D'Arcy Gue

2015: Heed the Urgent Call of ICD-10!

April 27, 2015

ICD-10 6 Minute Read

Get your head out of the sand. Not to be impolite, but — it’s finally time to pay serious attention!  ICD-10 is happening this year.

ICD-10 is hard.  There… we said it.  Every ICD-10 implementation manager knows it. HIM Directors  know it. The problem is, people who aren’t ICD-10-savvy (which definitely includes many hospital C-suite executives) don’t know it.

Replacing both diagnosis and procedure codes simultaneously, especially considering the extreme expansion of both code sets, makes for a seismic healthcare industry change never before attempted.  If your organization is not well along on its ICD-10 implementation program, you will find it to be complicated, and a lot of work. So, spit out the sand — you only have 5 months to get ready!

heads-in-the-sand-croptBetween the challenges of undertaking such a major change, significant resource constraints, and multiple ICD-10 deadline delays and rumors, many providers have waited…and waited…to take on a full-blown, organization-wide implementation effort. But, it’s not 2014 anymore:

  • Unlike last year, CMS has conducted successful end-to-end testing with providers.
  • Unlike last year, Congressional hearings concerning ICD-10 have been held, and the consensus was that it should go forward.
  • Unlike last year when an ICD-10 delay was slipped into the annual SGR fix, this year, SGR was finally fixed for good, and it happened without any language about delaying the deadline again. Physicians are happy with the final reimbursement fix after many years of worry, and aren’t insisting on another bone-tossed ICD-10 delay anymore.
  • Bottom line, the long-needed move from ICD-9 to the world standard of ICD-10 coding, which has been inevitable, no longer presents obstacles that propelled delays. The latest deadline of October 1, 2015 is the last deadline. The industry has seen voluminous information supporting this statement, and heard nothing to the contrary, either from Congress or CMS.

For provider organizations that have used the head in the sand strategy successfully in the past, the winds of progress have blown this option away, and it’s time to pay attention. The five months between now and October 1 will prove to be short.

For many organizations, revenue cycle impacts should be at the top of the C-suite’s worry list. ICD-10 is risky business for your organization’s revenue cycle. This risk is most likely to bite you three ways:

  • You may not be able to handle the impact of ICD-10 on productivity, on the front end of the revenue cycle, as coding staff copes with the new regimen and providers are presented with an increased number of returned charts requiring additional documentation.
  • Because of unforeseen issues in IT or within the payers’ arena, you may not be able to get paid for any (or enough) claims to keep your facility financially healthy.
  • You may not be able to manage the impact of ICD-10 on the back end of the revenue cycle, if the increase in denials overwhelms the business office, coding and other staff with rejected claims.

If your organization hasn’t done extensive assessment and remediation work, the greatest risks at this moment center around potential issues you don’t know about:

Priority one is to ensure all your billing systems can handle ICD-10 claims. This isn’t simply a matter of having the correct version number. Other factors such as interfaces, business rule design, and query & report design can have significant impacts on the capability to successfully submit claims and manage the business of running the hospital.

How do you ensure that you can submit claims? Testing! We’ve written about testing extensively but the short version is this:

  • Test in as close to real conditions as possible. A compliant billing system is of no value if you can’t pass charges to it.
  • Acknowledgement test with all your payers and clearinghouses.
  • End-to-end test with any payer you can convince to do so. Medicare is still open for test partners.

Ensure your HIM department can handle the coding challenges ahead:

  • Provide adequate training for coders as soon as possible (and make sure you have enough coders). Training requires at least 80 hours for each coder.
  • Allow time for extensive coding practice, because coders will need to develop a rhythm, and become confident with ICD-10’s very detailed coding. If they practice with live charts, data will be generated simultaneously on the documentation and on how coding will impact revenue.
  • Be ready for a productivity hit; the expectation is that initial productivity will be half that of your ICD-9 coding environment. This means that twice the coding hours will be needed to complete the day’s charts. Over the long term, coder productivity is not expected to get better than 80% of ICD-9 productivity, without computer assistance. Plan for that eventuality.

Evaluate and act on the workflow impacts in all departments. The impact of ICD-10 on departments and staff outside of HIM continues to be poorly understood in many organizations. In some ways, this lack of awareness could become the greatest source of ICD-10-related dysfunction beginning October 1. Departments that will be especially affected include:

  • Scheduling/Pre-authorization
  • Registration
  • Patient Accounts
  • IT and data analytics personnel
  • Physicians and other documenters
  • Revenue Cycle personnel

Train everyone who will be impacted early enough that they can practice where feasible, and have time to receive follow-up mentoring or other reinforcement.

Look carefully for procedural issues – many facilities have procedures that require responding to an ICD code, particularly in patient accounting. Also, consider the impact on process productivity – if even 5% of patients come from their physician offices with ICD-9 coded orders for testing, registration will quickly become overwhelmed.

Pay special attention to documentation improvement, and provide (require!) training for physicians and other documenters to ensure that they will provide sufficient detail to enable accurate ICD-10 coded claims. It is expected that one of the main obstacles to smooth claims processing may be inadequate documentation; in such cases, payers will return the claims to get the needed detail, thus slowing down the entire claims process.

If yours is a hospital organization, help community physicians with whom you interact to ensure that they will be able to provide you with ICD-10 compliant diagnoses and orders. We recommend strongly that you read our recent ICD-10 Monitor article that outlines strategies to meet this need.

Perform aggressive revenue impact contingency planning.   Claims submission failures will escalate quickly to large revenue losses, but denials, claims interruptions, and lowered productivity can cause fatal financial bleeding too. Acknowledge and analyze all potential revenue risks objectively; the less “comfortable” you are with your organization’s readiness, the more critical this mitigative process will be.

CMS’ dire prediction (supported by many industry leaders) is that ICD-10 will initially result in a decrease in cash flow and loss of revenue that may take up to two years to resolve. Denial rates are expected to increase by 100% – 200% post-implementation, with an increase in A/R days by 20% – 40%.

Many facilities are taking a multi-faceted approach to conserving cash in advance of the transition date, including:

  • Delaying capital projects
  • Sales of existing accounts receivable
  • Establishing lines of credit
  • Staffing for productivity impacts early, and using the extra personnel to work down existing accounts
  • Negotiating contingency payments from payers

Finally, consider qualified, third party management of your ICD-10 efforts. Admittedly, this suggestion may be seen as self-serving. However, if you do not have a strong leader with personal experience with the ICD-10 implementation process, who can pull the pieces of this organization-wide effort together — you may find that external expertise is a necessity. Many hospitals have learned this, and more are discovering it every day.

Contact us (soon!) if you would like to understand and consider the ICD-10 support services we can provide.

Regardless, stay tuned to our HITpoint blog for more educational support and ICD-10 news. Also, take a few minutes to see how our many knowledge resources here may be helpful as your organization moves forward into its ICD-10 future.


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