ICD-10 WILL CHANGE EVERYTHING It is important that your hospital is prepared for the changes. If you aren’t, you will face significant risks, most notably NO CLAIMS REIMBURSEMENTS AFTER OCTOBER 1, 2014. Other Areas at Risk Include: Provider Readiness Vendor / Payer Readiness People Processes Financial Impacts Don’t fall victim to the risks of ICD-10 Download the report today and begin your preparations. - See more at: http://www.phoenixhealth.com/resources#sthash.5UJkf3kN.dpuf

1. ICD-10Implementation:
ItsInherentRisks
forHospitals
andstepstowardsmitigatingthem
ByD’ArcyGuerinGue

2. ICD-10 Implementation:
Its Inherent Risks for Hospitals
and Steps Towards Mitigating Them
by D’Arcy Guerin Gue
D’Arcy
is
the
SVP
of
Marketing
and
Corporate
Services
at
Phoenix
Health
Systems.
As
a
co-­‐founder
of
Phoenix,
D’Arcy
has
had
a
number
of
pivotal
leadership
roles
contributing
to
the
growth
of
the
company.
Currently,
she
leads
overall
corporate
administration,
marketing,
services
development
and
knowledge
management.
She
had
led
various
strategic
initiatives,
including
the
development
of
our
HIPAA
Security
and
Privacy
tools,
ICD-­‐10
services
and
online
education
programs.
She
is
a
regular
contributor
to
Phoenix
Health
Systems
and
the
health
IT
community.
1

3. Contents
ICD-­‐10
Background
ICD-­‐10
Risks
and
Risk
Mitigation
Provider
Readiness
Vendor
and
Payer
Readiness
People
Processes
Financial
Impacts
Next
Steps
2

4. ICD-10
Background
3

5. A little background on
ICD-10
• Meaningful
Use
and
ICD-­‐10
are
closely
associated.
• The
robust
ICD-­‐10
coding
system
has
been
the
world
standard
for
capturing
healthcare
data
for
decades
–
but
has
been
resisted
by
our
healthcare
industry.
• Without
incorporating
ICD-­‐10
into
national
Meaningful
Use
efforts,
we
will
remain
behind
most
countries
–
rendering
our
HIT
reform
much
less
“meaningful.”
• ICD-­‐10
is
integral
in
achieving
Meaningful
Use’
goal
for
a
strongly
integrated
US
healthcare
environment
that
supports
superior
population
health
management.
ICD-10 is Needed to Achieve Meaningful Use
Data
capture
and
sharing
Advanced
clinical
processes
Improved
outcomes
2011
2012
2015+
2014
ICD-­‐10
Meaningful
Use
Objectives
–
Create
significant
improvements
in
population
health
through
a
transformed
nation-­‐wide
delivery
system
1. Improve
Quality,
Safety,
Efficiency
2. Engage
Patients
and
Coordinate
Care
Nationwide
3. Capture
and
Optimize
Use
of
Highly
Detailed
Healthcare
Data
4. Improve
Population
and
Public
Health
ICD-­‐10
4

6. Achieving Population
Health Management
Goals
Strategies Employed to Achieve Health Management Goals
Meaningful
Use
ICD-­‐10
HIPAA
Source: ONC and Federal Health Information Technology Plan, 2011-2015.
5

7. Why is ICD-10 Essential
to Meaningful Use?
ICD-­‐10
provides
improved
data
to
support:
• Greater
specificity
in
capturing
and
using
healthcare
data
• More
exact
measurement
of
the
quality,
safety
and
efficacy
of
care
• More
accurate
billing
and
claims
payments
• Improved
performance:
clinical,
financial
and
administrative
• Improvements
in
operational
and
strategic
planning
• Better
resource
utilization
• Maximizes
investment
in
EHRs,
databases,
etc.
• Better
response
to
environmental
and
other
crises
• Better
data
research
and
clinical
trials
• Better
prevention
of
healthcare
fraud
and
abuse
• Tracking
public
health
and
risks,
and
setting
health
policy
• Increasing
adoption
of
beneficial
new
technologies
6

