Figure 1  illustrates the flow of health care transactions that include ICD codes from  the health care provider to payers, and identifies which types of  organizations are and are not covered entities. In addition to the Cooperating Parties, other organizations are helping to  prepare covered entities for the ICD-10 transition. CMS Developed Transition Educational Materials, Modified Medicare Systems, and Assisted Medicaid Agencies

In preparation for the transition from ICD-9 to ICD-10 codes, CMS  developed various educational materials, conducted outreach, and  monitored the readiness of covered entities and the vendors that support  them for the transition. In addition, the agency reported modifying its  Medicare systems and policies. CMS also provided technical assistance  to Medicaid agencies and monitored their readiness for the ICD-10  transition. For example, in 2013, CMS held two meetings with  stakeholders that represented covered entities and vendors. In addition, CMS piloted a direct mail  project to small primary care practices in four states—Arizona, Maryland,  Ohio, and Texas—and CMS officials told us they planned to complete an  assessment of the pilot in early December 2014. More  recently, CMS has relied on its stakeholder collaboration meetings, focus  group testing, and review of surveys conducted by the health care  industry to gauge covered entities’ readiness for the transition, according  to agency officials. Medicare fee-for-service (FFS) claims processing systems. CMS  documentation states that the agency completed all ICD-10-related  changes to its Medicare FFS claims processing systems as of  October 1, 2014, and that the claims processing systems have been  updated in response to the results of internal testing, but it is not yet  known whether updates may be needed based upon the results of  external testing. Additionally, CMS plans to conduct  “end-to-end testing”—that is, testing to determine how claims  submitted by providers and suppliers that contain ICD-10 codes  would be adjudicated, and that accurate payments for these  claims will be calculated—during three weeks in 2015 (in January,  April, and July). According to CMS officials, as of October 2014, all states and  the District of Columbia reported that they would be able to perform all of  the activities that CMS has identified as critical to preparing for the ICD- 10 transition by the deadline. CMS officials stated that all Medicaid  agencies must test each of the critical success factors and report back to   However, as of November 26, 2014,  CMS no later than June 30, 2015.not all Medicaid agencies had started to test their systems’ abilities to  accept and adjudicate claims containing ICD-10 codes. Stakeholders Cited Testing Activities, Education, Outreach, and Provider Burden among Concerns; CMS Has Taken Steps to Address Concerns and Prepare for Transition

Stakeholders we contacted identified several areas of concern about the  ICD-10 transition, including that CMS needed to expand the number of  ICD-10 testing activities, with some of those stakeholders commenting  that CMS’s ICD-10 testing has not been sufficiently comprehensive. Eleven  stakeholders we contacted expressed concerns about the extent to  which the covered entities they represent were aware of and using the  educational materials developed by CMS. In particular, while all 28  stakeholders we contacted indicated that CMS’s educational materials  have been helpful to covered entities, some of them were concerned  that the materials may not be reaching the covered entities most in  need of them, such as solo or small physician practices, rural and  critical access hospitals, nursing homes, and home health agencies. Specifically, CMS partnered with WEDI to create the  “ICD-10 Implementation Success Initiative,” a partnership between  payers, providers, coding organizations, and other organizations to  promote awareness of the ICD-10 transition by directing users to  available CMS and industry educational resources. Six stakeholders we contacted recommended that CMS  expand its in-person training for physician practices to additional  states. Officials said that where resources are not available for in-person  training, CMS is reviewing options to offer more video training through  the ICD-10 website. Develop additional specialty-specific materials. Specifically, stakeholders recommended that the agency communicate  plans to ensure that Medicare FFS providers would be reimbursed in a  timely manner; provide information on the effect of the ICD-10 transition  on CMS’s quality measurement activities; contact providers through non- electronic methods, such as print media and mail; promote a greater  sense of immediacy in preparing for the transition; provide information on  alternative methods for Medicare claims submission; and make public  CMS’s Medicare FFS contingency plans. Five stakeholders we  contacted recommended that CMS do more to engage with covered  entities through non-electronic methods. Beyond the agency’s electronic outreach efforts, CMS officials  indicated that the agency employs various methods, including bi- weekly stakeholder collaboration meetings, in-person training, and  print advertisements, to engage covered entities. Concluding Observations

