ICD-10 Final Rule Released, October 2015 Official Compliance Deadline

The US Department of Health and Human Services (HHS) announced Thursday that the compliance date for the industry transition to ICD-10-CM/PCS code set has been finalized. As expected, the implementation date for ICD-10 will be October 1, 2015, according to a news release issued by the Centers for Medicare and Medicaid Services (CMS).

According to the agency, the deadline will allow “providers, insurance companies and others in the health care industry time to ramp up their operations to ensure their systems and business processes are ready to go on Oct. 1, 2015.”

The announcement was part of a final rule posted to the Federal Register by CMS that detailed why the ICD-10 code set should be implemented on October 1, 2015.

On May 1, 2014, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule that set the new compliance date for October 1, 2015. The final rule issued Thursday features few changes from the interim final rule, but does officially finalize the compliance date and offers more explanation from CMS for why the ICD-10 implementation should occur in 2015. The final rule also outlines the cost implications of the code set implementation’s previous delays.

The CMS announcement in May came exactly one month after Congress enacted the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. No. 113-93), which unexpectedly delayed implementation of ICD-10 by an additional year. That law stated that the HHS “Secretary may not adopt ICD-10 prior to October 1, 2015.”

In a posting to the Federal Register, government officials explained why they chose a compliance date of October 1, 2015. They noted that they had considered delays of varying duration. Ultimately, however, CMS picked the same date AHIMA has advocated for—and which would minimize financial burdens to the industry.

“We concluded that a delay beyond one year would be significantly more costly and have a damaging impact on industry. For example, extending the delay beyond one year could render current ICD-10 system updates and releases obsolete, which would diminish the investments stakeholders have already made to prepare for the ICD-10 transition,” officials wrote.

“All segments of the health care industry have invested significant time and resources in financing, training, and implementing necessary changes to systems, workflow processes, and clinical documentation practices. Stakeholders would need to restart their system preparation and would not be able to leverage past system investments,” the statement said.

Officials broke down the estimated costs of a one year delay. For the financial impact to Medicare and Medicaid,  CMS used cost estimates from the 2012 ICD-10 delay final rule. The other estimates are based on projections of anticipated costs of a one-year delay in 2015.

  • Cost to commercial health plans–Low: $547 million; High: $2.786 billion; Mean: $1.667 billion.
  • Cost to Medicare–Low: $21 million; High: $32 million; Mean: $27 million.
  • Cost to State Medicaid Agencies–Low: $169 million; High: $182 million; Mean: $176 million.
  • Cost to Hospitals and Large Provider Organizations–Low: $422 million; High: $3.849 billion; Mean: $2.136 billion
  • Total costs–Low: $1.161 billion; High: $6.850 billion; Mean: $4.007 billion

The Federal Register posting also notes that a one-year delay could increase costs for covered entities by as much as 10 to 30 percent. Additionally, “A delay of longer than one year would slow or stop progress towards ICD-10 implementation, delay the efficiencies that can be achieved through ICD-10 implementation, and create wasteful spending,” the posting stated.

AHIMA CEO Lynne Thomas Gordon, MBA, RHIA, CAE, FACHE, FAHIMA, welcomed the confirmation of the finalized compliance date.

“As a long-time supporter of ICD-10, AHIMA is pleased that patients and other stakeholders will soon experience the benefits of a modern and robust coding system with greater specificity about diagnoses and procedures,” Gordon said.


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