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BioPharma: Physicians Health, IT Priorities

HIT Perspectives Biopharma Insights – November 2015

Physicians’ Health, IT Priorities to Focus on ICD-10 and Meaningful Use

By Michael Burger,  Senior Consultant

For at least the next year or so, physician practices will be concentrating on two major initiatives involving health information technology (health IT): adoption of International Classification of Diseases, 10th Revision (ICD-10) coding for diagnoses and continued compliance with meaningful use (MU), the government’s health IT incentive mandate.

Implementation of ICD-10 ranks among the top 10 issues for physicians to watch in 2015, according to a list published by the American Medical Association (AMA). For physician practices, the change to the new ICD-10 code set has proven to be one of the most complex and expensive undertakings in many years. The AMA’s list also notes that myriad regulatory requirements, which take time away from patient care, are among physicians’ greatest frustrations. That consternation will be heightened when practices will have to comply with the newly released MU regulations for stages 2 and 3.

ICD-10 transition. ICD-10 finally went live on October 1st, after nearly a decade of prompting by the federal government and certain standards organizations. Provider groups fought hard to delay its implementation and were successful. But now the time of reckoning has arrived, creating a great deal of pent-up anxiety.

Its overall introduction went fairly smoothly from a technology point of view. Health IT vendors have been prepared for the conversion for a long time. So have practice management system vendors, which, among other business operations, convert medical data within an electronic health record (EHR) into billing information for insurers. The government was confident things would go well, even as far back as a year ago, when more than 500 providers, suppliers, billing companies and clearinghouses participated in a test week. Almost 13,700 Medicare fee-for-service test claims were submitted, with 76% being accepted. That said, we can gauge how well ICD-10 implementation is working if and when there is a tsunami of denied claims in the next few months.

Now the devil’s in the implementation details in the back office. While many physician office staff received training, using ICD-10 is easier said than done. The transition involves going from the 13,000 codes associated with ICD-9 to the 68,000 codes in the latest version of ICD-10. The ICD-9 code set was unable to keep pace with the myriad innovations in medical care, such as the discovery of many new conditions, the development of new treatments and the introduction of many new types of medical devices. More importantly, it ran out of space in many key parts of its hierarchical database, rendering it increasingly unusable. The ICD-10 code set is far more granular in describing the current practice of medicine and has the flexibility to adapt with change. It also has been in use by the international community for many years.

Vendors are offering to help practices code to ICD-10 for their claims and tools in order to help smooth the conversion, which makes sense because coding affects the revenue streams of physician practices. Incorrect coding translates to lost or delayed reimbursements as well as delays in patient care.

Moreover, the physician office personnel need to fight through the learning curve on the business side of the equation. Getting up to speed with ICD-10 could delay bill processing. According to some estimates, accounts receivable could run from the usual 45-55 days to 55-75 days, depending on the staff’s readiness and how quickly they can adapt. Smaller practices, in particular, have a “pay as we go” policy and lack large cash reserves, so the ICD-10 transition may create financial challenges if they aren’t vigilant.

Needless to say, the transition to ICD-10 will continue to be a concern of physician practices for the next couple of years.

Meaningful use. Despite major pushback from physician organizations and Congressional concerns,   MU stage 3 is set to be optional in 2017 and start on January 1, 2018. Providers have said it before and they’ll say it again: this is too much, too soon. There is a lot of merit in that concern. Although the vast majority of providers are now using EHRs, more than 60% of hospitals and about 90% of physicians have yet to attest to MU stage 2.

There is a silver lining for providers. According to the government, the MU3 final rule adopts flexible reporting periods that are aligned with other programs, which ostensibly reduces burden on providers.  For example, MU3 will move from fiscal year to calendar year reporting for all providers beginning with 2015 reports. Reporting periods also will change, with a 90-day reporting period in 2015 for all providers, for new participants in 2016 and 2017, and for any provider moving to stage 3 in 2017.  However, providers are left with barely 90 days to attest for the 2014 reporting period, which doubtless will lead to confusion and consternation.

In the end, all this might be too much for many providers. They face a lack of readiness for stage 2, the end of the MU incentive money, and the perceived moving target of MU3 requirements. Also, the full details of MU stage 2 have just been finalized, leaving providers scrambling to comply. All this is likely to convince more providers to abandon MU in the near term, take any payment hits that might be entailed and hope things will get better in 2019, when the provisions kick in for the Medicare Access and CHIP Reauthorization Act of 2015 or MACRA.

MACRA. Speaking of MACRA, physicians will have to start addressing the next big MACRA-created program that replaces MU. MACRA sunsets MU, as we know and love it, at the end of 2018 and rolls it up with the Physician Quality Reporting System (PQRS) and Value-Based Payment Modifier (VBPM) into one big reporting system at the beginning of 2019. The result: MU will be transformed from a stand-alone program to a component of a larger reporting system called the Merit-Based Incentive Payment Systems (MIPS) program, which will affect everyone for the next 10-12 years out. The Centers for Medicare and Medicaid Services (CMS) expects to issue a proposed rule regarding MIPS in the spring of 2016, which most likely will tie MU to physician payment. That is because MACRA originated as legislation to ‘fix’ Medicare physician payment mechanisms and the other two programs in MIPS are tied to physician payment. We assume the goal is to link MU functionality and physician payment, which is the only thing that makes policy sense in creating a gigantic new reporting system. Will MIPS be an improvement in the sense that consolidating the three major programs will make things easier to coordinate or will it be too unwieldy? The government has asked for comments on how best to coordinate MACRA with MU3, so it will be interesting to see what stakeholders think and how CMS reacts. Anyone up for more rounds of rules making and new requirements? Anyone?