ICD-10 delay could cost healthcare industry billions

A majority of respondents to a new survey from Edifecs, which develops technologies for regulatory compliance and data exchange, says an ICD-10 postponement would do little to improve readiness – but could have significant adverse effects.

Edifecs officials bill the survey as one of the first to evaluate industry reaction to the Department of Health & Human Services' announcement that it would consider delaying the ICD-10 implementation deadline for certain entities. Less than 48 hours after the HHS announcement, the poll was conducted among more than 50 senior healthcare professionals attending the 2012 ICD-10 Summit, a conference hosted by Edifecs.

[Also: ICD-10 a serious ‘pocketbook’ issue]

Among the findings: Nearly two-thirds of respondents (64 percent) believe a delay will not improve readiness, 76 percent believe a delay will harm other healthcare reform efforts, and 69 percent say a two-year delay would be either "potentially catastrophic" or "unrecoverable."

"The message we heard loud and clear from conference attendees and survey respondents was to keep moving while the industry awaits the final decision on the extended deadline and which entities will be affected," said Edifecs CEO Sunny Singh. "The survey results tell us that stopping or slowing down work is a very real outcome of a delay, and it could derail a healthcare organization's progress. The cost implications alone are worrisome."

With both payers and providers investing heavily for the ICD-10 switchover, cost was a chief concern. When asked about the impact of a one-year delay, nearly half of poll respondents said it would increase costs between 11 and 25 percent, and another 37 percent said their costs would be up to 50 percent. Edifecs estimates the cost of a one-year delay to be between 25 to 30 percent. Based on existing overall cost estimates for ICD-10 from multiple sources, officials estimate a year-long delay in ICD-10 could therefore cost the industry anywhere from $475 million to more than $4 billion.

[Also: Could the U.S. skip ICD-10 and leapfrog directly to ICD-11?]

Other findings from the survey include:

• Nearly two-thirds of respondents (64 percent) said a delay would not result in improved readiness, predicting instead that organizations will slow down implementation so  budget and personnel can be redeployed to other, more urgent initiatives. That's compared to 36 percent who said a delay would improve readiness; one potential benefit of a delay is more time for testing, but that assumes projects will not be slowed or stalled, officials noted.
• When asked what the preferred timeframe would be for a delayed compliance date, 85 percent of respondents said a shift in the compliance date should not exceed one year. A delay of longer than a year, they opined, would likely freeze budgets, slow down schedules or stop work altogether.
• More than half of respondents (59 percent) said the date should be moved out for all covered entities – as opposed to mandating different compliance dates for different types of entities. The main driver behind that overwhelming preference for a single compliance deadline appears to be the significant cost and effort needed for  the dual processing in ICD-9 and ICD-10 code sets for the same dates of service, said Edifecs officials.