February 06,2015

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Aaron Fobes, Julia Lawless (2020) 224-4515

GAO Report: CMS On Track to Transition to Next Health Code Phase

WASHINGTON - Today, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) said a new Government Accountability Office (GAO) report gives them confidence that the Centers for Medicare and Medicaid Services (CMS) is adequately preparing to implement  the tenth  revision to the International Classification of Diseases (ICD-10) on October 1, 2015. ICD codes are used to classify diseases and health issues on patient healthcare records.

“As demonstrated by this report, the provider outreach and responsiveness to stakeholder concerns from CMS have kept the agency on track to upgrade to the next level of healthcare coding,” said Hatch. “While additional testing will be needed to ensure its success, the transition to the new system will streamline the management of healthcare records and improve patient care. I will continue to keep a close eye on this issue but see no reason for any delay past the October deadline.”

“ICD-10 codes will provide more specific information about patients, which will allow payers to more accurately reimburse providers and improve the quality of care provided to patients. CMS has taken unprecedented actions to help providers prepare for this change.  We will continue to monitor the testing CMS is conducting as we near the October 1 implementation date.” said Wyden.  

GAO examined the status of CMS’s activities to support healthcare providers and payers in the transition from ICD-9 to ICD-10 coding as well as CMSs’ own readiness to process claims from providers and payers.

According to stakeholders interviewed by the GAO, previous implementation delays have been costly and burdensome. CMS has estimated that a one-year delay would increase the costs for some providers and payers by as much as $6 billion. In addition, both Medicare and Medicaid have incurred millions of dollars in cost because of the delay, according to the report.

CMS reported to GAO that the Agency has completed all ICD-10 related changes to its Medicare payment systems and that Medicaid agencies have reported they are ready for the change.  According to the report, CMS documentation shows that testing to date has not identified any CMS-related issues and that additional testing will continue up to the date of implementation.  GAO said that CMS has taken action to help prepare stakeholders for the move to ICD-10, including in-person training sessions, teleconferences, educational materials, and monitoring the readiness of providers and payers.  Many of the tools that CMS has developed are specifically geared towards small and rural providers.  

At the Committee’s request, GAO will be continuing to monitor preparations and testing of ICD-10 implementation efforts by CMS to ensure that the system is ready for the October 1 deadline.