ICD-10 & PATIENT FINANCIAL SERVICESStacey L. Harper, RHIA, CPC, CPMA

Senior Manager, WeiserMazars LLP

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Agenda

Introduction ICD-10 Overview Impact of ICD-10 to Non-HIM Areas Hidden Costs for ICD-10 Transition Preparing for the Transition

ICD-10 Overview

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What is ICD-10?

ICD-10 is a diagnostic coding system implemented by the World Health Organization (WHO) in 1993 to replace ICD-9, which was developed by WHO in the 1970s. ICD-10 is in almost every country in the world, except the United States.

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Introduction to ICD-10

ICD-10 is the new coding set that replaces the current set, ICD-9

ICD codes are used to assign diagnosis and procedure information to claims in order to generate reimbursement

ICD-10 is the biggest change in standard coding systems in over 30 years

Deadline for compliance:

October 1, 2014

Diagnosis Procedure

13,000 11,000

69,000 72,000

Conversion from ICD-9 to ICD-10

(Approximate number of codes)

ICD-9 ICD-10

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Implementation on October 1, 2014

ICD-10-CM: Diagnosis coding Used for inpatient and outpatient Used by providers, coding and other

clinical/operations staff

ICD-10-PCS: Procedure coding Used for inpatient only Used primarily by coding CPT© codes will continue to be used for

outpatient procedure coding

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ICD-9 vs. ICD-10

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ICD-9 vs. ICD-10

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ICD-9 vs. ICD-10

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ICD-10 Procedures

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Key Notes on the ICD-10 Transition A substantial percentage of ICD-9 codes do not map one-to-

one to ICD-10 codes; this requires human intervention to determine the correct code

The codes do not map the same ‘forward’ (ICD-9 ICD-10) as they do ‘backward’ (ICD-10 ICD-9)

Although CMS has published a translation tool, it has left the specific determinations up to each of the individual payers to derive how to interpret the codes and the mapping

DRG reimbursements to Hospitals are based on ICD-10 groupings and will change

The code change effective date is based upon discharge date; consequently, there will be a large window (~3 years) in which both ICD-9 and ICD-10 codes will need to be accepted (dual processing)

Source: HIMSS Virtual Event 2011

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Benefits of ICD-10

Greater coding accuracy and specificity Higher quality information for measuring

healthcare service quality, safety, and efficiency Improved efficiencies and lower costs Reduced coding errors Greater achievement of the benefits of an

electronic health record Recognition of advances in medicine and

technology

Source: HFMA

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Benefits of ICD-10 (cont.)

Alignment of the US with coding systems worldwide

Improved ability to track and respond to international public health threats

Enhanced ability to meet HIPAA electronic transaction/code set requirements

Increased value in the US investment in the SNOMED-CT

Space to accommodate future expansion

Source: HFMA

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Specificity looks like this…

One-to-Twenty-Four Mapping

ICD-9-CM

821.01

(Fracture, femur, shaft, closed)

ICD-10-CM

S72.301AS72.301GS72.302AS72.302GS72.309AS72.309GS72.321AS72.321GS72.322AS72.322GS72.323AS72.323G

S72.324AS72.324GS72.325AS72.325GS72.326AS72.326GS72.331AS72.331GS72.332AS72.332GS72.333AS72.333G

S72.326A Nondisplaced transverse fracture of shaft of unspecified femur, initial encounter for closed fracture

S72.326G Nondisplaced transverse fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing

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Key Areas of Impact

Source HIMSS Virtual Event 2011

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How does ICD-10 affect your facility?

Every claim generated by each facility will be affected

Payer contracts will require review

Improved documentation will be required to support coded claims

CLAIMS Numerous

information systems will require remediation prior to go-live

Includes core billing systems

Each system change will require testing and training by IS and the end-users

Thousands of staff directly impacted by change

Clinical providers, coding & revenue cycle staff will require in depth training

Staff will need to be involved in integrated testing of system changes

The majority of payors in the nation will be required to convert to ICD-10

Payer systems will require updates and testing

Other vendors are also affected by the change (i.e. registries, clinical outcomes data)

SYSTEMS

PEOPLE VENDORS

This coding change affects the entire Health System including revenue cycle, medical operations, payers and other vendor contracts and a significant number of information systems

Impact of ICD-10 to Non-HIM Areas

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Who Needs to Understand ICD-10? Beyond coders…

PFS leadership as payers may reject based on ICD -10 coding and medical necessary codes

PFS leadership and contracting to ensure contracts can accept both ICD-9 and ICD-10 on the UBs post go live

Utilization review and all care management as payers will need to be able to do pre-certifications and concurrent review with ICD-10

Decision support and all areas using ICD-9/10 coding for tracking, reporting, etc. (Trauma registry, outcome comparisons, contracting, etc.).

