Did Hospitals Put Off RCM Upgrades for Nothing?

Posted on May 8, 2015 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

In December of last year, I wrote a piece outlining a study on revenue cycle management systems by research firm Black Book.  The piece noted that despite hospitals’ desperate need to modernize their RCM platforms, such upgrades were being put off over and over again, largely due to the cost of ICD-10 switchover and Meaningful Use compliance.

It’s hard to say whether ICD-10 prep or  MU compliance have been a greater strain on hospital budgets, but it’s clear that ICD-10 preparations have been a major distraction and a major cost.  Even if a hospital’s EMR has included ICD-10 codes in is platforms or upgrades, hospitals have still had to reconfigure some systems, do revenue impact testing with payers, conduct readiness testing with clearinghouses and train with their claims processing staff, and none of it has been cheap. And the longer hospitals wait to pull the trigger, the worse things get. The American Hospital Association recently estimated that delaying the ICD-10 switchover deadline has cost the hospital industry billions of dollars.

Given the cost of the run-up to the new code set — and the fact that most hospitals report being ready to switch over from ICD-9 — the industry has hoped against hope that the deadline wouldn’t be extended again. In fact, a recently-released survey by software firm QauliTest of more than 150 healthcare executives found that 83% said they think ICD-10 will go live as currently anticipated on Oct. 1.

And that’s where politics enters the picture. While hospitals seem raring to go ahead with the transition and skip any further delays to the deadline,  Texas Rep. Ted Poe (R) has a different outcome in mind.  Perhaps pushed by physicians’ lobbying groups, which still oppose the switch as being too burdensome and costly to handle, Poe has introduced a bill which would actually prohibit HHS from adopting ICD-10 as an ICD-9 replacement.

It’s hard to tell whether the bill will even make it out of the House, as it currently has only six co-sponsors, each fellow Republicans to Poe.  But if it did, hospitals would have plenty to gripe about.

As we’ve pointed out here, one of the major sacrifices hospitals have had to make due to outside forces is to postpone RCM system investment, a lapse which has doubtless cost hospitals plenty due to lost money due to claims processing problems. The longer the need to put off RCM switchovers or improvements lasts, the greater the chance that it hospitals will lose too much to afford on claims old systems can’t handle.

Bottom line, I’d argue that another ICD-10 delay or cancellation of the entire transition would be terribly unfair to hospitals.  If CMS needs to help doctors through the process or even help them pay for it, so be it. Hospitals deserve to be freed to focus on their other IT problems, not wait with bated breath for yet another ICD-10 delay.