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Delay of ICD-10 Should Not Deter Preparation for Transition


4/3/14

Background
 
On March 31, 2014, the Senate passed the Protecting Access to Medicare Act of 2014, a one-year patch to the Sustainable Growth Rate (SGR) formula for physician payments. The current SGR was set to expire on March 31, 2014. The bill prevents a 24% reduction in Medicare payments to physicians. This bill also delays the transition to the International Classification of Diseases 10th Revision (ICD-10) until October 2015.
 
Issue
 
The transition to ICD-10 is inevitable, albeit delayed. The existing coding structure is antiquated and inflexible, raising many concerns from all healthcare stakeholders, primarily those tasked with supporting technology systems. Technology vendors continue to struggle with programmatic challenges in supporting both ICD-9 and ICD-10 classifications in parallel. This will be further exacerbated by the extension, particularly for vendors and providers that have expended significant time and resources to assemble teams, develop training programs, and invest in end-to-end testing. 
 
Physicians bear the biggest brunt with respect to the ICD-10 transition, which carries significant cost to implement and no clear definition of scope. The American Medical Association (AMA) indicates that small practices (up to three physicians) can expect implementation costs ranging from $56,639 to $226,105 and large practices (greater than 100 physicians) can see costs ranging from $2,017,151 to $8,018,364.
 
What Does CohnReznick Think?
The delay of ICD-10 raises many questions for entities impacted by the transition. Although providers are breathing a sigh of relief with the ICD-10 transition extension, readiness efforts to meet these requirements should not be deterred. Ensure that your transition team is in place, work closely with vendors and insurance payers to maintain transition momentum, and keep a watchful eye on CMS notifications on new implementation deadline dates and next steps. In addition, continue to train providers on ICD-10’s new coding scheme as this successful transition will be critical to uninterrupted cash flow from third party payers.

Contact
 
For more information, please contact Gil Bernhard, Partner, at 646-254-7479, Peter Epp, Partner, at 646-254-7411, or Richard Puzo, Partner and Healthcare Industry Practice Leader, at 973-364-6675.
 
For more information on CohnReznick’s Healthcare Industry Practice, visit our webpage.


This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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