3 RCM metrics practices should keep an eye on, to be ICD-10 ready!

Preparation for ICD-10 transition has been one of the most troublesome periods for the healthcare industry in 2015. Now, with less than a month left till Oct 1, healthcare institutions and physicians have a new issue to be worried about: Despite all their efforts, will their practice be able to survive the ICD-10 hit?

Industry experts and CMS have repeatedly advised institutions and private practices to start saving revenue as the ICD-10 Implementation may lead to a six month dark period of increased claim denials and revenue loss. There is no confirmation that this dark period will stay limited to six months. Experts even hinted that this dark period might be the end for some practices that are not financially strong yet, to withstand the ICD-10 hit.

This brings us to the next question that you might be thinking of right now: Is there any way to guarantee the survival of my practice in this dark period? There is no certainty that your practice will not suffer enough from the ICD-10 hit, but yes, there are some measures you can follow to ensure that your practice manages to last in the long run. Following are some metrics that can help you determine how prepared your practice is to take on the ICD-10 hit:

1. Preparation costs

As we already know, the new coding system will have a significant impact on different areas of operations for healthcare institutions, including clinical analytics, data warehousing and Revenue Cycle Management. The ICD-10 preparation phase has been so lengthy and complex that it has been hard to keep track of the various costs that have been implemented by the practice or institution. These costs vary from a few thousand to several million in different major areas of implementation, like EHR and software upgrades, ICD-10 pre-testing, staff training, clinical documentation etc. It will be a wise decision to keep track of each of these costs in order for the institution to understand where the money is being excessively spent. Being well prepared for ICD-10 is a plus point for all practices, but doing so while wasting practice revenue down the drain can financially affect the practice at a later stage. This metric will be well effective for small practices that have limited finances and need to spend considerably on every step, while preparing for ICD-10.

2. Coder productivity

Although complete and detailed clinical documentation is necessary for claim accuracy, coders play the key role in the successful submission of a claim. No matter how much effort a physician puts in his documentation, the practice cannot show productivity if the coder handling the claims is inexperienced. On the other hand, if the coder is experienced but is forced to spend additional time on rejected claims because of inaccurate ICD-10 codes or incomplete documentation, the productivity of the practice will be affected. All healthcare organizations require a balanced claim processing cycle to continue showing improved productivity, the chances of which are less post ICD-10. According to experts, all healthcare organizations and private practices can expect a 60 percent drop in their productivity during the dark period post ICD-10 implementation. The productivity decrease will end soon for practices that restore their claim processing cycle and have experienced coders to lower the Claim Denial rate. However, there is no telling how long the other practices can survive without a steady claim processing cycle.

3. Claim Tracking

The third metric that all practices should follow is the number of claims that are processed and the first pass claim rate. According to a report, an average claim spends at least 35 – 40 days in Account receivable (A/R) and 35% practices get a first pass claim rate of just 70 to 80 percent. As we already know, claim denial rate is expected to increase tremendously post ICD-10 implementation and reduce productivity by 60%.

By regularly observing the claim acceptance and denial rates, practices can better understand their revenue cycles and identify any hidden loopholes. Repeated end-to-end testing with payers can further help practices in making sure that they are including all the necessary claim elements, according to the ICD-10 standards. 

CMS has already taken some measures to counter the mysterious dark period post ICD-10 implementation, like introducing the one-year Grace Period. However, these measures can only delay the expected outcome. To safeguard the future of their practices, physicians should start putting these metrics to good use and develop strategies accordingly, to ensure the survival of their practices in the long run.

3 Specialties Facing Important ICD-10 Code Changes

ICD-10 implementation is confirmed to take place on October 1. Any remaining hopes for further postponing of the new coding system have completely vanished by now. While this may appear as good news to some people, October 1 is actually a deadline for all physicians and medical practices to complete the training and testing phase of their ICD-10 conversion plan, in order to avoid Penalties from CMS. 

ICD-10 training and testing is not all that medical practices must prepare for before October 1.

Physicians must be ready to face some major drawbacks of ICD-10 that will hit Medical Practices hard in the first few months like slowed productivity, reimbursement in capabilities and stalled cash flow. ICD-10 codes transition is another important negative aspect that will affect practice Revenue Cycle Management of various medical specialties. Some medical specialties will be facing more difficulty in transition as compared to others, not just because of the increase in number of codes but other variations in the coding structure as well. Some of these specialties are as follows:

1. Cardiology

Cardiologists will not only have to trouble themselves with learning additional and specified codes for every diagnosis, but also interpret the actual definition of the statement. Some diagnoses have undergone definition changes in the new coding system. For example, the acute phase of myocardial infarction originally lasts for 8 weeks in ICD-9, but is being reduced to 4 weeks in ICD-10. Some diagnoses of ICD-9 are not mentioned in ICD-10 either. Like for example, the ICD-9 code 410.00 of “an unspecified episode of care” for AMI of the anterolateral wall, when converted to ICD-10 becomes I21.09, which does not address episode of care at all. Similarly, some diagnosis that required two separate ICD-9 codes, have been converted to one ICD-10 code. These changes make it all the more difficult for cardiologists to be Ready for ICD-10 before the deadline.

