Last week's ICD-10 delay is a positive development for nonprofit hospitals, according to a Fitch Ratings report.
This past Tuesday, President Barack Obama signed legislation that delays the transition to ICD-10 coding by at least one year. The extension of the transition deadline will give providers and payers more time to prepare for the switch to ICD-10, according to Fitch.
"While a majority of providers have made the substantial investment in technology and personnel to be ready for the transition, the readiness of both governmental and commercial payors to adequately process claims and payments in a timely manner has been questioned," Fitch states in a news release. "In our view, lower rated credits would be more susceptible to this risk as [they] have less financial resources to absorb a potential delay in reimbursement."
That statement echoes a Fitch report released last month that stated the sheer magnitude of the transition within the healthcare industry would likely add pressure to nonprofit hospitals' cash flows and could cause downgrades in hospitals with weak liquidity positions or depressed profitability.
Not everyone views the delay as beneficial. Industry stakeholders and organizations — including the American Health Information Management Association, College of Healthcare Information Management Executives and vendors NextGen and athenahealth — have criticized lawmakers' decision to delay the switch, calling it irresponsible and disruptive to preparation efforts.
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