On the Coding Radar: 3 Reasons Why Hospital CEOs Must Pay Attention to ICD-10

Written by Bob Herman for Becker’s Hospital Review

Health information management issues are usually concentrated within the revenue cycle department and other similar areas of a hospital, but eventually, the big spotlight items will make their way to the CEO’s desk. One of those HIM issues that is making its way there, if it hasn’t already, is ICD-10.

Torrey Barnhouse, CEO of TrustHCS, a healthcare medical coding consulting and audit firm, says ICD-10 is more than just a coding or HIM issue. Since coding is the foundation of how information is documented and how money flows in, ICD-10 will affect almost every component of a hospital. He gives three reasons why hospital CEOs, in particular, need to pay attention to ICD-10 now, especially as CMS prepares to finalize the new compliance deadline.

1. ICD-10 will impact consumer-driven ratings. Hospital CEOs are distinctly aware of today’s healthcare environment with its patients, or in other words, consumers. Hospitals exist in a consumer-driven world, where patients can look up any hospital’s or physician’s rankings, qualifications, quality metrics and other performance indicators and base their healthcare decisions on what they find.

However, ICD-10 directly impacts some of those metrics and consumer-driven ratings, Mr. Barnhouse says. If a hospital does not make a smooth transition to ICD-10, coding and reporting could be way off, which could result in care measures looking less-than-desirable.

“If ICD-10 execution is not done well, you run the risk of unexplained mortality rates and coding errors that make the facility appear to be performing at a lower standard,” Mr. Barnhouse says. “When you have such ready access to things like HealthGrades, for instance, you open yourself up from a consumer standpoint to the care rankings of patients in your market.”

2. There could be major financial and labor ramifications. Hospital CFOs and COOs have had ICD-10 in their sights for a while now, and for obvious reasons. Hospital CFOs know ICD-10 will be a major financial barrier — revenue may lag due to incorrect coding and subsequent loss of reimbursement, and the general cost of switching to ICD-10 will cost thousands, if not millions, of dollars. Hospital COOs know ICD-10 will be a major staffing issue — coders need to be re-educated, and in some areas, there simply aren’t enough coders to go around.

CFOs and COOs are among the most trusted executive sources for the CEO, and they must be relaying those impacts of ICD-10 to the CEO so action can be taken immediately. “ICD-10 has to be on the CEO’s radar because there is no doubt you’re going have a greater exposure to financial risk,” Mr. Barnhouse says. “And if you’re already experiencing labor shortages in the coding cadre, you’re only going to exacerbate that when you introduce a new coding system.”

3. ICD-10 will play a major role within ACOs and other new care models. Accountable care organizations are one of the hottest topics for hospital CEOs today because they involve a fundamental shift of the healthcare delivery system. Instead of a hospital being a cog in a machine, a hospital will serve as a facilitator to manage the health of an entire population.

Hospitals are feverishly scooping up physician practices, aligning themselves with physician groups and creating new partnerships with payors. However, physicians and payors need to be on ICD-10 for ACOs and other care models to work efficiently and to share the right data.

“Not only is the CEO responsible for what takes place under his/her own roof, but then they have to consider if all the ancillary operations, clinics, etc., are also going to be ready for ICD-10,” Mr. Barnhouse says. “If not, which ones are most at risk? How do they evaluate practices that are little kingdoms within themselves?”

“There are a lot of initiatives on the C-suite today that weren’t there 20 years ago,” Mr. Barnhouse adds. “If we’re not careful and don’t educate CEOs, ICD-10 becomes just white noise. It’s just one more item on a long list of regulatory challenges for hospitals.”