A successful transition to ICD-10 codes requires every health care  provider, clearinghouse, and payer to prepare in advance of the   October 1, 2015, transition deadline. Agency Comments

We provided a draft of this report to HHS for comment. HHS concurred  with our findings. HHS also provided technical comments, which we incorporated as  appropriate.
Why GAO Did This Study

In the United States, every claim submitted by health care providers to payers—including Medicare and Medicaid—for reimbursement includes ICD codes. On October 1, 2015, all covered entities will be required to transition to the 10th revision of the codes, requiring entities to develop, test, and implement updated information technology systems. Entities must also train staff in using the new codes, and may need to modify internal business processes. CMS has a role in preparing covered entities for the transition.
GAO was asked to review the transition to ICD-10 codes. GAO (1) evaluated the status of CMS's activities to support covered entities in the transition from ICD-9 to ICD-10 coding; and (2) described stakeholders' most significant concerns and recommendations regarding CMS's activities to prepare covered entities for the ICD-10 transition, and how CMS has addressed those concerns and recommendations. GAO reviewed CMS documentation, interviewed CMS officials, and analyzed information from a non-probability sample of 28 stakeholder organizations representing covered entities and their support vendors, which GAO selected because they participated in meetings CMS held in 2013 or met GAO's other selection criteria.
GAO provided a draft of this report to HHS. HHS concurred with GAO's findings and provided technical comments, which GAO has incorporated, as appropriate.

What GAO Found

The Centers for Medicare & Medicaid Services (CMS), within the Department of Health and Human Services (HHS), has undertaken a number of efforts to prepare for the October 1, 2015, transition to the 10th revision of the International Classification of Diseases (ICD-10) codes, which are used for documenting patient medical diagnoses and inpatient medical procedures. CMS has developed educational materials, such as checklists and timelines, for entities covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA)—that is, health care providers, clearinghouses, and health plans, which GAO refers to as “payers”—and their support vendors. In addition, CMS has conducted outreach to prepare covered entities for the transition by, for example, holding in-person training for small physician practices in some states. CMS officials have also monitored covered entity and vendor readiness through stakeholder collaboration meetings, focus group testing, and review of surveys conducted by the health care industry. CMS also reported modifying its Medicare systems and policies. For example, CMS documentation states that the agency completed all ICD-10-related changes to its Medicare fee-for-service (FFS) claims processing systems, which reflect the results of internal testing. At this time, it is not known what, if any, changes might be necessary based upon the agency's ongoing external testing activities. CMS has also provided technical assistance to Medicaid agencies and monitored their readiness for the transition. For example, all Medicaid agencies reported that they would be able to perform all of the activities that CMS has identified as critical by the transition deadline; however, as of November 2014, not all agencies have started to test their systems' abilities to accept and adjudicate claims containing ICD-10 codes.
Stakeholder organizations identified several areas of concern about the ICD-10 transition and made several recommendations, which CMS has taken steps to address. For example, stakeholders expressed concerns that CMS's testing activities have not been comprehensive. In addition, while all 28 stakeholders GAO contacted indicated that CMS's educational materials have been helpful to covered entities, stakeholders were concerned about the extent to which those entities were aware of and using those materials. In response, CMS officials said that the agency has scheduled end-to-end testing with 2,550 covered entities during three weeks in 2015 (in January, April, and July), and has promoted awareness of its educational materials by, for example, partnering with payers, providers, and others to direct users to available CMS and industry educational resources. Stakeholders also recommended that CMS expand its in-person training and develop additional specialty-specific materials. CMS officials said the agency has added in-person training in additional states with plans to also offer more video trainings, and planned to develop additional specialty-specific materials. Additionally, stakeholders recommended that CMS do more to engage covered entities through non-electronic methods and to make its Medicare FFS contingency plans public. CMS officials indicated that the agency employs various methods to engage covered entities—including bi-weekly stakeholder collaboration meetings and print advertisements—and also conducted a direct mail pilot project to primary care practices in four states, and plans to expand the pilot. CMS officials also indicated the information in the agency's contingency plans that are relevant to providers is currently publicly available.