August 2016

himagine

Perspectives

This publication marks the inaugural edition of himagine Perspectives. We have developed this newsletter as a quarterly touchpoint with the hope of creating more awareness of our company and its solutions while strengthening our partnership. Through discussions with several of you over the course of the past 24 months I came to the realization that many of our clients are not aware of all the ways we can help you overcome the challenges you face. My goal is that this newsletter will help bridge this gap.

Since our company launched in 2014, we have seen a number of sweeping changes in the industry and now is a particularly interesting time for healthcare providers. Although we transitioned to ICD-10 over ten months ago, we are just beginning to experience the wake of its impact. Decreasing productivity was the initial concern for many providers, but since that time, a new challenge has emerged: accuracy and reimbursement. According to data compiled by RemitDATA, Q4 denial rates have increased substantially since the beginning of the year.

Quality medical coding is crucial to a healthcare provider’s bottom line. Quality coding ensures that claims are paid upon the first submission, resulting in faster reimbursement. Unfortunately, the momentum of increasing denials will not stop here. Accuracy will become a greater concern in October when the continued expansion of the ICD-10 code set takes effect when the partial freeze on updates implemented by CMS is lifted. This expansion will introduce another 1,900 diagnostic codes, 3,651 inpatient procedure codes, and 487 revised code titles. Come October 1st 2016, our industry will again experience sweeping changes and we must prepare for the impact. If productivity and coding errors are not addressed on the front end, denials will continue to increase and revenue will suffer. With health-care reform driving an increased demand for medical services, it is important that providers prepare to keep up with chart volume and productivity impacts stemming from the looming updates to the existing coding set. Additionally, the less visible impact will be on proper reimbursement. A claim might not be denied but it might not be optimally reimbursed. continued...

Types of Service Level 1

Tests

Exceptions/Unclassified

Procedures

Other

Durable Medical Equipment

Imaging

Evaluation and Management

• Q4 Denial Rate as of 1.15.16 • Q4 Denial Rate as of 2.22.16 • Q4 Denial Rate as of 3.15.16

0% 8%4% 12% 16%1% 9%5% 13% 17%2% 10%6% 14% 183% 11%7% 15% 19%

A Message from himagine CEO, Michael DiMarco

We recognize the impact that data accuracy has on a provider’s bottom line. We continue to believe that managed outsource solutions deliver the best result for providers. As such, we aim to positively impact your facility and drive reimbursement in 2016 by providing innovative and cost-effective outsourcing solutions. Pre-ICD-10, we launched our managed coding solution, Enterprise HIM, which positively impacted quality scores resulting in an average of 98% for our clients over the past year. Now, with changes again on the horizon, we are implementing strategic approaches to auditing and continuing education that you can read more about in this issue of our newsletter.

As the industry evolves, we plan to evolve with it. By seeing the broader picture and thinking ahead, we are able to proactively prepare for whatever comes next. Together we have succeeded, and will continue to succeed. On behalf of our entire organization, I would like to thank you for your partnership and commitment to driving data accuracy while delivering quality care to those that need it most. I look forward to continuing to work with you this year and beyond.

I value your input, and as always, I am only an email away. Feel free to reach out to me directly at mdimarco@himaginesolutions.com.

A Message from himagine CEO, Michael DiMarco continued...

Traditional coding and compliance audits are typically episodic in nature and only focus on the score, not on the improvement in results. They may occur more than once per year but the coders or charts being audited are not typically re-evaluated. In other words, repeat audits of the same coder and same type of charts are not performed. When audits are episodic, coding errors are often overlooked and repeated, increasing the possibility of claim denials that delay reimbursement for providers. Exacerbating this issue is that accuracy issues are generically identified and lack much needed specificity to truly diagnose where the coder needs development. Further, auditing a new coder in order to establish a baseline enables immediate intervention driving faster performance improvement.

We believe there is value in a solution that combines traditional auditing and targeted education with technology that enables the auditor to hyper target coding accuracy. Taking this approach will result in improved coder performance over the long term.

This belief is what drives our approach, which we call Coder Performance Improvement (CPI). CPI is a continuous, four step audit cycle designed to drive performance improvement by providing real-time and highly specified insight into the performance of coders, working directly with the coder to correct errors, and re-evaluating the coder until the desired improvement is achieved and sustained.

Beyond the Traditional Compliance Audit: Optimize Revenue with Coder Performance Improvement (CPI)

Review

Assess

Educate

Report

01

02

03

04

This process includes:• Reviewing select coder

charts monthly• Assessing compliance and

revenue based optimization• Reporting assessment results

and recommending a development plan

• Coaching coders on identifiedissues and opportunities

Below is an example that illustrates the granularity of auditing and how our proprietary audit technology allows us to pinpoint specific accuracy issues. In February Procedure Code Accuracy was relatively lower vs. other categories. Procedure Errors are further stratified into PCS code components to provide further granularity and assist in developing corrective education initiatives.

