New MGMA research: industry coordination lagging; less than 10 percent of physician practices ready for ICD-10

Association urges CMS to take immediate action


Englewood, Colo., Feb. 4, 2014 – As the Oct. 1 compliance date to transition to the International Classification of Diseases, Tenth Revision (ICD-10) approaches for physician practices, MGMA research released today indicates that overall readiness for implementation continues to lag. Less than 10 percent of responding practices reported that they had made significant progress when rating their overall readiness for ICD-10 implementation, up only slightly (from 4.7 percent) since June 2013, when MGMA previously conducted research to assess readiness levels. The new research includes responses from more than 570 medical groups where more than 21,000 physicians practice.

“The critical coordination that must take place between practices and their software vendor, clearinghouse and health plan partners is simply not happening at the pace required for a seamless implementation. Very simply, ICD-10 is behind schedule,” said Susan L. Turney, MD, MS, FACP, FACMPE, MGMA president and chief executive officer. “MGMA continues to advocate on behalf of members and provides tools and resources to help practice executives make the transition to ICD-10 more cost effective and less disruptive to their organizations.”

MGMA urges the Centers for Medicare & Medicaid Services (CMS) to immediately take action to help ensure that physician practices can successfully undertake such a massive transition, including:

•    Initiating complete end-to-end testing with physician practices – assessing claims throughout the entire business cycle
•    Releasing all Medicare and Medicaid payment edits and advising commercial health plans to do the same
•    Publishing on an ongoing basis the readiness level of all Medicare contractors and state Medicaid agencies
•    Assessing the readiness and targeting outreach to practice management (PM) and electronic health record (EHR) software vendors serving physician practices
•    Continuing to expand provider education efforts, especially to smaller and more vulnerable organizations

“As the agency overseeing the nation’s largest health plan, it is imperative that CMS show leadership by reversing its position and begin end-to-end provider testing,” said Turney. “The publication of testing schedules, payment policies and readiness levels are all necessary actions for both CMS and practice trading partners in the private sector. Without this preparation, there will be significant increases in cash flow disruptions to practices that will affect the ability to treat patients.”

MGMA research also revealed:

•    Software upgrades or replacements are needed. More than 80 percent of respondents indicated that their PM software would require replacement or upgrading in order to accommodate ICD-10 diagnosis codes, up from 73.2 percent in June. Moreover, 81.8 percent indicate that their EHR needs to be replaced or upgraded, a jump from 65.3 percent in June.
•    Significant software costs to be absorbed by practices. Just 41 percent of respondents reported that their cost to upgrade or replace their PM system software will be covered by their vendor, with about 50 percent of respondents indicating that their vendor will cover the cost of their EHR replacement or upgrade. For those required to cover these software costs, they report an average cost of $11,500 per FTE physician for the PM upgrade or replacement and $12,885 for the EHR. This translates into a cost of $243,850 for a ten physician practice for the ICD-10 software alone.
•    Internal software testing lagging. Only 8.2 percent stated that they have begun or completed testing with their EHR vendor, compared to 4.7 percent in June. Slightly more than 10 percent of respondents reported that internal software testing had begun or is complete with their PM vendor, a slight increase from 5.9 percent in June.
•    External communication and testing delayed. In June, 70 percent of respondents stated they had not heard from their major health plans regarding the date on which ICD-10 testing would begin. Six months later, nearly 60 percent say they still have not heard from their health plans. Moreover, only 5.4 percent reported that they have begun testing with their major health plans. Almost 60 percent stated in June that they had not heard from their clearinghouse regarding a testing date, and nearly 50 percent indicate they still have not heard. Only 8.1 percent reported that they had started testing with their clearinghouse.
•    Concern about clinical documentation and loss of productivity remained constant. The number of respondents who indicated that they are concerned or very concerned about the expected changes to clinical documentation remained constant at about 89 percent. Similarly, about 89 percent reported in both January and June that they were concerned or very concerned about the loss of clinician productivity after implementation, and about 86 percent about the loss of coding staff productivity. Finally, the expected change in difficulty for clinicians to select appropriate diagnosis codes remains extremely high with nearly 98 percent expecting that it will be somewhat or much more difficult under ICD-10.

CMS has mandated the ICD-10 diagnosis code set for use by physician practices, other providers, clearinghouses and health plans. The healthcare industry uses the ICD code set, developed by the World Health Organization, to identify patients’ diseases, signs, symptoms, abnormal findings, complaints, and causes of injury or diseases. With ICD-10 containing more than five times the number of codes as ICD-9 and incorporating a completely different structure, the new code set will require extensive changes for medical groups.

Additional resources for physicians and medical practice executives on transitioning to ICD-10:
MGMA In Practice blog: 3 provider documentation misconceptions
ICD-10 Preparation Guide
ICD-10 Virtual Academy
ICD-10 Implementation Guide for Physician Practices
10 questions to help you prepare for ICD-10

About MGMA
The Medical Group Management Association (MGMA) helps create successful medical practices that deliver the highest-quality patient care. As the leading association for medical practice administrators and executives since 1926, MGMA helps improve members’ practices through exclusive member benefits, education, resources, news, information, advocacy, and networking opportunities, and produces some of the most credible and robust medical practice economic data and data solutions in the industry. Through its industry-leading ACMPE board certification and Fellowship programs, MGMA advances the profession of medical practice management.

Through its national membership and 50 state affiliates, MGMA represents more than 33,000 medical practice administrators and executives in practices of all sizes, types, structures and specialties. MGMA is headquartered in Englewood, Colo., with a Government Affairs office in Washington, D.C.

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