ICD-10 Compliance
On August 22, 2008, United States Department of Health and Human Services (HHS) announced the proposed adoption of ANSI X12 v. 5010 for Health Insurance Portability and Accountability Act (HIPAA) electronic transactions, the prerequisite for proposed adoption of International Classification of Diseases, 10th revision (ICD-10). This proposed regulation is expected to be larger in scope and cost than the implementation of HIPAA.
Why the Transition to ICD-10?
ICD-10 was developed in 1989 to combat the faults of ICD-9 including space limitations, workaround impacts, lack of detail, mortality reporting and biosurveillance. Today, the United States is the only G7 nation that continues to use ICD-9 for morbidity reporting. Most developed nations are using a clinical modification of ICD-10 for reimbursement and/or administrative purposes. HHS expects six benefits of moving to ICD-10:
- More accurate payments for new procedures
- Fewer improper claims
- Better understanding of new procedures
- Improved disease management
- Better understanding of health conditions and healthcare outcomes
- Consistent approach to disease monitoring and reporting world-wide
What are the major hurdles to overcome in implementing ICD-10 for Healthcare Payers?
- Cost: HHS estimates that changing the payer systems to ICD-10 may be the largest cost category. HHS estimates a cost of approximately $164.64 million with a range of $110 million minimum to $274 million maximum to change payers' IT systems.
- Timing: HHS has proposed a compliance date of January 1, 2012 for ANSI X12 v. 5010 and a date of October 1, 2013 for adopting ICD-10-CM and ICD-10-PCS code sets. HHS decided to move the date back to October 1, 2013 due to the complexity and time commitment required to successfully implement the ICD-10 code sets across all segments of the healthcare industry.
- Complexity: As stated above, many more code combinations are possible with ICD-10 than with ICD-9. It is estimated that fewer than 9% of the codes represent a one-to-one relationship. This complexity allows for more detailed diagnosis and procedures which will impact all aspects of a healthcare payer's core business functions.
Why Navigant?
Navigant Consulting's Healthcare Practice extends across the entire healthcare value chain with Payer, Provider, and Life Sciences practices. Further, we are an industry leader in helping healthcare companies anticipate the future and develop concrete action plans that deliver a positive return on investment (ROI).
Navigant Consulting has a proven methodology and toolkit for helping clients address regulatory changes and - most importantly - to derive strategic value from the ICD-10 effort. We bring to our clients a full scope of relevant expertise, including:
- Regulatory / Compliance
- Financial and Performance Improvement, including Claim Accuracy
- Medical and Administrative Cost Reduction
- Health Analytics and Informatics
- Reimbursement Methodologies
- Provider Network Development
- Information Technology Advancement
Navigant Consulting is uniquely qualified not only to provide guidance on ICD-10, but also to recommend solutions and to aid our clients in the implementation of those solutions.
Action Steps
ICD-10 compliance will require a dedicated effort and it will not be painless. The window of opportunity to capitalize on ICD-10 will close very quickly. However, with proper forecasting and planning, healthcare payers can transform a government regulation into a competitive advantage. As a result, it is imperative that your planning sessions start today.
