There are significant issues and potential concerns that hospital-based practices should be aware of with respect to ICD-10 implementation. By preparing early however, practices can alleviate several operational and budgetary issues.
Here are some recommendations for practices as they start the implementation process.
Keep Cost Considerations in Mind
Industry estimates for ICD-10 implementation range from low to high for physician practices. A recent report from the Department of Health and Human Services (HHS) cited the costs as fairly low; however, it should be noted that the HHS estimate did not reflect costs associated with physician retraining, system upgrades, or “soft items” such as process interruption and payer payment delay.
According to HHS and based on the Rand Report as seen in the Federal Register Vol. 74, No. 11, it is estimated that ambulatory coders who would need to learn only ICD-10–CM would require about eight hours of training. For coders in the ambulatory setting, costs of $110 in training and $440 each for lost work time were estimated.
A more inclusive view of all associated costs can be found within the Nachimson Advisor Study. The Medical Group Management Association reported from a recent Nachimson Advisors Study that the average cost of moving to ICD-10 based on practice sizes were as follows:
· Small practice (3-9 physicians) = $83,000
· Medium practice (10-99 physicians) = $285,000
· Large practice (100+ physicians) = $2.7M
The bottom line is that practices should consider all facets of their business as they estimate costs for ICD-10 implementation, including size, physician training, technology and overall adaptation.
Adapt to the Changes
Physician practices, hospitals and referring providers must quickly adapt to necessary documentation changes. The United States version of ICD-10-CM (Clinical Modification) contains approximately 68,000 codes compared to the approximately 13,000 of ICD-9-CM. The magnitude of this difference is at once testament to the daunting size of what we must accurately classify and to the inadequacy of our existing system to do so. Failure to adapt rapidly may result in payment denials and delayed revenue. To reduce the likelihood of revenue disruption, physician practices should communicate early with their clinical partners about the upcoming change to ICD-10.
Communicate with Vendors
Billing companies like Medical Management Professionals, Inc. (MMP) are currently working with billing system vendors, claims clearinghouses and other partners to assure they are ready for ICD-10. In the same token, physician groups should be communicating with their partner vendors and referring physicians about the upcoming transition to ICD-10, and specifically regarding technology upgrades.
It may be anticipated that electronic health records (EHR) will not only incorporate documentation prompting designed to facilitate ICD-10 coding standards, but will likely have built in intelligence designed to extract the optimal codes. Certainly, any decision related to purchasing new software in the coming three years should include due diligence with respect to the system’s ability to navigate and handle the ICD-10 code sets.
Stay Abreast of Payer Payment Policies
Most commercial insurance carriers have indicated they will “crosswalk” ICD-10 codes back to ICD-9 codes for payment purposes. This allows them to avoid expensive reprogramming of all their payment systems, but it also creates another opportunity for confusion and claim processing errors. Industry skeptics have voiced concerns about possible mischief and intentional denials surrounding this policy. Therefore, it would be wise for physician groups to include ICD-10 in their payer contract negotiation discussions over the next two years for decreased risks concerning compliance errors and claims denials. During the transition period following ICD-10 implementation, payers will have little choice pragmatically but to continue prior reimbursement policies. As the implications of the expanded, more detailed code sets become apparent, so too will the implications for greater payment for greater complexity and lower payment for lesser complexity.
Brace the Group for Revenue Changes
Practices can and should prepare for a potential disruption of cash flow. Based on previous experience with HIPAA transaction code implementation, many groups anticipate similar problems with Medicaid programs. In fact, it is likely this will be more substantial than before since Medicaid is undergoing expansion under healthcare reform. A lack of adequate enforcement tools may also pose a challenge for practices, including penalties for payer readiness failures. These are far less than compliance costs however, which may delay and further confuse widespread adaption to ICD-10.
In summation, strategic thinking and preparation that involves costs analyses and effective communication with vendors and payers will assure that practices will be ready to implement these changes by 2013.
David Stone is the Executive Vice President with Medical Management Professionals, Inc. (MMP).