Healthcare organizations on budget, if not on schedule, for ICD-10 transition

Early results released this week from a survey on ICD-10 readiness by the Washington, D.C.-based research and consulting firm The Advisory Board Company indicate that most healthcare organizations that have responded so far are at or below their budget for the transition, but they are behind schedule on testing and financial planning.

Among organizations that have completed the ICD-10 Readiness Survey, 95 percent said that their transition expenses have so far stayed at or below their ICD-10 budgets. However, responses also indicated a lack of consensus on what percentage of charts to dual code ahead of the federally mandated switch, the prevalence of renegotiated commercial contracts, and whether to model the financial impact of delayed reimbursement stemming from the transition.

Although nearly everyone (95 percent) will dual code charts ahead of the transition, respondents varied on whether they would dual code more than 30 percent of charts, 30 to 20 percent, 20 to 10 percent, or less than 10 percent. About a quarter admitted not yet knowing what the final percentage would be.

For most organizations surveyed (73 percent) plans include starting testing three to six months before the ICD-10 switch, and a little over one in five had already started running tests in collaboration with payors.

However, the survey respondents were split on whether to adjust contracts with payors ahead of the transition to negotiate terms that minimize risks associated with the ICD-10 transition.

In addition, despite the Centers for Medicare & Medicaid Services (CMS) specifically warning providers to accumulate funds now that could carry them over payment delays during the transition period, more than 40 percent of the organizations that responded to the survey had not yet looked at the impact the transition might have on their accounts receivable days and 30 percent had not begun building up cash reserves for the transition.

The survey is currently ongoing and can be completed online here.