The U.S. Department of Health and Human Services has officially extended the deadline to 2014 for the implementation of a new claims code identifier called International Classification of Diseases (ICD)-10.
HHS announced the extension on Aug. 24 and proposed the plan on April 9. By using ICD-10, health care providers and health insurance payers could streamline their billing processes.
The news came a day after the HHS issued a final rule on Stage 2 of the meaningful-use incentives for adoption of electronic health records.
Companies such as Edifecs offer health care claims and billing software that help providers transition to ICD-10.
"Edifecs commends HHS for finalizing its ruling on the ICD-10 one-year delay," the company said in a statement. "We believe HHS has made the right decision and that a delay of this length strikes a fair compromise in meeting the needs of those health care entities that have already started down the ICD-10 path and those that have failed to either begin or show much progress."
Another software developer, VitalWare, offers a tool called VitalView, which provides a dashboard for hospitals and doctors' offices to keep track of claims deadlines and diagnostic codes.
The ICD-10 standard could cut "red tape" as outlined under Obamacare, the Patient Protection and Affordable Care Act, according to HHS.
"These new standards are a part of our efforts to help providers and health plans spend less time filling out paperwork and more time seeing their patients," HHS Secretary Kathleen Sebelius said in a statement.
A lack of a common standard for identifying health plans can lead to misrouting of transactions and rejection of claims due to insurance identification errors, HHS reported. The lack of uniformity in billing code identifiers can also cause difficulty in determining patient eligibility for health coverage.
As far as IT systems, analysts such as Christine M. Armstrong of Deloitte Consulting have compared the move to ICD-10 to the Y2K transition of 2000 as far as cost and impact.
Only 61 percent of health insurance companies anticipate being ready to meet the ICD-10 deadline by 2014, according to a July 10 "State of the Payer" survey by HealthEdge, a developer of software for health care insurers.
HealthEdge interviewed 100 leaders of health-insurance organizations and found that about half the insurers expect an ICD-10 delay to have limited financial impact on their operation.
A delay of one year was not sufficient, the American Medical Association (AMA) argued. The trade group for physicians recommended a delay of two years.
"The AMA appreciates the administration's decision to provide a one-year delay in response to AMA advocacy, but we have urged [the Centers for Medicare and Medicaid Services] to do more to reduce the regulatory burdens on physician practices so physicians can spend more time with patients," Dr. Steven J. Stack, AMA chair, said in an Aug. 27 statement.
ICD-10 could bring additional codes that providers and insurers must account for rather than a simple standard format, Stack suggested.
"Implementing ICD-10 alone requires physicians and their office staff to contend with 68,000 codes-a fivefold increase from the current 13,000 codes," said Stack. "The implementation of ICD-10 will create more challenges for physicians when our Medicare system is broken and cannot provide adequate funding to cover the cost of these additional administrative burdens."