8. ICD-10 Will Change
Everything
Hospital
staff
across
the
enterprise
will
need
education
to
adapt
to
broad
changes
in
systems,
processes,
and
documentation.
Every
tool,
system,
report,
program,
process
and
interface
involving
ICD-­‐9
diagnosis
or
procedure
codes
must
be
adapted
for
ICD-­‐10.
Revenue
Cycle
Systems
Registration
Patient
Management
Coding
System/HIM
Professional
Billing
Patient
Accounts
Administrative
Systems
Decision
Support
Systems
Data
Warehouse
Business
Intelligence
System
Clinical
Systems
Emergency
Department
Laboratory
Pharmacy
Radiology
–
RIS
&
PACS
Surgical
Services
Interfaces
(Engine
&
Point-­‐to-­‐Point)
ADT
Charges
Coding
Abstract
Data
Extract
Files
Internal
Systems
External
Systems
Professional
Fee
Billing
End
User
Documentation
Reports
Forms
7

9. Like Most Major
Changes, Converting to
ICD-10 Has Major Risks
The
most
important
risk:
NO
CLAIMS
WILL
BE
PAID
AFTER
OCTOBER
1,
2014
by
Medicare
and
most
insurance
payers.
Areas of major risk
Provider Readiness
Vendor and Payer Readiness
People
Processes
Financial Impacts
8

10. ICD-10
Risksand
RiskMitigation
9

11. Provider Readiness
Risks
According
to
an
April
2013
WEDI
survey,
most
healthcare
providers
have
made
little
headway
on
moving
to
ICD-­‐10
since
early
2012.
The
industry
is
well
behind
the
milestones
in
recommended
timelines.
E.g.
CMS
estimates
that
the
average
small
hospital
will
need
14
months
of
effort
in
order
to
go
live
with
ICD-­‐10
by
October
1,
2014.
“Unless
more
providers
move
quickly
forward
with
their
implementation
efforts,
there
will
be
significant
disruption
on
October
1,
2014.”
(WEDI)
CMS Recommended Timeline: ICD-10 Implementation
10

12. Provider Readiness
Risk Mitigation
Organize
your
implementation
effort,
now.
• Become
familiar
with
ICD-­‐10
requirements.
• Appoint
a
project
manager,
key
project
staff
and
stakeholders
to
be
involved.
• Provide
awareness
training
to
stakeholders
and
senior
staff.
• Develop
impact
assessment
project
plan
and
budget.
• Gain
senior
management
commitment.
Conduct
an
impact
assessment.
• Inventory
all
systems,
processes
and
workflows
where
ICD-­‐9
may
reside.
• Identify
all
departments
and
functions
that
will
be
impacted.
• Identify
talent
gaps.
Develop
enterprise-­‐wide
implementation
project
plan
working
back
from
October
1,
2014
deadline.
11

13. Vendor / Payer Readiness
Risks
Providers’
readiness
depends
on
vendors
and
payers’
systems
upgrades
and
successfully
testing
well
before
the
October
1,
2014
deadline.
Historically,
an
industry
culture
of
“non-­‐collaboration”
has
been
the
norm.
So
far,
providers,
payers
and
vendors
have
been
operating
under
differing
ICD-­‐10
implementation
timelines.
Payers
are
farthest
ahead
of
providers,
but
many
vendors
are
not
upgrading
as
quickly
as
payers.
Providers
who
have
done
little
work
on
ICD-­‐10
do
not
know
the
readiness
status
of
their
partners.
Systems Changes Will Be Challenging and
Time Consuming
Hospitals
may
have
as
many
as
100
or
more
affected
systems.
Systems
impacts
include:
• IT
system
changes,
including
interfaces
• Upgrades
or
replacement
of
software
• Testing
and
retesting
with
vendors
and
payers
• Modified
field
lengths
• Modified
system
logic
• Updates
to
superbills/encounter
forms
and
databases
• Systems
with
both
ICD-­‐9
and
ICD-­‐10
codes
• Retaining
historical
data
in
ICD-­‐9
format
IT
Talent
Gaps
May
Require
Additional
Staff
or
Outside
Support
12

