This procrastination on the part of practitioners is actually quite logical. ICD-10 is a complex new language that includes more than 70,000 individual codes and requires knowledge of anatomy and chemistry. This is a significant increase in codes and complexity from the existing ICD-9, which has less than 20,000 codes.
Practitioners are well aware that if they train their staff on ICD-10 too far in advance, the staff will then have many months of using ICD-9 again before ICD-10 goes into effect. They will end up forgetting much of their training in the new system before it even goes into effect.
This logic appears to be a collective realization in the medical world. The firm Medical Group Management reported in July that only 4.8% of doctors made meaningful progress on getting their staff up to speed on ICD-10. Everyone has deliberately been waiting as long as possible.
The issue of cost is not a reason for the delay. ICD-10 has been mandated by the HHS such that health care providers will be forced to pay for this upgrade at some point in time prior to October 2014. Their goal is to simply make sure that the process is as smooth and efficient as possible. But clearly no one will want to miss the October 2014 deadline even by one day. To do so would create serious problems with reimbursements from Medicare, Medicaid and private insurers.This means there will be a massive rush in training that should have just begun in the last few weeks. With ICD-10 coming into effect in October 2014, the natural start date will have been just in advance of October 2013. The recent letter from CodeSmart management indicates that the rush has already begun, but it began after the filing of the last 10Q. Very few people are aware of the recent surge. Common sense shows us why practitioners have waited until the last minute to begin training their staff. It is the only logical thing to do in the real world. But investors who fail to grasp this will end up missing out on a very obvious opportunity. CodeSmart has been largely overlooked by Wall Street. As a pre-revenue company, the stock still trades as if it were a risky biotech company whose revenue hinges upon uncertain external events such as FDA approvals. But with CodeSmart, the revenue model is quite simple and low risk, in my opinion. The groundwork has been laid for months to take advantage of demand that is already there. Now that the CEO has assured investors that revenue is flowing in, the only thing that remains is to quantify it in the 10Q. This catalyst is just around the corner.
At the time of publication, Pearson was the author was long BZNE.OB and ITEN.OB. This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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