Potential Impact of ICD 10 Conversion on Healthcare Provider and How Banks Can Help

On October 1, 2015, the United States healthcare community will move from the International Classification of Diseases (ICD) version 9 to ICD version 10. ICD codes in the United States are used for healthcare claims billing between health plans and providers. These codes are used by the providers to tell the health plans/insurance companies what procedures were performed on the patient. With ICD 9, there are 18,000 procedure and diagnosis codes. With ICD 10, there will be 154,000 procedure and diagnosis codes. 

Many in the healthcare industry are concerned about the challenges that will occur when the move from ICD 9 to ICD 10 takes place on October 1. The most significant concern is that many providers and health plans will have billing and payment issues. If providers do not begin using the ICD 10 codes or incorrectly code a claims submission after October 1, 2015, they will not be paid by the health plan. If the health plan has not moved to ICD 10, the provider will have the same result. There are many variations of the problem, but the bottom line is that this migration may lead to many provider practices having serious cash flow challenges and being unable to meet their business and payroll needs. 

Representatives from the American Medical Association (AMA) talked with NACHA staff about ways that banks can help their healthcare provider customers through credit lines that will help the providers through the potential bumps in the road caused by the ICD 10 conversion.  During the Provider Caucus at the ASC X12 meeting in October, participants recommended that all providers talk to their financial institutions about establishing a line of credit to cover their business and payroll expenses for six months.

There are serious concerns in the healthcare industry that a lot of provider organizations will fail during the first six months to a year following the ICD 10 conversion due to cash flow problems that are caused by billing and payment errors. The financial services industry can help the healthcare industry in supporting providers that contact their banks about lines of credit. Banks can also proactively reach out to their healthcare provider customers to offer assistance. By staying up to date on the conversion and taking advantage of the the financial services resources that are available, providers and health plans can better manage the transition, helping to make it as seamless as possible.