It’s been a year since the big lift of converting the entire claim stream for the healthcare industry to the larger and more granular ICD-10 family of diagnostic and procedural codes.

The Oct. 1, 2015, launch went smoothly compared with the warnings of technological meltdown and cash-flow Armageddon that led to three delays totaling four years.

Claims flows, measured by claims denial rates, returned to normal after a few months, according to the CMS and confirmed by industry experts.

“This is the Y2K of coding,” said John Cuddeback, chief medical informatics officer of the American Medical Group Association. “I think people did a pretty good job of preparing.”

But this month, physicians face a new ICD-10 challenge. Last year, the CMS granted physicians a one-year grace period, promising not to deny Medicare Part B claims for lack of specificity of ICD-10 coding. Many commercial payers similarly gave physicians “flexibility,” but that grace period ended Oct. 1, 2016.

The same day, the CMS released an annual update to the codes that contained what Sue Bowman at the American Health Information Management Association called “some hiccups in the hospital DRG system,” But, she added, “I think we’re past most of that.”

Experts say it’s too early to tell whether the switch to more stringent coding requirements will snag docs’ claims. “We’re keeping are ears open to see if that has had any impact on claims,” said Robert Tennant, director of health information policy for the Medical Group Management Association, a trade association for managers of physician office-based practices.

But the promise of ICD-10 involved more than a revenue-cycle upgrade. The new codes were touted as essential paving stones on the road to value-based purchasing, leading to improvements in healthcare data analytics, population health management, care quality and lower costs. Those benefits have yet to materialize.

“I don’t expect to see anything along those lines until another year or two,” said Rhonda Buckholtz, a 25-year health IT veteran and vice president of strategic development at American Association of Professional Coders, representing the workers who ensure healthcare claims are affixed with the appropriate ICD-10 code.

USMD Health System, Irving, Texas, has used ICD-9 coded data to identify high-risk patients and is moving now to use predictive analytics powered by both ICD-9 and ICD-10 codes to identify patients on the borderline between wellness and sickness so caregivers can intervene before more expensive ailments develop.

But Dr. Charles Van Duyne, the multispecialty group’s CMIO, said he’s still “cautiously skeptical” that ICD-10 will ever pay off in clinical quality improvement commensurate with the money and effort put into the conversion. “Yes, ICD-10 gives you more granularity, providing you’re doing the coding correctly. But having more information isn’t necessarily better. What you’re really looking for is insight into the data and actionable information out of that data.”

USMD Health System participates in multiple value-based payment models, including three years at full risk under Medicare Advantage.

Such arrangements require significant investments in technology and training, but often the data required is not in ICD-10 diagnosis and procedural codes. For example, blood glucose readings for diabetic patients are far more important over time than the initial diagnosis code for diabetes.

Some experts say that a couple more years of building up databases of medical records coded in ICD-10 will be needed before a fair assessment of the effects of the codes can be made.

“It’s not just going to be ICD-10,” said Mark Morsch, vice president of technology for Optum360, the revenue cycle and services management arm UnitedHealth Group. “It’s going to be a combination of things like computer-assisted coding, and tools to link the coding data to underlying clinical data and process that will provide the return on investment on this. It will be hard to point to ICD-10 as driving the improvement, he said, “but that information is going to be incredibly helpful as you look to leverage analytics and look at populations and decide how chronic disease needs to be managed.”

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The Office of the National Coordinator for Health IT has finalized a rule (PDF) that will give it more oversight over certifying electronic health records and other technologies that store, share and analyze health information for consumers. It also gives it the authority to ask developers to pull from the market products that aren’t compliant.

The ONC first proposed increasing its role in the certification, review, and testing of health IT products in a draft rule released this past March. The agency received 48 comments by its May 2 deadline.

The ONC would now have the power to decertify health IT products that don’t comply with regulations or are found to pose a risk to public health or safety, for example, if they caused medical errors.

If the ONC decertified a product, its developer would be required to notify affected customers and providers who purchased the products. ONC would also issue a cease and desist notice to prevent the future sale or marketing of the product.

In the final rule, the agency backed off a proposal to review cases in which non-conformity could compromise the security or protection of patients’ health information or that could lead to inaccurate or incomplete documentation and result in bad or duplicative care.

“Our decision not to establish regulatory processes for such oversight at this time is based in part on the recognition that other agencies have the ability to investigate and respond to these types of issues and our desire to make the most efficient use of limited federal resources,” the rule said.

Response to the rulemaking was mixed. The American Medical Association supported the ONC’s idea to use corrective actions to resolve patient safety and security issues involving an IT product. However, the trade group was concerned about the suspension or termination of an IT product’s certification.

That action “may have serious repercussions for physicians and patients. Without these tools, physicians and patients may be unable to access necessary information or coordinate care,” the trade group said in a letter commenting on the draft rule.