2. Neurology

The neurologists are in no better situation. According to the American Academy of Neurology, neurology diagnosis codes have entered a whole other level of complexity in ICD-10 coding system. For example, the new ICD-10 code for Alzheimer’s disease is G30.9, when converted from ICD-9 code 331.0. After that, ICD-10 further specifies Alzheimer’s disease in 3 different ICD-10 codes: G30.0 for Alzheimer’s disease with early onset, G30.1 for Alzheimer’s disease with late onset and G30.8 for Other Alzheimer’s disease. Similarly, CMS provides 10 addition ICD-10 codes for Migraines, which originally had only one ICD-9 code, 346.90.

3. Pediatrics

Like the former two medical specialties, pediatricians must also be prepared to deal with an upcoming large collection of complex codes for various specified diagnosis. In ICD-9, bronchiolitis has only one code (466.11) while in ICD-10 it is specified in two different diagnoses, RSV (J21.0) and human metapneumovirus (J21.1). A common ICD-9 code 774.6 (for unspecified neonatal jaundice) when converted through the ICD-9 to ICD-10 converter, will become P59.9. This is a code for a specified jaundice diagnosis.

The new complicated variations in ICD-10 coding system will be quite a challenge for physicians to learn in such a short time. Even if physicians and billers do manage to adjust to the new coding system, the probability of them making errors in patient documentation and claim processing will still be very high in the first few months post ICD-10 Implementation. The new coding system regulations make it compulsory for physicians to mention the specified diagnosis in their documentation and not to miss any detail, because according to the popular ICD-10 phrase; “If it isn’t documented, it didn’t happen!” 

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What impact will ICD-10 have on your practice?

ICD-10 is expected to be implemented on 1^st October, 2015. Despite how far it sounds, providers are running short of time to prepare their practices for the new coding system. In contrast to the existing ICD-9 coding system, ICD-10 is much bigger.

All the coding experts who are well versed with ICD-9 codes will have to go through training for the new coding system from scratch. The latest version of ICD-10 contains over 68,000 codes, as compared to the 13,000 ICD-9 codes. However, it is not necessary to memorize all these codes, especially for small and medium sized physician groups, who should only be concerned with codes related to their particular practices. The major impact of ICD-10 will be on the following key areas:

1.     Financial sustainability

CMS experts are of the view that a decrease in cash flow and revenue will follow the implementation of ICD-10. They have predicted that claim denial rates could increase by 100 to 200 percent and revenue of healthcare organizations could witness declining payments for at least two years post implementation. Pershing Yoakley & Associates, P.C (PYA) identified seven key areas of the continuum of revenue cycle management that organizations must focus on to Prepare for ICD-10. These include updating and testing IT software, adjusting account receivable reserves, preparing for future delayed payments, and keeping track of expected denials.

2.     Workforce

Arrival of ICD-10 will not only be troublesome for coders, but for office staff as well. Preparation for ICD-10 can indirectly affect front-end tasks like patient scheduling, pre-certification, pre-registration and case management functionality. So other than coders, office staff must also be well-educated and trained to deal with the new coding procedures. 

3.     Provider and Vendor Readiness

Although the implementation date for ICD-10 was announced a long time ago, some providers are still stuck in the planning and strategy implementation phase of ICD-10. Moreover, there are others who have not yet established their ICD-10 budgets. Vendors on the other hand are also exposed to a high level of risk when it comes to ICD-10. Providers must ensure that their vendors have upgraded their IT systems and trained their workforce to be ICD-10 ready. Failure of vendors to be prepared for the new coding system is an indication that providers need to look for a new vendor who is capable of meeting their needs.

With so many issues, you’re probably wondering ; why go through the hassle of implementing ICD-10 for your practice? Michael Wilson, Chief Executive of Healthcare information Management (HIM), said that the new ICD-10 diagnosis and procedural codes will lead to accurate payment of new and better procedures, improved administrative performance and enhanced patient care. Other benefits for providers after the twoyear trouble post ICD-10 implementation will be greater efficiency, fewer fraudulent claims and more accurate reimbursements. 

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Is the clash with ICD-10 unavoidable?

October 1, 2015 is the date when healthcare providers must switch from the existing ICD-9 codes to the new and improved ICD-10 code set. The changes seem so extreme that many doctors are still unsure if they’ll be able to adhere to the transition without significant revenue losses.

The change

The existing ICD-9 codes are approximately 17,000 in total, while the updated ICD-10 codes will exceed 155,000 and preparation for these will not only require excess knowledge, but also significant amounts of training and efforts. If your practice is unable to understand, follow and execute these diagnosis-based codes into its workflows in time; you will lose out on a lot of money through Claim Denials and Rejections.

Come October, you will not be allowed to send out claims using ICD-9 codes; you will instead require completely new ones for ICD-10. So how will they differ from the ones in ICD-9? First of all, they will be extremely specific and more comprehensive. That will be in the form of additional sub-codes for each diagnosis and procedure applied. Additionally, the format of ICD-10 codes will differ from their counterparts in ICD-9, and they will have to be learnt all over again.

Workflows at your practice could be disrupted as learning relevant codes from an option base of 155,000 will be no simple task.

What’s important?

On the HealthIT front, your Electronic Health Record (EHR) and Practice Management (PM) solutions will play a big part.  Their vendor’s readiness will be extremely crucial. A foolproof plan for mapping and the actual conversion, options for training, and the availability of software upgrades will be the most important factors.

Now even with a web based EHR and a PM ready for the conversion, there’s still the training of your staff that needs to be handled. Are you looking to hire a ICD-10 team, depute a ICD-10 champion at your practice, or outsource your medical billing? Even then, who will train your nurses, physicians and support staff, and will they be ready before time?

The clash is unavoidable, and preparation is the best way to meet the challenge!