HCIM

According to the RAND Science and Technology Policy Institute’s comprehensive technical report on The Costs and Benefits of Moving to the ICD-10 Code Sets, providers will incur costs for computer reprogramming, the training of coders, physicians, and code users, and for the initial and long-term loss of productivity among coders and physicians. The cost of sequential conversion (10-CM then 10-PCS) is estimated to run around $425M to $1.15B in one-time costs, plus somewhere between $5 and $40 million a year in lost productivity.

RAND calculated many of its cost savings estimates on the benefits resulting from the additional detail that ICD-10-CM and ICD-10-PCS will offer. The estimated savings from more accurate payments to hospitals for new procedures ranges from $100M to $1.2B. Benefits from fewer rejected claims range between $200M and $2.5B, and an estimated $100M to $1B will be saved due to fewer exaggerated claims. The identification of more cost-effective services and direction of care to specific populations would result in a benefit of $100M to $1.5B. This is in addition to any benefits that would come from better total disease management and better directed preventive care.

Blue Cross and Blue Shield sponsored a study to determine costs to the health care industry in adopting ICD-10-CM and ICD-10-PCS. The study indicated a cost range of $5.5-13.5B for systems implementation, training, loss of productivity, re-work, and contract re-negotiations during a 2-3 year implementation period. Over half of the costs would be borne by health care providers. Long term recurring costs for loss of productivity were estimated at $150-380M.

CMS Progress in Implementing the New Standards
CMS is well into the process of readying its FFS Medicare systems to handle the 5010/D.0 standards. All Medicare systems will be ready to handle the new standards by January 1, 2011. Medicare plans for its systems to handle the current 4010A standard and the new 5010/D.0 standards for incoming claims and inquiries and for outgoing replies and remittances from January 1, 2011 until January 1, 2012. This will allow providers to begin using the new standards on January 1, 2011, while providing an additional year for providers who are not ready.

In addition, where possible, CMS will be making system enhancements concurrent with the 5010/D.0 changes. These enhancements include capabilities such as:
• Implementing standard acknowledgement and rejection transactions across all jurisdictions (TA1, 999 and 277CA transactions)
• Improving claims receipt, control, and balancing procedures
• Increasing consistency of claims editing and error handling
• Returning claims needing correction earlier in the process
• Assigning claim numbers closer to the time of receipt

What do Providers need to know about the Administrative Simplification Act?
The Administrative Simplification Act (ASCA) requires the use of electronic claims (except for certain rare exceptions) in order for providers to receive Medicare payment. Therefore, effective January 1, 2012, providers must be ready to submit your claims electronically using the X12 Version 5010 and NCPDP Version D.0 standards. This also is a prerequisite for implementing the new ICD-10 codes. The HIPAA standards, including the X12 Version 5010 and Version D.0 standards, are national standards and apply to transactions with all payers, not just with Fee-for-Service (FFS) Medicare. Providers must be prepared to implement these transactions with regard to their non-FFS Medicare business as well. Medicare expects to begin transitioning to the new formats January 1, 2011 and ending the exchange of current formats on January 1, 2012.