Insurers lose out with ICD-10 delay

The U.S. Department of Health & Human Services decision to delay implementation of ICD-10 likely will have far-reaching, negative ramifications for health insurers. One of the biggest problems in deciding to delay the ICD-10 deadline--previously set at Oct. 1, 2013--is that HHS hasn't yet announced a new timeline. The longer HHS takes to make that decision, the more complicated and difficult the challenge becomes for insurers, according to AIS Health.

The ICD-10 delay has "very far-reaching consequences" for health insurers, "and it's getting more complex by the day from the standpoint of not knowing [the new deadline] and the ramifications of what that means to each organization," Juliet Santos, senior director of medical banking and financial systems, said at the Health Information and Management Systems Society (HIMSS) conference last month.

That's largely because insurers already have spent millions of dollars on information technology improvements related to ICD-10 implementation. In fact, America's Health Insurance Plans (AHIP) estimates that the entire health insurance industry could spend as much as $3 billion on ICD-10.

In addition to the extensive costs, insurers have dedicated significant time and energy toward ICD-10 compliance when they could have redirected their attention to the multiple health reform requirements they must meet. And without knowing the new deadline, insurers must suspend conversion projects like ICD-10 testing, which industry guidelines previously were suggesting should begin later this year. If the new ICD-10 deadline happens to coincide around other health reform compliance requirements, insurers could face a dearth of IT resources, AIS Health noted.

Of course, insurers aren't alone in grappling with the repercussions of an ICD-10 delay. A survey conducted last month by Edifecs found that a two-year delay could be "catastrophic." Moreover, 64 percent of respondents said a delay wouldn't improve readiness, and more than 75 percent said the delay actually would hinder other health reform efforts, FierceHealthIT reported. When it comes to costs, 49 percent of respondents think their budgets will increase between 11 and 25 percent for every year the ICD-10 deadline is postponed. No respondents think that costs will go down due to the delay.

To learn more:
- read the AIS Health article