Survey: Industry’s ICD-10 Readiness Cause for Concern

The one-year compliance extension for the ICD-10 rule has caused some vendors, providers and payers to delay their own compliance efforts, according to a March study by the Workgroup for Electronic Data Interchange.

While the study indicates that payers have made some progress since WEDI’s last study on the matter a year ago, the group says provider and vendor readiness to meet the October 2014 deadline is a major concern. Further, the study, which was conducted in February among 947 of such organizations, may offer a more advanced state of industry readiness, as most respondents were WEDI members and are more up-to-date on such compliance issues, the group indicated.

“It has become clear that many entities postponed their work until much later,” says Stanley Nachimson, director of the North Carolina Healthcare Information and Communications Alliance/WEDI timeline initiative for ICD-10. “Indications remain that significant numbers of industry participants have a considerable amount of work to do in a very short time.”

Among those organizations surveyed, a third of providers said the compliance date delay shifted their timeline for their ICD-10 projects by more than six months, while a quarter of vendors admitted such changed priorities. Further, about half of responding health plans said they have shifted their compliance efforts by more than six months, while about a third also reported losing resources previously dedicated for the project.

When questioned further about their compliance plans, more than 40% of providers said they didn’t have an estimated completion date for their ICD-10 impact assessment, only a slight decrease from last year’s survey. Almost 40% also said they were unsure of when they were going to complete ICD-10 business changes, which is about the same compared to the previous study. Further, about half of surveyed providers said they weren’t sure when they would be able to begin external testing with health plans or other trading partners.

Vendors also showed slow progress with their compliance efforts. About 40% said they haven’t started or are less than 25% done with solution development for the majority of their ICD-10 products and services, which is about the same percentage as in last year’s survey. Further, the percentage of vendors indicating they would start ICD-10 customer review and beta testing in 2013 was about the same as the 2012 survey, while the number that indicated their products would be ready in the year of the compliance deadline increased from 25% to 33%. About 20% of responding vendors, however, indicated they have completed the development of their ICD-10 products—more than double the number from last year’s survey.

Health plans showed the most progress in ICD-10 compliance with half saying they had completed their formal impact assessment/gap analysis and 25% saying they were more than 75% complete in the latest study, compared with a third and a fifth respectively in the 2012 study. Also, about 75% indicated they will begin internal testing in the year before the compliance deadline, compared with a little more than 50% saying they would do so in last year’s study. Further, almost two-thirds of health plans said they would use direct ICD-10 claims processing as their primary strategy, compared with only slightly more than 25% of providers.

The latest survey was the seventh such research WEDI has released on the topic since 2009. The group plans to conduct additional surveys on ICD-10 compliance efforts throughout 2013 and 2014.