IT leadership must be involved to ensure all impacted areas are ready

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Other Non-HIM Uses for ICD-9/ICD-10

Reimbursement by payers Medical necessity screening Quality of care indicators Outcome measurements Medical care review Method to index medical records Storage and retrieval of dx data

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Other Non-HIM Uses for ICD-9/ICD-10

Utilization patterns and review by payers Research data Statistics Reasons for Denials Monitoring and analyzing the incidence

of disease and other health problems Identify health care trends Future health care needs

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Patient Access Impacts

Systems Core Financial System Eligibility Systems Patient Liability Estimation Systems Case Management Tracking

Workflow & Process Pre-authorization Admissions Preauthorization (278) & Eligibility (270/271) transactions ABNs Denials Management Policies, procedures and job descriptions that refer to ICD-9

functions

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Patient Access Impacts

Training PAS & Pre-Auth Professionals ICD-10-CM Basics

Resources Testing and training resources as needed to upgrade

affected systems according to IS plan Resources to participate in payor testing as necessary Pre-authorization backlog prevention plan Potential slow down with payor processes post go-live Evaluate and pursue educational seminars and

resources relevant to PAS; i.e., NAHAM, HFMA, HIMSS

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Patient Financial Services Impacts Systems

Coding/abstraction software Core Financial Systems Bolt-on Financial Systems Billing Clearinghouse Denials Management Systems Payment Variance Software Patient Liability Estimation Reporting Databases Case Management Software

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Patient Financial Services Impacts Workflow & Process

Integrated testing & planning with payors Potential for slower and lower collections

initially ICD code reports Changes in payor contracting language

around ICD-10 compliance and how it impacts claims

Denials Management Review & update policies, procedures, and

job descriptions as necessary

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Other clinical impacts

Authorization & notification – services and conditions that require prior/concurrent authorization or notification on September 2014 will need to be managed through transition

Utilization Management (UM) – services and conditions that a health plan seeks to engage in UM activities will need to be managed through and post transition

Post-Hospital Follow-Up Programs (i.e. CHF) – will need to be identified for effective outreach and case management through transition

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Other clinical impacts

Complex Case Management (CCM) – outpatient conditions requiring concurrent case management support need to be effectively identified and monitored through transition to ICD-10

Disease Management (DM) – strategies for identification and stratification for selection of DM programs will need updated for ICD-10

HEDIS Reporting, STARS ratings and accreditation documentation – these supporting data elements need to be captured without gaps and effectively measure historical trends

Hidden Costs of ICD-10 Transition

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Financial Impacts

Need to plan for decrease in productivity to prevent billing backlogs during training and initial implementation

Other countries, including Canada, have reported an increased number of days in coding turnaround in the immediate ICD-10 go-live period

Based on actual data from a large urban community hospital in Toronto Ontario Canada, staff productivity never rebounded to pre-ICD-10 levels for some patient types.

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Financial Impacts

New information demands to support the coding process could result in potential increases in Accounts Receivable (AR) days, increased rate of claim denials and lost/deferred revenue

AHIMA estimates that tertiary hospitals and hospitals with a varied case load will have a greater lag time returning to normal productivity than those hospitals whose case-mix range is relatively small and well defined as the staff are introduced to the wide variety of codes

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Potential Hidden Costs

Back log of uncoded claims with ICD-9 while trying to get coders ready for ICD-10. Remote coding may need to occur as well as OT.

Rejected claims from payers who are not ready to accept UB-04 with ICD -10 PLUS ICD-9 as necessary.

Vendor software rejecting ICD-10 or edits not working correctly thus slowing claim submission. Manual intervention to ensure claims are submitted and accepted.

New software if existing software for related ICD-10 work is not compatible.

