How to mitigate the revenue cycle impact of the ICD-10 delay

By Jen Bresnick for RevCycle Intelligence

October 1, 2014 was supposed to be the beginning of the ICD-10 era in the United States, but once again the industry is facing a new implementation date after Congressional action in April. While the one-year delay does give some organizations a much-needed breathing space to ramp up testing, education, and systems conversion, others worry that the financial health of organizations that were ready to go this month will suffer due to the need to maintain readiness status for another twelve months.

How can healthcare organizations get prepared, stay prepared, and keep the coffers full during the next twelve months until 2015?

Measuring the financial impact of ICD-10 activities

The first step to saving money is knowing where you might lose it. Conducting a thorough impact assessment for ICD-10 is a crucial foundational activity that a surprising number of providers have not yet completed. A recent WEDI survey found that only three-quarters of health plans and half of providers had completed impact assessments in hand as of September. Two-fifths of providers aren’t sure when they’re going to complete the assessments.

An impact assessment should cover all ICD-10 related activities an expenses, including systems that will be affected by the new codes and need testing or upgrading and the financial investment needed for coding education, clinical documentation improvement (CDI), and computer assisted coding (CAC) technology. Healthcare organizations must also take into account the slowdown in claims processing and resulting payments from Medicare and commercial payers that may result from needing more time to complete claims in ICD-10.

Leveraging CDI for ongoing improvement

Clinical documentation improvement has proven benefits that extend far beyond providing the detail and specificity necessary to code in ICD-10. Approaching CDI as a quality improvement initiative can help providers get paid more accurately for the services they are already performing, and may also help raise the accuracy of quality measures that have a significant impact on how pay-for-performance contracts are structured and paid.

“If you looked at our documentation and our data, our patients did not look as sick as they were,” explained Dr. Georges Feghali, Chief Medical Officer and Chief Quality Officer at TriHealth Medical. “Because of this, every time we measured outcomes, the expected versus observed always looked unfavorable.”

When physicians at TriHealth more accurately documented the difference between sepsis with urinary origin and urinary tract infections, the organization was able to accrue eight times as much money in appropriate reimbursements while fine-turning the metrics that established the appropriateness of their care. “We said, ‘Let’s document for clinical pertinence, and then hopefully there will be a financial gain.’ And indeed there is,” he added.

Preparing for systems conversion and testing

ICD-10 testing is a lengthy and intensive process that must take into account every single system where an ICD-9 code currently exists. The necessary infrastructure changes can be extensive, and they can also take a great deal of time to complete. Even organizations that have made early investments in testing or infrastructure improvement might find that they have to repeat certain steps due to the delay, says Erik Newlin, Vice President of EDI Platform & Compliance at Xerox and Co-chair ICD-10 Assessment Workgroup at WEDI.

“You may have already checked the box and said, ‘Hey, I’ve passed this gate,’ but the reality is with the shift in timeline you may very well have to repeat various aspects of your testing strategy and other aspects of your implementation plan,” he warns.

With the new ICD-10 deadline brushing up against Stage 2 of meaningful use and a host of other federal initiatives with financial penalties attached, ensuring that you put aside enough of the operating budget to handle ICD-10 testing needs will be crucial for success. Test early and thoroughly, Newlin advises, and don’t forget that EHR and data infrastructure vendors don’t work on your schedule. Allowing enough time to complete upgrades and perform adequate testing with business partners such as payers and clearinghouses will be crucial for avoiding delays in payment once the code set goes live.

“Every payer’s worst nightmare is not getting sufficient testing done early enough for them to change anything that they might learn from it,” Newlin said. “Payers want this to be as seamless as it can be, but none of us are perfect. If providers are waiting until the last second, you’re doing your own harm. Waiting until the last second does not leave enough of a ramp for payers to rectify any problems they might run into. We’re not going to have a seamless transition if that happens.”