ICD-10: Why Should the CEO Care?

By Marty Fattig for Hospital & Health Networks

The transition to ICD-10 may have been delayed a year, but that doesn’t mean hospital executives can tune out what’s happening in their organizations. It is up to the CEOs to make sure that their organizations have smooth transitions.

Well, they put off ICD-10 implementation once again this spring, moving it back a year to Oct. 1, 2015.  Some people with whom I visited since the delay was enacted said that their organizations were ready to go, had been testing with public and private payers, had been training staff and physicians, and were really quite put out that Congress had overridden the wishes of CMS and imposed the delay. Others were relieved because they had done little, if anything, to prepare. The biggest shock? Most of the hospital leaders with whom I talked really had no idea how prepared their organizations are or what things might crash and burn on or after Oct. 1 if their organizations are not ready for the conversion to ICD-10.

So, why should hospital CEOs care about ICD-10 implementation? Isn’t that a problem for the health information management department? It’s just a little coding change, right? We train the coders and the doctors, they enter some new codes on the chart and things go on as normal, right?

Well, not exactly.

The ICD-9 coding system that we currently use was first published in 1979 and, as with anything that is more than 30 years old, it is out of date. New diagnoses have been identified, new tests have been developed and medicine is generally practiced in a much different way. The ICD-9 coding system has approximately 17,000 codes. ICD-10 has approximately 155,000. Each code gives much more specific information than in the older version.

The situation reminds me of one I experienced when I was a lab consultant. I was asked to perform a cost analysis on every test performed in the laboratory so that each test could be priced based on its cost. I asked for a copy of the general ledger accounts so I could evaluate the expenses allocated to each test. What I found was that almost all of the expenses were being dumped into an account labeled “miscellaneous!”

That was where my detailed cost analysis ended. I had to make lots of general assumptions. The same is true with ICD-9 codes. One code covers a bucket of diagnoses so, when you try to break out that data attributable to a specific disease process or diagnosis, you end up making assumptions that might not be true.

The big reason that CEOs should care about the ICD-10 implementation is because it’s how your organization gets paid. I think you will find that a number of software packages in the typical hospital use ICD codes in some way. If they are not updated to the latest version, problems may occur. If your organization is not prepared for the big day, cash flow may be impacted. If the payers to which you submit claims are not prepared, cash flow may be impacted.

I recently heard one of my colleagues say that he intended to wait for the ICD-10 codes to go into effect and see what happens. That would be like my noticing that the fence was down, but waiting until all the horses were out to see if I had a problem.

Lastly, the reason CEOs should care about ICD-10 implementation is that the team leading the effort at your facility needs your support. ICD-10 implementation is hard work and will require a team effort and a detailed plan to be successful. The implementation team members need to know that you have their backs. They need to know that you will be holding all those involved accountable for the work that needs to be completed in their areas. Taking shortcuts or providing a minimal effort to achieve compliance without examining the steps or opportunities to maximize the benefits associated with ICD-10 could result in significant redesign costs later on. It is the CEO’s job to make sure this doesn’t happen.

If we all work together to make sure that the implementation to ICD-10 goes well, I believe that the conversion can be a positive thing. It will help us get to where we need to go to be successful with the new delivery models of health care. We will need clean, accurate, detailed information to inform our decisions. ICD-10 is one tool to help us do that. CEOs, it is up to you to make sure that your organization has a smooth transition.

Marty Fattig is CEO of Nemaha County Hospital in Auburn, Neb. He serves on the Health IT Policy Committee’s Meaningful Use Workgroup. He’s a past president of the Nebraska Rural Health Association.