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More Hidden Costs

Cost to conduct a ‘risk assessment’ to assess current documentation patterns for providers and care givers.

Cost to conduct training for providers and care givers on enhanced documentation

Cost to review EMR or other software to adapt to enhanced documentation requirements

Cost to conduct a ‘readiness assessment ‘ pre go live to determine readiness of coders, documentation and vendors.

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More ….

Loss of productivity – rebills, denials, rejections, EOB work, medical necessity rejections/follow up

Loss of productivity – excessive physician queries, coder slow down with new coding process

Growth in the discharged not final billed… Potential impact to the Case Mix Index Cost of implementing a clinical documentation

improvement program Cost of EMR changes and training of all impacted

staff Cost of any changes to the functionality of the any

software and training costs

Preparing for the Transition

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ICD-10 Goals: Organizing the Effort

Seamless transition to ICD-10(meet regulatory/payer requirements)

Maximize the benefits of ICD-10 transition

Support physicians

with implementati

on

Provide thorough

education & training

Enhance quality &

reimbursement outcomes

Leverage innovative solutions/

technology

Coordinate technology &

resource needs

IMPLEMENTATION APPROACH

Project Oversight Remediation Benchmarking & Monitoring

• Develop communication plans

• Develop direction, scope and outcomes of work stream teams

• Coordinate efforts & resources to ensure appropriate project progression

• Manage day-to-day activities and challenges

• Update and test systems

• Educate thoroughly; test and re-test aptitude

• Coordinate and team with payers

• Revise policies, procedures & workflows

• Develop monitoring tools and dashboards

• Determine benchmarks and post-live goals

• Measure, measure, measure, MANAGE

GOALS

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Billing Cycle

Coding Specificity?

Coding Issue

Resolved?

Claims

Denial?

Physician Documenta

tionCoded Data HIM Coding

Physician Query

DRG Groupers

Bill Creation

and Editing

Claims Submission

Bill Payment

Electronic Funds

Transfer

Coding Loop

Billing Loop

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Payer readiness

UB submissions with ICD-9 and ICD-10 - conversion dates

Denials with new reasons –as ICD-10 is far more specific

Contract language that addresses ICD-10 inclusions/exclusions

Claim scrubbers/payer scrubbers – ABN issues (LCD/NDC dx codes/CMS), ‘if ‘ rules, edits

Pre-authorization process/coverage

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Duality of Systems

Will payers, vendors (claim submission and scrubber) and other IT systems be able to handle ICD-9-CM as well as ICD-10-CM and ICD-10-PCS at the same time?

Rebills of pre-conversion, medical necessity software, scrubbers, ensuring all payers are ready to convert AND test with each payer = critical to the successful conversion.

Don’t forget all payers (Medicaid, Worker’s Comp, etc.)

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Considerations for PFS

Budget• ICD-10 training specific to PFS staff that falls outside of enterprise offerings

• References, books and tools specific to PFS for ICD-10

• Training time allocation for all impacted staff receiving ICD-10 training

• Staff time allocation for relevant system upgrades, i.e., testing applications, training, etc.

• Estimate additional hours for PFS staff for late 2014 and 2015 for the ICD-10 transition due to negative productivity

Business Associates• Confirm the ICD-10 transition plan for any affected third parties:

Denials & Appeals agencies Eligibility software Worker’s Comp Outsourcing for follow-up functions Bad debt & early out functions

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Considerations for PFS

Jobs & Competencies• Assess affected jobs and competencies across the Department

• Evaluate and estimate impact to PFS productivity/output for the initial stages of the transition

This area will be working in a 'hybrid' environment of ICD-9/ICD-10 initially

• Revise impacted job descriptions to incorporate ICD-10 skill set and knowledge base

Policies & Procedures• Review all existing policies and procedures for department to determine if any must be updated due to ICD-10

• Determine if any new policies and/or procedures need to be created as a result of the ICD-10 implementation

• Finalize all policies and procedures related to ICD-10

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Considerations for PFS

Reports & Data Extracts• Confirm all active ICD code

reports for PFS

• Understand implications to reports and data extracts for both internal and external reporting as applicable as a result of the ICD-10 transition