14. Impact of ICD-10 on Systems
13

15. Vendor / Payer Readiness
Risk Mitigation
Create
a
vendor
inventory,
including
products
and
versions.
Determine
processes
that
need
vendor
and
payer
ICD-­‐10
support.
Discuss
business
needs
early
on
with
vendor
and
payer
partners.
• Understand
their
timelines
for
upgrades
and
collaborate
on
implementation
goals.
• Incorporate
vendor
and
payer-­‐related
tasks
in
project
management
(e.g.
training,
change
management).
• Require
deadlines
for
upgrades
and
other
deliverables,
and
track
them.
Work
with
vendor
/
payer
partners
to
test
and
remediate
well
in
advance
of
the
compliance
dates.
• Payer
systems
are
changing
too,
and
have
to
work
with
yours!
Look
into
ICD-­‐10
Collaboratives
in
your
state
• Their
goals
are
to
promote
integrated
ICD-­‐10
adoption
across
payers,
vendors
and
providers.
Charge
an
individual
with
ongoing
responsibility
for
regular,
frequent
communications
with
partners.
• Ensure
that
executive
oversight
is
provided
at
a
high
level
to
ensure
necessary
cooperation.
14

16. People
Risks
Almost
all
segments
of
the
organization
will
experience
disruption.
Senior
management
must
provide
adaptive
organizational
vision
and
strategies.
Coders
must
learn
new,
more
difficult
codes,
and
handle
increased
queries.
Physicians
must
be
trained
(and
required)
to
adopt
new
codes
and
documentation.
Clinicians
must
be
trained
to
ensure
clinical
documentation
enhancement
that
reflects
increased
ICD-­‐10
detail.
Information
technology
staff,
already
burdened
with
Meaningful
Use
/
EHR
initiatives,
must
take
on
more
work.
• Talent
gaps
are
likely
for
this
specialized
work
–
which
may
necessitate
outside
support.
Financial
management
and
administrative
staff
must
learn
new
codes
and
deal
with
potential
reductions
in
revenue
and
cycle
productivity.
The
industry
is
experiencing
staff
shortages
of
specialized
skills
to
manage
/
conduct
ICD-­‐10
implementation
projects.
• Shortages
are
causing
long
recruitment
cycles
and
higher
paychecks.
15

17. Involve
internal
stakeholders
in
creating
assessment,
education,
training
and
communication
plans.
• Establish
a
comprehensive
business
vision
and
governance
structure
to
facilitate
conversion
and
ensure
alignment.
• Perform
a
careful
assessment
of
staff
and
talent
gaps.
• Define
ICD-­‐10
stakeholders
and
include
representatives
on
the
Project
Team.
• Select
team
leaders
with
strong
program
and
project
management
skills.
• Clearly
outline
and
document
the
scope
of
the
project,
including
responsibilities,
process
flows
and
budget
–
beginning
with
organizational
impact
assessment.
• Include
key
stakeholder
representatives
in
each
phase
of
the
conversion
project.
Get
organizational
buy-­‐in
early
on,
from
the
ground
up.
• Appoint
a
Training
Leader
to
oversee
training
strategies.
• Outline
and
implement
an
ICD-­‐10
training
program
early.
o Determine
initial
awareness
training
needs
and
audience.
o Target
audiences
for
more
intensive
training,
e.g.
coding
staff,
analysis,
key
decision
makers,
physicians,
nurses,
administrative
and
financial
staff.
• Give
special
attention
to
clinicians’
awareness
of
their
roles
in
ensuring
a
successful
ICD-­‐10
transition.
o Get
“sponsorship”
by
clinical
leaders.
People
Risk Mitigation
“The
No.
1
challenge
leaders
cite
to
ICD-­‐10
readiness
is
physician
cooperation.”
(Health
Leaders
Intelligence)
16

18. People
Risk Mitigation
Identify
a
“Coding
Leader.”
Evaluate
current
coder
knowledge
and
capabilities.
• Some
staff
may
need
training
or
retraining
in
biomedical
sciences.
• Some
staff
may
need
to
be
replaced.
Conduct
a
selection
process
for
a
coder
training
solution.
Consider
Computer
Assisted
Coding
alternatives
(CAC).
Determine
if
temporary
coder
staff
augmentation
will
be
needed.
17