In response to the comment, the agency emphasized termination is a last resort. It also added a new, intermediate step in the direct review process called “proposed termination.” That will give health IT developers a chance to resolve issues regarding a non-conformity prior to decertification.

The College of Healthcare Information Management Executives, a trade group that represents chief information officers at hospitals, praised the rule for addressing clinicians’ concern about the usability of EHRs. Other members worry some systems fail to calculate quality measurement data correctly, jeopardizing the accuracy of information that is increasingly tied to payment and penalties for providers.

The Electronic Health Record (EHR) Association felt the ONC’s proposed rule inappropriately expands the agency’s legal authority.

The potential costs of this rule for health IT developers, the ONC, and healthcare providers may be as much as $650 million, with an annual cost of $6.5 million.

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Nearly a third of physicians could be exempt from Medicare’s new merit-based incentive payment system under a final rule the CMS issued Friday for implementing the Medicare Access and CHIP Reauthorization Act.

The CMS also signaled it would broaden the opportunities for physicians to participate in alternative models that make them eligible for bigger rate increases and bonuses.

In April, the CMS released the proposed rule on MACRA, which replaced the old and flawed sustainable growth-rate formula for physician pay with a new method meant to shift physicians away from the fee-for-service model and onto a value-based payment system. To avoid penalties under MACRA, physicians will participate in one of two reimbursement tracks: a merit-based incentive payment system or advanced alternative payment models.

In the merit-based incentive payment system, known as MIPS, physician pay will be based on success in four performance categories: quality, resource use, clinical practice improvement and “advancing care information,” which is based on the meaningful-use program the government has used to decide whether doctors should be rewarded for using electronic health records.

The agency heeded the concerns of small practices and Congress about the framework’s impact on small practices and broadened its exclusion for providers who treat a low volume of Medicare patients from MIPS.

To help ease the impact on small providers, the CMS will exempt physician practices with less than $30,000 in Medicare charges or fewer than 100 unique Medicare patients per year. The draft rule set the threshold at $10,000 a year.

An analysis by the American Medical Association found that about 16% of all MIPS-eligible clinicians would be exempt under the proposed version of the rule. The threshold in the final rule would exclude 30% of physicians, according to the AMA analysis.

The CMS noted that more than 93% of Medicare Part B charges would still be subject to the incentive framework, which was devised to nudge physicians toward value-based care.

Acting CMS Administrator Andy Slavitt said in conference call with reporters that the thousands of comments received on the proposed rule could be summarized as: “Make the transition to MACRA as simple and as flexible as possible.”

The CMS said it would provide $100 million in technical assistance to clinicians participating in MIPS who are in small practices, rural areas and in areas with a shortage of health professionals.

The MACRA got rid of the “meaningful use” rule that the administration previously used to decide if providers should be rewarded for using electronic health records, but doctors will still be accountable for using health information technology under the “advancing care information” performance category in the rule that counts 25% towards a physician’s overall performance score, as was proposed initially.

Heeding calls for more flexibility, the CMS in the final rule said it will move away from the “all or nothing” approach previously used in EHR incentive programs. The rule reduces the total number of required measures under the category to five from 11 in the proposed rule. All other measures will be optional for reporting.

Required measures include security risk analysis, e-prescribing, providing patient access, sending summary of care and requesting and accepting summary of care. The required measures must be fulfilled for a minimum of 90 days to receive credit.

The CMS said that while public comments called for the category to allow for reporting on “use cases,” such as the use of EHRs to manage referrals and consultations, it did not include such policies in the final rule. However, in 2017 the CMS will add bonus points for improvement activities that use EHRs and for reporting to a public health or clinical data registry.

The CMS also said that eligible clinicians participating in MIPS must show that they are engaged in activities that support health care providers on the performance of certified electronic health record technology, such as cooperating with the ONC’s review of the technology, and that they are not blocking data sharing.

The final regulations also answer requests for lower minimum reporting thresholds. The agency originally wanted providers to report quality measures on 90% of their patients from all payers, and 80% of Medicare patients. Small providers argued they would have a harder time obtaining the information technology and data needed to meet that requirement. The final rule drops the Medicare threshold to 50%.

Between 592,000 and 642,000 clinicians, according to the rule, are expected to submit data for MIPS during the first performance year, which begins Jan. 1.

The CMS also said it was expanding opportunities to participate in programs that qualify as “advanced alternative payment models” under the law. Practices with a significant portion of their revenue under such a model are exempt from MIPS and qualify for larger rate increases and bonuses.

The agency now estimates that more than 125,000 clinicians will participate in advanced APMs for the 2018 performance year.

Slavitt said the CMS plans to develop more APMs through the CMS Innovation Center. “Ultimately, we believe that we’re not looking to transform the Medicare program in 2017, we’re looking to make a long-term program successful,” he said.

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