Inpatient Detail Accuracy Trending Procedure Error Breakdown

101.00%

100.00%

99.00%

98.00%

97.00%

96.00%

95.00%

94.00%

93.00%

92.00%February

100.00%100.00%

99.00%

96.00%

95.00%

MS-DRG Accuracy

Diagnosis Code Accuracy

Procedure Code Accuracy

POA Accuracy

Discharge Disposition Accuracy

Incorrect RootOperation

8%

Incorrect Body Part

8%

IncorrectQualifier

8%

Laterality34%

Incorrect BodySystem

25%

Incorrect Device17%

Beyond the Traditional Compliance Audit: Optimize Revenue with Coder Performance Improvement (CPI) continued...

Facilities that make the strategic decision to implement a continuous audit process such as CPI, which focuses on ongoing coder performance, can more readily address compliance issues and deliver significant financial upside by identifying and correcting missed reimbursement opportunities.

This more frequent and robust audit process has already begun making significant impacts. One of our clients recently achieved a 10:1 return on investment (ROI) after 6 months of implementing CPI, reducing their annual missed reimbursement from an estimated $1,100,000 to $165,000.

You can read more about CPI in our case study entitled “The Impact of Coder Performance Improvement (CPI)” If you are interested in receiving a complimentary assessment to determine if CPI can help address your needs, please contact Jeff Lewis, our Senior Director of National Compliance, at jlewis@himaginesolutions.com.

himagine Preceptorship Managing Talent in 2016 and Beyond

While the initial adaptation to ICD-10 has subsided, it will not be long before the continued expansion of the ICD-10 code set takes effect. These changes, along with increasing demand for healthcare services, unfavorable coder demographics, and the strong demand and limited supply of higher value coding resources will continue to cause operational and cost challenges for facilities. ICD-10 monitor recently reported that 6,000 HIM professionals are needed each year to replace retirees yet only 2,000 students are enrolling annually in HIM programs.

In the wake of these challenges a consistent theme we hear from our clients is the need address overall coding costs with a strong desire to insource as many coding resources as possible. himagine has made a conscious decision to explore ways to support providers in this endeavor while continuing to address their ongoing outsource needs.

The rationale for a novel approach to managing coding resources is compelling. As the largest provider of HIM outsource services in the country we have a unique perspective in this area.• Recruiting coders is challenging. himagine data suggests that it

takes 100 candidate connections to yield 1 hire.• The market is currently saturated with less qualified coders while

the highly skilled are heavily recruited by multiple sources offeringattractive packages.

Given these realities we made the strategic decision to invest in a program that would develop newly credentialed and less experienced HIM professionals into fully productive coders based on the specificneeds of our client partners. This program is called Preceptorship. The word “preceptorship” is defined as a period of time in which two people

{Preceptorship}

himagine Preceptorship Managing Talent in 2016 and Beyond continued...

work together so that the less experienced person can learn andapply knowledge and skills in the practice setting with the help of the more experienced person. We chose this term given its symbolism with our overall approach which includes:

• A learning plan delivered through a combination of instructor leddiscussion, self-study, practice coding, and ongoing testing.

• Flexible length programs that vary based on the experience levelof the coder (newly credentialed or 1-3 years) and complexity of thecoding environment (level 1 trauma facility vs. community setting).

Preceptorship provides quality coder resources at a fully transparent monthly fee model. Facilities will have the ability to convert these

resources to direct hires at the end of the defined period at lowerthan market wage rates and for no transfer fee.

Our Preceptorship Program has been immensely successful. So far, we have hired 60 employees into the program, all of which were ER coders who have graduated to outpatient and inpatient coding. This program is a win-win for himagine and our clients – it allows us to retain and invest in our employees internally, while offering reduced bill rates for our clients.

If you are interested in learning more about our Preceptorship program, please contact jhammerman@himaginesolutions.com

{Webinar}

Webinar

On June 2nd, we partnered with Xtelligent Media for a live webinar event. The webinar titled “Debunking the Myths of Outsourced Coding: How BJC Changed its Coding Paradigm and Achieved Superior Results” provided insight on how a managed coding solution can lead to better financial results for providers. We were pleased to have BJC Vice President of Revenue Cycle Management, Tracy B. Berry, presenting for the webinar.

The webinar, which is available for recast, had several objectives. Our aim was to provide attendees: • A better understanding of the market dynamics facing the coding

market and their potential impact on their facility• Examples of how the traditional staffing model for outsourced

coders ultimately leads to a suboptimal result for hospitals• A provider’s perspective on the challenges associated with

managing a scaled team of internal coders along with a quantifiedperspective on the associated costs

• Examples of how a strategic partnership with a credibleoutsource provider can address these challenges and lead to abetter financial result

If you were unable to join us for the live webinar, we invite you to watch the recorded webinar here.

Upcoming Schedule of Events

Representatives from himagine solutions are scheduled to attend the following events.

TCAA October 2 – 7 ..................... San Diego, CAAHIMA October 15 – 19.............. Baltimore, MD

Reimagine Healthcare.3109 W. Martin Luther King Boulevard, Suite 650

Tampa, FL 33607 • 866-230-7865