Today the Department of Health and Human Services (HHS) announced the final rule that changes the implementation deadline for the transition to ICD-10-CM and ICD-10-PCS from October 1, 2013 to October 1, 2014. This announcement was made in the context of the rule “Administrative Simplification: Adoption of a Standard for a Unique Health Plan Identifier; Addition to the National Provider Identifier Requirements; and a Change to the Compliance Date for the International Classification of Diseases, 10th Edition (ICD-10-CM and ICD-10-PCS) Medical Data Code Sets,” which adopts the standard for a national unique health plan identifier and establishes requirements for its implementation.

The Rationale

The rule notes that, “The change in the compliance date is intended to give covered healthcare providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition by all covered entities.” The rule is scheduled to be published in the Federal Register September 5; the display copy is currently available.

The rule describes HHS’s rationale for extending the implementation time frame. HHS concluded that delaying ICD-10-CM and ICD-10-PCS by one year does the least to disrupt existing implementation efforts and minimizes the costs of delay while affording the small provider community an additional year to become compliant. To assist entities in preparing to meet the new compliance date, HHS expects to increase education and outreach events and to work with industry on improvements to the overall standards implementation process.

Cost Savings Weighed

Commercial health plans, medium and large hospitals, and large physician practices are far along in their ICD-10 implementation planning, and therefore have devoted funds, resources, and staff to the effort, according to the rule. HHS estimates a one-year delay of the ICD-10-CM/PCS compliance date would add 10 to 30 percent to the total cost that these entities have already spent or budgeted for the transition – an additional cost to commercial entities of approximately $1 billion to $6.4 billion.

While a one-year delay in the compliance date of ICD-10-CM/PCS is expected to cost the entire healthcare industry approximately $1 billion to $6.6 billion, savings are anticipated from the avoidance of costs that would occur if significant numbers of providers were unprepared for the transition to ICD-10-CM/PCS on the original compliance date of October 1, 2013. HHS estimates that there would be a cost avoidance of approximately $3.6 billion to nearly $8 billion as a result of the avoidance of two costly consequences that could occur if the original compliance date of October 1, 2013 was retained:  (1) both healthcare providers and health plans could have to process healthcare claims manually in order for claims to be paid; and (2) small healthcare providers could have to take out loans or apply for lines of credit in order to continue to provide healthcare in the face of delayed payments.

Healthcare Community Can Move Forward

AHIMA has been urging the healthcare community to continue its implementation. With this announcement, AHIMA will continue its efforts to move implementation along, with a variety of programs and projects designed to assist those implementing ICD-10-CM or ICD-10-PCS. In a press release, AHIMA CEO Lynne Thomas Gordon, MBA, RHIA, FACHE, CAE, said, “ICD-10-CM/PCS implementation is inevitable, but today’s news gives the healthcare community the certainty and clarity it needs to move forward with implementation, testing, and training.” Thomas Gordon said, “We realize that a few are still  apprehensive about the implementation process, and that is why AHIMA remains committed to assisting the healthcare community with its transition to a new code set that will lead to improved patient care and reduced costs.”

AHIMA’s press release also noted that many academic institutions have set their curriculum for two-year, four-year and graduate programs to include the ICD-10-CM/PCS classifications, in an effort to properly prepare the next generation of HIM professionals. The HHS decision will now allow these academic programs to better plan just how ICD-10 will fit into their curriculum.

Further analysis, as well as announcements regarding programs and projects to help with implementation will be forthcoming from AHIMA.