The transition to ICD-10 on October 1, 2014 will have a profound impact on the healthcare industry. The benefits of such a transition are many; to include improved clinical reporting and potential increased revenue generation as submitted claims data will be far more specific than what is generated today. As an industry, there has been a huge emphasis on physician documentation and coder education to ensure that the appropriate ICD-10 code is selected, populated in the electronic medical record and billed. Plans are in place to begin the process of “dual coding” in an effort to proactively address the trouble spots; orthopedics and cardiology immediately coming to mind given the bilateral nature of limbs and arteries. IT systems are being evaluated to ensure that any reference to ICD-9 is programmed to support ICD-10 nomenclature and payer contracts are being reviewed to ensure that any contract language related to ICD-9 is replaced with ICD-10.
The above initiatives are critical as you make your preparations for ICD-10. But what about your revenue cycle? Have you considered the concept of “Revenue Neutrality” as you march toward the compliance date for ICD-10? What are you doing to prepare for the potential increases in claims edits, payer denials, and accounts receivable? Batten down the hatches. The ICD-10 tsunami wave is coming. How significantly the wave will affect your organization is not yet known but the prediction based on a study published by WEDI (Workgroup for Electronic Data Interchange) is that your accounts receivable may increase by 20% – 40% and your denials may increase 100% – 200%!
In an effort to minimize the impact of ICD-10 on your revenue cycle operation, immediately begin to assess your current processes from the beginning of the revenue cycle to the end. Many organizations place their focus on the coding team and fail to assess other critical revenue cycle functions that may be impacted. Flowchart your work flows to identify all areas where diagnosis coding is required. If you have pain points now they will undoubtedly be exacerbated with ICD-10.
The following list identifies just a few of the Revenue Cycle areas that you need to consider:
- Will all of your IT systems and any vendor systems utilized be updated from ICD-9 to ICD-10?
- Are ICD codes required during your registration or scheduling process?
- Will your scheduling and registration systems accommodate the extended length of the ICD-10 code?
- Will your medical necessity process accommodate the length of the ICD10 code?
- Will there be any prior authorization concerns?
- Will your physicians be able to order ancillary tests by providing the proper ICD-10 code?
- Will your claims scrubber vendor be fully compliant and able to test ICD-10 claims months prior to the implementation?
- What is your current denial rate? Do you understand the root cause of these denials? Pay close attention to denials related to Medical Necessity as these types of denials are bound to be impacted by the ICD-10 implementation.
- Focus on improving all key performance metrics now. Close and bill encounters in a timely fashion. Reduce your claims edit rate and work your accounts receivable to ensure that you are able to manage any increases that occur upon implementation.
- Develop dashboards to measure these metrics now and post ICD-10 to ensure you are reaching your revenue neutrality goals.
- Document your ICD9 to ICD10 boundary Cutover Concerns and develop plans to address them.
In summary, the transition to ICD-10 will affect just about every facet of your organization. As with any major change, developing a plan that includes revenue cycle preparedness is the key to realizing the benefits of the implementation in years to come.
Reference from Workgroup for Electronic Data Exchange White paper Impact Assessment