March 11 (The following statement was released by the rating agency)
While the financial impact of the conversion to
ICD-10 is expected to be manageable for non-profit hospitals, the potential for
revenue cycle disruption may have negative credit reverberations, according to a
new Fitch Ratings report.
'It is a challenging time as health care reform moves forward and other
pressures, such as sequestration, inpatient volume declines, and reduced
reimbursement, are being felt. ICD-10 conversion will bring additional costs at
a time when hospital operations are already under pressure,' said Gary Sokolow,
Director in the U.S. Public Finance Group.
ICD-10directly affects the central components of hospital reimbursement -
coding, billing, and payment. Further complicating the change is the
simultaneous transition of government and private payors to ICD-10.
While providers and payors have had ample time to prepare for transition to
ICD-10 there is a heightened potential for payment delays and disruption. Fitch
believes the solid liquidity position of investment-grade rated hospitals and
health systems should help weather short-term pressure.
For more information, a special report titled 'Hospital Hot Topic: ICD-10
Conversion' is available on the Fitch Ratings web site at www.fitchratings.com.