ICD-10 Delay – HHS Proposes Extending Compliance Date for ICD-10 to October 1, 2014

The Department of Health and Human Services (HHS) recently announced a proposed rule that would delay the compliance date for the International Classification of Diseases, 10th Edition diagnosis and procedure codes (ICD-10) from October 1, 2013, to October  1, 2014.

Why the Delay?

According to HHS, three issues led it to propose the one-year delay:

1. The industry’s transition to Version 5010 (HHS’s infrastructure system for electronic claims) did not proceed as efficiently as expected, and HHS is concerned that the delays in implementing Version 5010 will negatively impact ICD-10 timelines. The industry’s successful transition to Version 5010 is a necessary precursor to ICD-10 adoption. Unfortunately, as the January 1, 2012, Version 5010 compliance date approached, a number of unexpected implementation problems emerged. In a move designed to provide the healthcare industry with sufficient time to complete its testing and software installation activities for Version 5010, HHS delayed theenforcement date for Version 5010 compliance to June 30, 2012.

2. Providers expressed concern that other statutory initiatives are stretching their resources. “Since the publication of the ICD-10 and Modifications final rules, a number of other statutory initiatives were enacted, [thus] requiring health care provider compliance and reporting. Providers are concerned about their ability to expend limited resources to implement and participate in . . . initiatives that all have similar compliance timeframes,” according to the proposed rule. In addition to ICD-10, providers are tackling the requirements of the Medicare and Medicaid Electronic Health Record Incentives Programs and the eRx Incentive Program, along with the additional Health Insurance Portability and Accountability Act requirements imposed by the Affordable Care Act.

3. Surveys and polls indicated a lack of readiness for the ICD-10 transition. HHS stated that “it is crucial that all segments of the health care industry transition to ICD-10 at the same time because the failure of any one industry segment to successfully implement ICD-10 has the potential to affect all other industry segments. Ultimately, such failure could result in returned claims and provider payment delays that disrupt provider operations and negatively impact patient access to care.” It became evident to HHS in early 2012 that certain sections of the industry would not be prepared for the 2013 compliance date. Based on ICD-10 readiness surveys conducted by the Center for Medicare & Medicaid Services, it is estimated that 12–26 percent of providers will not be ready for the October 1, 2013, compliance date.

What this Means to Providers?

It is important to note that this is a proposed rule, and it is subject to regulatory review. After the rule is published on April 17, 2012, a 30-day  comment period begins. Following the comment period, HHS will review all comments and will draft responses to be incorporated into the final rule. There is no reason to think that the proposed rule will not be finalized; however, we caution providers against diverting all resources away from ICD-10 implementation. Providers should stay the course and use the extra time to finalize impact analyses, conduct testing, and deal with unanticipated challenges.