Report: ICD-10 progress is 'sobering'

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With the October 2013 date for ICD-10 conversion looming on the horizon, a report on a HealthLeadersMedia survey suggested that health organizations are overwhelmed with competing priorities.

Eighty-four percent of respondents have started their ICD-10 projects, however, only 29 percent have moved beyond the assessment phase into implementation, the report found. Fifty-six percent are in the discovery/assessment stages, 26 percent reported being part way through implementation and 16 percent have not begun the transition process yet, according to the results. Forty-nine percent of organizations have yet to complete an initial ICD-10 readiness assessment and about 25 percent have not completed a financial assessment, the report showed.

According to Albert Oriol, vice president and CIO of Rady Children’s Hospital and Health Center in San Diego and lead advisor for the report, the results are “sobering.” Seventy-two percent of respondents believe ICD-10 will have a positive impact on quality in the long term, while 41 percent also believe ICD-10 will strain physician relationships.

“Sixty percent expect short-term cash flow to be negatively impacted both in terms of project resources and lost revenue,” Oriol wrote in the report’s foreword, adding that only one-third believe payors will be ready by October 2013.

While the majority (38 percent) stated they have no estimate yet on how much the projected cost to be ICD-10-ready will be, the next largest group of respondents (20 percent) felt that the projected cost would be less than $500,000.

When asked how “ICD-10-ready” respondents were in a variety of areas, the survey noted that:

  • Forty percent were ready for system readiness to accept ICD-10 codes;
  • Thirty-three percent were ready for payor readiness to accept ICD-10 codes;
  • Thirty-three percent were ready for coding staff training;
  • Twenty-four percent were ready for clinical documentation improvement training; and
  • Twenty-two percent were ready for physician documentation practices.

The analysis, written by Karen Minich-Pourshadi of HealthLeadersMedia, noted that 46 percent anticipate revenue losses from the transition. Among those who anticipate their organization to lose revenue, the majority of respondents (38 percent) weren’t sure how much revenue to anticipate losing. The next largest group of respondents (28 percent) responded anticipating losing 6-10 percent of their revenue. The top reason expected of those anticipating decreases in revenue was incomplete physician documentation (47 percent).

“[I]t may appear illogical that only 3 percent of healthcare leaders say they are already prepared to make this transition. However, the reason behind the unpreparedness is quite understandable: With mounting mandates and competing priorities, healthcare leaders say they cannot free up the manpower or financial resources,” wrote Minch-Pourshadi.

“Although there is no silver bullet for ICD-10 implementation, there may be a silver lining,” concluded Oriol. “Many organizations leveraged their Y2K investments to upgrade and replace outdated systems, which in turn helped them drive business innovation and operational efficiencies. Perhaps, not unlike Y2K, ICD-10 will also result in a positive return on the investment. However, one point is certain: If you haven’t started working on it, there is no time to waste.”

The online survey, “2011 ICD-10 Organizational Impact and Readiness Survey,” was conducted in April with a total of 242 respondents from a variety of settings including hospitals, health systems and health plans.