• Modify and test reports for the ICD-10 world

• Consider capabilities when needing to compare ICD-9 to ICD-10 state

Systems, Applications & Databases• Solidify ICD-10 upgrade and transition plan for all affected systems, applications & databases:

Core financial systems Interfaces Billing clearinghouse Reporting databases Eligibility software Case mix/DRG groupers Case management functions Patient liability estimation software Registries and external reporting

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Considerations for PFS

Payors• ICD-10 testing plans with payors should be underway or commencing shortly

• Develop payor report cards for pre/post-transition to compare metrics and performance

• Keep communication open during and post-transition

• Potential errors! Payors (including Medicare/Medicaid)

are correcting medical policies (LCD/NCD, etc.) which are diagnosis driven; this leaves potential for errors and gaps that will need worked out over time

Post Implementation Plan / Evaluation• Develop post implementation plan to evaluate the following items:

PFS staff adoption of ICD-10 education & transition to determine if and where follow-up training is needed

Outcome of transition regarding system changes and payor workflow

Revenue & reimbursement impacts Denials rates Outcome of transition with Business

Associates Budget impact

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Performance Monitoring

Monthly

Weekly

Daily

• Monitor physician discharge performance

• Monitor physician documentation weekly

• Monitor case mix weekly

• Monitor coder & biller efficiency weekly

• Monitor financial metrics (DNFB, A/R, Clean Claims Rate, Final Billed Not Submitted, Denials rates) daily

• Set up dashboards with drill-down capability to service line and payor

• Monitor revenue and reimbursement metrics by payor monthly

• Monitor case mix on a monthly basis

• Perform reimbursement service line reviews monthly

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Be prepared for…

Worst Case Scenario

•Create worst-case scenarios for Revenue Cycle impacts using forecasting to determine cash reserves to support revenue impacts for at least 12 months•Be prepared to have dialogue with payors regarding concerns over claims adjudication, denials rates, documentation requests and billing inquiries and claims rejections

System Issues

•No matter how thorough testing, be prepared for some health plans, external vendors or internal systems to be unable to accept ICD-10 codes•Be prepared to have someone in the organization “troubleshoot” problems to determine whether it is system, interface, coding, documentation or other external issue

Non-System Errors

•For the first 6 to 12 months, expect significant amount of human error related to coding, documentation, claims submission, adjudication and denials management•It is likely that there will be increased queries from coders for documentation and increased billing inquiries from health plans•Be prepared to assess aptitudes and swiftly retrain as needed

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Driving Success Through Education

Planning for Education Outline expected training and education requirements for

each user category and job code Include training content, various teaching methodologies,

and estimated timeframes for education roll-out Develop and roll out detailed training plan

Basic Users Clinical Users Documenters Super Users

ICD Code Utilization

Aware of codes and use them in some application; only require general understanding

More detailed understanding of codes and how they drive reimbursement

Document to support codes and may be involved in their selection

Involved in coding or auditing services, or the education and training of such items

Example Departments/

Roles

Patient Access, Scheduling, Registration, PFS, IS, Senior Mgmt.

Data Analysts, Research, IS (Clinical & Revenue Cycle), Quality, Mgmt.

MDs, Therapists, CRNAs

Coders, CDI, Registrars, Auditors, PFS

Level of Training Required

Minimal High-level Detailed & targeted Detailed coding & billing training

ICD-10 User Categories

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Education Timeline

Questions & Discussion

Resources

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AHIMA ICD-10-CM/PCS Resources ICD-10-CM/PCS Transition: Planning and Preparation

Checklist at www.ahima.org/downloads/pdfs/resources/checklist.pdf

A Top 10 List: Phase I – ICD-10-CM/PCS Implementation at www.ahima.org/icd10/preparing/aspx

Audio Seminars & Online Courses http://www.ahima.org/ContinuingEd/

Communities of Practice http://cop.ahima.org/ Conferences & Events http://www.ahima.org/events/ ICD-10 Page www.ahima.org/icd10 Web Store www.ahimastore.org

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Other Resources

Making the Health System Work Better for Everyone: The ICD-10 Collaboration Imperative; OptumInsight

ICD-10 collaboratives best practices -- Published on ICD10 Watch (http://www.icd10watch.com)

Provider-Payer Collaboration: Strategies to test ICD-10 Provider and payer perspectives (AHIMA)

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