable of choosing drugs that comply with a patient’s particular type of insurance.

As a way to motivate doctors to make the switch to electronic prescriptions, some private insurers offer financial incentives and subsidies to help with the cost of this technology. State and national programs are available to ease the technology and implementation costs of the transition, thus lowering the cost for doctors to adopt e-prescribing. In Ohio, WellPoint, Inc. pays 1% above the regular fee schedule to physicians who prescribe electronically. In the Northeast, WellPoint will pay as much as 6% above the regular fee schedule to physicians who use electronic prescriptions to achieve certain performance metrics.

About 70% of pharmacies-including all major chains-are already connected and capable of accepting electronic prescriptions. Experts say that it will soon be common for physicians to use smart phones to transmit prescriptions live from a patient’s room. Laboratories should take note of this slow, but forward progress toward e-prescribing. That’s because, as more physicians begin actively using an e-prescription service, they will want direct electronic access to lab test data.

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