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The Waiting Game: Next Steps for ICD-10

by Michael Palantoni, senior manager, product innovation

The latest ICD-10 delay (signed into law in April), has demonstrated that Congress really can get things done — when it comes to legislating procrastination. The delay (not supported by CMS) was brought about by a single 45 word statement inserted into a much larger bill regarding the Medicare SGR payment policy. This deferment of action on ICD-10 leaves us with no clear next steps; the law states that the U.S. Department of Health and Human Services (HHS) may not adopt ICD-10 earlier than October 1, 2015, allowing a number of scenarios to play out (2015? 2016? Not at all?) The Centers for Medicare and Medicaid Services (CMS) has indicated they are targeting a 2015 ICD-10 transition date, and that a rule is forthcoming, but there’s no solid deadline so far, leaving an entire industry in regulatory purgatory. Where does that leave practices and providers attempting to manage this [theoretical] transition?

As we discussed with athenahealth clients at our annual User Conference last month, there are three major lessons we’ve learned from this delay for those leading change in their practices; insight that reinforces a clear strategy to manage ICD-10 effectively.

Lessons from the Delay

  1. ICD-10 is now not only a matter of policy, but also of politics
    Prior to April’s delay, ICD-10 policy was principally in the hands of policymakers at HHS and CMS. Because these organizations are executive branch entities, policy around ICD-10 was bound to the federal rule-making process, requiring periods of public comment and analysis for change, activities that make the ICD-10 transition relatively transparent. However, with this recent delay, we saw that ICD-10 could be used as a political bargaining chip, allowing for changes to ICD-10 policy as part of any legislation. As such, the path for the ICD-10 transition increases significantly in uncertainty – requiring a flexible and time-sensitive strategy, which we outline below.
  2. Co-sourcing regulatory change demands can greatly reduce costs
    As with other regulatory changes subject to legislative uncertainty, relying on a networked service provider to manage technology, operations, and process changes can greatly reduce costs to health care providers. Specific ally, the costs of development, testing, and deployment of updates for changes like ICD-10, can be taken on by the service provider, and not many times over by every health care entity.
  3. Agility is key
    Opportunity cost — if we spend time and money on X, we can’t accomplish Y — is a central concern for software and services organizations, and a principle focus of product managers. In the current environment, being able to reallocate people and time in the face of uncertainty is critical to effectively managing large regulatory disruptions like the ICD-10 delay, and avoid high opportunity costs. Agile approaches for product development allow for rapid change by breaking off work in incremental chunks and employing a process that not only allows for adapting to change, but expects it. This way opportunity costs can be reduced by not overinvesting in long term initiatives.

Where to Go from Here
With these lessons in mind, providers and practices can follow a clear path forward for managing the ICD-10 transition.

Resources should not be spent preparing for ICD-10 until there is a high confidence that a transition date has been set — otherwise the risk of doubling or tripling costs spent on training staff, testing systems, and readying processes remain. As people and systems are both likely to change — new resources are hired, systems are updated — preparing too far in advance could easily mean repeating ICD-10 work. In the interim, resources should be used to pursue initiatives that have tangible value like Meaningful Use Stage 2 and better care coordination.

However, there are pre-requisites for pivoting like this: using systems and services that take on the majority of the work change and share the same incentives as your organization. Costly activities with longer lead times, like system remediation and testing, should be handled by a services provider as part of their core service, without additional fees passed on to clients. With such systems and services in place, the work, cost, and time required to decelerate and reaccelerate an ICD-10 initiative is greatly reduced and allows for provider organizations to focus on the highest value work.

Once a deadline is finalized, your organization should bring ICD-10 back into focus within a timeframe that has a low risk of regulatory or legislative change. At athenahealth, we think that window is about 10 months out from the transition date; if the transition is finalized for October 1, 2015, providers should begin preparation on January 1, 2015. With this approach, you’ll have a higher probability of your resources being used wisely, and a reduced risk of waste.

If your current systems and processes pose limitations to such an approach, consider if investing in agile systems and operations ready for change may be worth more than readying current systems for a hypothetical transition date.

Finally, if your organization is properly prepared when the transition arrives — whenever it does arrive — remember to stay cool. Keep calm and bring ICD-10 on.

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