Jan. 16—The October implementation of a delayed update in healthcare claim codes could have “serious” financial consequences for hospitals and health systems without additional steps by Medicare officials, HFMA recently warned. 

Transitioning from ICD-9 to ICD-10 code sets aims to add codes for new diseases and procedures, but requires healthcare providers and insurers to switch about 14,000 codes for more than 69,000 codes. In 2012, the October 2013 implementation of the code switch in federal healthcare programs was delayed for a year.

Additional testing and backup payment plans are needed before the Oct. 1 implementation of ICD-10 requirements for providers, Joseph J. Fifer, president and CEO of HFMA, wrote in a Jan. 9 letter to Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS).

Fifer urged “comprehensive” testing of the readiness of Medicare contractors and state Medicaid agencies for ICD-10 implementation.

“We are concerned, however, that at this point it is not clear what the scope or timeline for testing with the CMS contractors will be,” Fifer wrote.”Failure to appropriately test all aspects of the ICD-10 implementation may result in a significant cash flow disruption for providers shortly after the Oct. 1, 2014, implementation date.”

A “significant cash flow disruption” for hospitals is possible without end-to-end testing and fixes, he said.

The HFMA letter followed a November 2013 letter from the American Hospital Association (AHA) to CMS to ensure that Medicare contractors and state Medicaid agencies begin end-to-ending testing of ICD-10 electronic transactions and claims adjudications by January.

“It is essential that all testing be completed by the end of June so that providers, payers, and clearinghouses can resolve any issues discovered during testing and complete training well in advance of the Oct. 1, 2014, transition date,” wrote Linda Fishman, senior vice president of public policy analysis and development for AHA.

Advance Payment Need

Additionally, ICD-10 implementation could potentially produce disruption in claims processing systems and produce “cash-flow deficiencies for providers of all sizes.”

“This implementation is mandatory for all providers on the same date,” Fifer wrote. “The sheer magnitude of this change opens the door to system issues and failures.”

To prevent financial shortfalls, Fifer urged CMS to prepare to offer advance payments to all Medicare- or Medicaid-enrolled providers that request such assistance.

Publication Date: Thursday, January 16, 2014