Feb 11, 2009 | Coding, Billing, and Collections, Laboratory Pathology
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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Oct 28, 2008 | Laboratory Management and Operations, Laboratory Pathology
Federal officials underestimated the costs and time needed to implement the complex new codes for ICD-10, according to a new study released last week on October 14. As a result, laboratories and physician groups can expect to incur significantly higher costs to convert from the current International Classification of Diseases, Ninth Revision (ICD-9), to ICD-10.
The report by Nachimson Advisors, LLC, estimated that every provider will incur conversion costs in at least six ways. The report detailed and projected these costs for physician groups of small, medium, and large. It 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 $2,728,780. These costs include expenses for: 1) education; 2) process analysis; 3) changes to superbills; 4) information technology; 5) documentation; and, 6) cash flow disruption. Detailed coverage of the impending conversion to ICD0-10 is provided in the current issue of The Dark Report that was published on October 20, 2008.
One large laboratory with operations nationwide estimated that it will spend about $40 million to convert to ICD-10, including costs for information technology and staff education. This national lab further stated that implementation of ICD-10 code sets is projected to be twice as expensive as implementing the National Provider Identification (NPI) system that caused severe cash-flow problems for labs earlier this year.
A group of organizations representing physicians and laboratories, including the American Medical Association (AMA) and the American Clinical Laboratory Association (ACLA), commissioned the report. The deadline for compliance with ICD-10 is October 1, 2011, but physician trade groups are lobbying Congress to order the federal Department of Health and Human Services (HHS) to delay implementation. One reason the conversion is complicated is because ICD-10 uses 155,000 seven-digit codes, compared to the existing 17,000 codes in ICD0-9. Conversion will be particularly complex for laboratories because of the extensive system changes and the need to train not only staff, but the physicians who refer specimens to the laboratory.
“We have known this transition was going to be a big problem for a few years,” said ACLA President Alan Mertz. “The Nachimson study confirms that belief. ACLA has also consulted with our members and some of the larger labs tell us the costs for transitioning to the new codes and then the ongoing costs to use the new codes will be quite high. It will be costly for lab billing personnel to have to go back to the referring physicians to get the right diagnosis codes.”
Joseph M. Heyman, M.D., Board Chair of the AMA, said, “The AMA is deeply concerned that HHS is rushing head-first into the transition to a complex coding system without fully recognizing the impact on the health care system. Physicians, insurers, medical labs and others are raising the alarm that the costs, documentation and training required by ICD-10 will be significantly greater than HHS now recognizes.”
Medical laboratories and pathology group practices will need to develop a strategy for handling the transition from ICD-9 to ICD-10. Although providers are already pressuring federal health policymakers to delay the October 1, 2011 implementation date for ICD-10, there are many reasons why the United States must move to ICD-10. These reasons are detailed in current issue of The Dark Report.
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Aug 15, 2008 | Laboratory News, Laboratory Pathology
Reluctance of small and mid-sized physician practices to invest in electronic medical record (EMR) systems has been oft noted by Dark Daily. Now, Medicare is hoping to motivate these physician groups to adopt electronic health records (EHRs) with a new incentive program.
In an effort to jump-start physician adoption of EHR systems, the Centers for Medicare and Medicaid launched a five-year demonstration that offers small and mid-size physicians offices the opportunity to earn bonuses and receive a free EHR system.
Over the five years of the project, each doctor chosen for the demonstration could receive up to $58,000, with a limit of $290,000 per practice. The initiative will operate in Alabama; Delaware; Georgia; Louisiana; Maine; the Maryland/Washington, D.C., area; Oklahoma; and Virginia. Demonstration sites with communities in multi-county areas will also be in South Dakota; Jacksonville, Florida; Madison, Wisconsin; and Pittsburgh, Pennsylvania.
Participation alone will not guarantee the extra Medicare payments. CMS will randomly choose only half of the 200 practices recruited in each community to get EHR incentive payments The other half will serve as a control group and will get no bonuses, even if they use certified systems. Some physicians are frustrated about the prospect of being in the control group and not getting bonuses, but most accept the control group system as necessary.
According to coverage from American Medical News physician practices put into the control group will know from the outset. These groups will be required only to complete an annual survey of their EHR status. They will receive a small fee for participating in the survey. CMS wants to see how physician practices in the group progress in IT adoption, despite not receiving financial incentives from the Medicare program. No physicians in the control group will be required to use an EHR. Incentive payments will not be available to non-primary care doctors or to practices with more than 20 physicians.
“This demonstration is designed to show that streamlining health care management with electronic health records will reduce medical errors and improve quality of care for 3.6 million Americans,” stated Health and Human Services (HHS) Secretary Mike Leavitt. “By linking higher payment to use of EHRs to meet quality measures, we will encourage adoption of health information technology at the community level, where 60% of patients receive care. “We also anticipate that EHRs will produce significant savings for Medicare over time by improving quality of care. This is another step in our ongoing effort to become a smart purchaser of health care-paying for better care, rather than simply paying for more care.”
According to the HHS press release, the demonstration will be open to participation by up to 1,200 physician practices. Over a five-year period, the program will provide financial incentives to physician groups using certified EHRs to meet certain clinical quality measures. A bonus will be provided each year based on a physician group’s score on a standardized survey that assesses the specific EHR functions a group employs to support the delivery of care.
This EHR incentive program demonstrates the federal government’s resolve to push providers to eliminate paper charts and adopt electronic health records. Because this demonstration project will last five years, that fact alone indicates that health policy makers don’t expect to see rapid acceptance of EHRs by small and mid-sized physician groups in the near future.
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Jul 2, 2008 | Laboratory News, Laboratory Pathology
Public input will now be a part of physician evaluations overseen by the American Board of Medical Specialties (ABMS), the not-for-profit organization that oversees physician certification in the United States through its 24 Member Boards. In May, ABMS announced that it will incorporate public input into its physician evaluations. It is another step on the road to increased transparency for provider performance and a bigger role for patient and consumer input on the quality of healthcare services they receive. (more…)
Jun 30, 2008 | Laboratory News, Laboratory Pathology
Earlier today, Sonic Healthcare, Ltd. of Sydney, Australia, announced the acquisition of Clinical Laboratories of Hawaii LLC (CLH), based outside Honolulu in Ewa Beach, Hawaii.
Sonic disclosed that it will pay approximately US$121 million for CLH, which has annual revenues of about $110 million. According to Sonic, the purchase price represents a multiple of prospective EBITDA (earnings before interest, taxes, depreciation, and amortization) of 6.2. Both parties expect the acquisition to close by the end of third quarter, subject to anti-trust review by the federal government. (more…)