19. The
sheer
magnitude
of
process
changes
across
the
enterprise
will
be
disruptive,
if
not
managed
properly
with
authority
and
transparency.
Poorly
conceived
or
badly
integrated
changes
in
business
and
clinical
processes
will
negatively
impact
effectiveness
of:
• Workflows,
forms,
and
policies
and
procedures
• Clinical
documentation
• Coding
productivity
and
accuracy
• Reporting
and
planning
• Billing
and
revenue
cycle
• Enterprise
analytics
Because
ICD-­‐10
codes
are
much
more
complex,
and
cover
greater
specificity
than
ICD-­‐9,
CMS
anticipates:
• An
increase
in
coding
turnaround
time
after
initial
ICD-­‐10
go
live
• Initial
decreases
in
quality
and
accuracy
of
coding
• Disruption
of
data
analysis,
especially
quality
data
and
historical
trends
• Inaccurate
or
incomplete
coder
interpretation
of
clinical
records
• Increases
in
physician
queries
Processes
Risks
18

20. ICD-10 Impact on Processes
19

21. ICD-9 / ICD-10 Mapping
Discrepancies Will
Affect Processes
Since
ICD-­‐10
codes
are
not
matched
exactly
with
ICD-­‐9,
approximations
and
mismatches
will
occur.
There
is
a
strong
risk
that
information
will
be
lost
and
errors
made.
Disruptions
and
delays
will
occur
in
financial,
clinical
and
administrative
functions.
Processes
affected
include:
• Documentation
• Decision
support
• Productivity
and
efficiency
practices
• Contracts
and
business
processes
• HIM
• System
logic
and
edits
• Billing
• Claims
processing
• Case
management
20

22. Processes
Risk Mitigation
Vet
process
owners
and
super-­‐users.
Complete
a
comprehensive
assessment
of:
• Internal
and
external
reporting:
Any
report
that
contains
ICD
diagnoses
or
procedure
codes
(e.g.
back-­‐end
billing
and
HIM
reports,
ad-­‐hoc
reports)
• Operational
processes
and
workflows
• Manuals
and
policies
• Documentation
processes
• Current
coding
capabilities
Develop
an
implementation
plan
that
is
fully
integrated,
not
piecemeal.
• Implement
integrated
change
management
strategies,
policies,
and
procedures
across
all
functional
areas.
• Monitor
acceptance
and
effectiveness
of
initiatives.
Balance
deadlines,
internal
business
requirements,
trading
partner
readiness
and
vendor
schedules.
21

23. Mitigating
Mapping-­‐Related
Risk
Tailor
the
CMS
crosswalk
framework,
“The
General
Equivalence
Mappings”
(GEMs)
to
your
organization’s
implementation.
• GEMs
was
developed
in
collaboration
with
payer,
hospital
and
physician
organizations.
• GEMs
forms
the
basis
for
an
industry
standard
crosswalk
and
mapping
tool.
Because
matches
between
ICD-­‐9
and
ICD-­‐10
are
imprecise,
organizations
must
customize
the
crosswalk
to
reflect
its
particular
business,
clinical
and
financial
priorities.
Implement
a
dual
coding
strategy
to
eliminate
problems
in
critical
areas.
• Care
services
prior
to
Oct.
1,
2014
will
require
continuing
use
of
ICD-­‐9
code
sets
for
some
time.
(e.g.
resubmissions,
appeals)
• Dual
coding
allows
reporting
in
either
ICD-­‐9
or
ICD-­‐10.
• Enables
validation
of
both
ICD-­‐9
and
ICD-­‐10
code,
simultaneously.
• Will
allow
continuing
historical
and
longitudinal
comparisons.
• Scope
of
dual
coding
should
be
based
on
priorities
and
practicality.
Develop
processes
to
ensure
that
proper
translations
occur
and
that
transactions
go
to
the
correct
system.
• Keep
an
audit
trail
of
translations
made
and
the
systems
involved.
• Ensure
original
transactions
and
service
history
can
be
reconstructed
in
their
original
codes
for
any
business
process
that
relies
on
the
submitted
code.
Processes
Risk Mitigation
22

