American Association for Clinical Chemistry
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April 2012 Clinical Laboratory News: The ICD-10 Delay

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April 2012: Volume 38, Number 4


The ICD-10 Delay: Could it Be Good News for Labs?
Providers Stung by Transition to HIPAA 5010 Standards Ready for a Reprieve

By Bill Malone

After intense pressure from physician groups and other healthcare providers, the Department of Health and Human Services (HHS) announced in February that the nation’s transition to the ICD-10 medical coding set would be delayed for a second time. The most recent deadline was October 1, 2013, a two-year deferral from the original 2011 date. In early March, the agency had yet to come forward with a new deadline. ICD-10 promised to introduce more than 100,000 new diagnostic and procedure codes, affecting everything from medical research to reimbursement (CLN 2011;37(6)).

Experts had warned labs that they could find themselves stuck between physicians and payers with ICD-10, especially since labs must rely on physicians to provide accurate diagnosis codes on test orders. Payers require accurate diagnosis codes before reimbursing labs, but physicians may pay little attention to diagnostic coding errors and oversights.

Physician groups stepped up the pressure this year on HHS to delay ICD-10, emphasizing that many medical practices face multiple deadlines related to health information technology (IT). The American Medical Association (AMA) urged that the ICD-10 transition be scrapped altogether because the EHR meaningful use, electronic prescribing, and physician quality reporting programs have all come online simultaneously.

Too Little, Too Late

Not all providers agree with AMA’s position. For example, the College of Healthcare Information Management Executives (CHIME), which represents chief information officers and other IT executives at hospitals, chided HHS Secretary Kathleen Sebelius for the delay, accusing HHS of thwarting the efforts of those providers who spent time and money preparing for ICD-10.

In a letter to Sebelius, CHIME said that a prolonged delay to ICD-10 implementation—or prolonged uncertainty about the timing and details of a delay—would create more problems than it would solve. “We encourage HHS to remain committed to ICD-10 as many organizations have already begun substantial investments that turn wasteful if abandoned for another path,” wrote CHIME CEO Richard Correll. “Providers have spent millions preparing for a deadline set over three years in advance…this announcement has created a level of uncertainty that threatens much of the progress already made by many hospitals and clinics across the country.”

George Hickman, executive vice president and chief information officer at Albany, New York-based Albany Medical Center, summed up the precarious situation many hospitals now face. “Everyone in the healthcare IT world is working against numerous deadlines,” Hickman said in a statement released by CHIME. “But it’s vitally important for those of us planning, budgeting and implementing these projects to know when that deadline is coming. This announcement has introduced an unnecessary level of uncertainty into our lives.”

A Reason to Wait

For labs, the story may look different still. Considering the government’s recent track record with other health IT standards, the ICD-10 delay may be more of a blessing for labs, according to Lâle White, executive chairman and CEO of XIFIN, a revenue cycle management solutions company that works with labs. Labs and other providers continue to be frustrated by a separate health IT standard called HIPAA Version 5010. Referred to as 5010, this standard is a prerequisite for using ICD-10 that helps data flow smoothly between providers and payers.

Considering how poorly the 5010 transition has progressed so far, White called the ICD-10 delay very good news. “I don’t think payers are remotely ready for ICD-10,” White said. “I think the Centers for Medicare and Medicaid Services (CMS) needs to review what went wrong with the 5010 conversion and make some demands on payers before any further conversions are done.”

On January 1, 2012, providers and other organizations were supposed to convert from the old 4010 standard to 5010, but most payers tested the new standard far too late, causing huge problems for providers, White said. As a standard used for transmitting electronic data, 5010 is an essential component of the virtual infrastructure required to process claims. “The volume of providers that had to test with each payer was so significant that many of them could not keep up with it,” White said. “In addition, there was no clean delineation for how the switch would happen. Some payers just switched over to 5010 exclusively, while other payers continue to offer dual processing and allow providers to go back to 4010 if things aren’t working out. Providers have been forced to figure out all of these inconsistencies on a payer-by-payer basis—not a small task considering there are hundreds of payers.” Several payers have still not finished testing their systems to detect problems, even after the deadline. In California, Medi-Cal testing will not begin until summer. As a result, labs and other providers must stand ready to submit claims using both 4010 and 5010.

Payers are simply not keeping up with the unforeseen problems with 5010 that advanced testing should have spotted, White said. In most cases, even after a lab has successfully completed testing, if a payer has trouble with a claim sent via 5010, the claim is rejected. Providers are getting hit with high numbers of claim rejections, and in turn have overwhelmed providers’ call centers. “One of the biggest problems is that the payers are so overwhelmed with phone calls that it’s taking them on average 14 days to respond,” White explained. “A lab will receive a front-end rejection and wait up to two weeks to get an answer back on what the underlying problem is that caused the claim to be rejected. Once they correct the issue, then they must resubmit the claim and hope nothing was missed so it doesn’t start all over.”

For labs, the key to surviving the 5010 transition is to follow-up on rejected claims immediately, White emphasized. Labs cannot afford to waste any time. “For a number of payers, the timeline for processing a claim is only 90 days,” White said. “The lab can only bill after performing the test, yet the date of service is the date the specimen was collected. So in some cases labs are submitting claims that appear to be up to a month old as far as the payer is concerned, yet the lab could not submit the claim until the service was completed.” Labs should research all available information disseminated by associations such as the Workgroup for Electronic Data Interchange and other industry publications and make sure they avoid common known errors, she added.

Before HHS moves ahead with ICD-10 or any other IT standards in healthcare, the agency should make payers accountable for preparing properly, White stressed. “As an industry, we would like to see a firm deadline from CMS for payers to convert and to certify that their conversion is trouble-free and that they are ready to test real data with payers,” she said. “Only after the payer certification date is confirmed should CMS establish an adequate testing and transition period for providers. CMS should establish a clear cut-over policy from ICD-9 to ICD-10 that is consistent across all payers. CMS should also establish a moratorium on diagnosis edits for the purposes of processing claims for a period of not less than three months to give providers a chance to correct coding errors before reimbursement is impacted.”