24. Develop
Risk-­‐Based
Implementation
Scheduling
Identify
processes
that
are
at
greater
risk
by
ICD-­‐10
changes
and
schedule
them
in
the
implementation
appropriately.
• Evaluate
the
impact
on
each,
based
on
their
level
of
operational
or
financial
risk.
• Develop
a
corresponding
priority
schedule
in
the
implementation
plan.
Give
special
attention
to
planning
the
modifications
of
business
processes
to
manage
revised
components
of
the
value
chain.
Determine
the
approach
and
timing
for
updating
analytics
and
reporting
to
support
ICD-­‐10
effort.
Delay
non-­‐critical
business
intelligence
initiatives
until
after
the
ICD-­‐10
implementation.
Processes
Risk Mitigation
23

25. Centers
of
Medicare
&
Medicaid
Services
(CMS)
estimate
ICD-­‐10
will
initially
result
in
a
decrease
in
cash
flow
and
loss
of
revenue.
Denial
rates
are
expected
to
increase
by
100%
-­‐
200%
post-­‐
implementation,
with
an
increase
in
A/R
days
by
20%
-­‐
40%.
Healthcare
organizations
will
likely
endure
declining
payments
for
up
to
two
years
after
the
October
1,
2013
implementation
date,
depending
on
quality
of
implementation.
Claims-­‐error
rates
are
expected
to
increase
from
6%
to
10%
as
compared
to
the
current
average
of
about
3%
with
ICD-­‐9.
Financial Impact
Risks
Potential Impact of ICD-10 on Finances
24

26. The
Goal
of
Revenue
Neutrality
CMS
expects
that
ICD-­‐10
will
have
a
revenue-­‐neutral
impact
on
providers
in
the
long
term,
but
this
is
unlikely,
short
term.
To
help
avoid
revenue
hits,
a
financial
impact
analysis
should
be
conducted,
including
a
process
map
that
models
the
transition
from
ICD-­‐9
to
ICD-­‐10.
• The
map
should
reflect
how
all
processes
flow
and
connect
to
each
other
pre-­‐ICD-­‐10
and
post-­‐implementation
• Will
show
how,
where
and
when
the
transition
will
affect
the
revenue
cycle.
• Will
enable
developing
an
action
plan
to
provide
special
attention
to
potential
revenue
cycle
vulnerabilities.
Financial Impact
Risks
ICD-10 Impact on Hospital Revenue Cycle
25

27. ICD-10 Revenue Cycle Impacts
26

28. Financial Impact
Risks
Both
CMS
and
some
payers
expect
that
there
will
be
delayed
payments
due
to
the
ICD-­‐10
transition,
which
will
impact
revenue
directly.
• Immediately
before
and
after
go-­‐live,
expect
increased
payer
scrutiny
to
identify
potential
duplicate
billings
and/or
payments
for
service
(i.e.,
billings
under
both
ICD-­‐9
and
ICD-­‐
10).
• Increased
payer
requests
for
medical
record
verifications
for
specific
claims
are
likely.
• Documentation
and
coding
errors
will
slow
payments.
An
increase
in
aged
accounts
and
accounts
receivable
will
impact
productivity
and
staffing.
Various
tools
and
studies
are
available
in
the
market
to
assist
with
payment
prediction
27

29. Financial Impact |
Risk Mitigation
Educate
staff
about
the
relationship
between
ICD-­‐9,
ICD-­‐10,
CPT
and
revenue.
Set
financial
benchmarks
in
the
implementation
and
financial
processes.
Prepare
a
solid
financial
management
plan,
upfront:
• What
will
the
business
look
like
in
an
ICD-­‐10
world
vs.
ICD-­‐9?
• Perform
strategic
planning,
using
analytics,
trending,
reporting
and
revenue
forecasting.
Cash
flow
management:
• Begin
cash
flow
analysis
early.
• Establish
lines
of
communication
with
banks
and
payers
regarding
potential
financial
issues.
Budget
for
potential
cash
flow
impacts;
prepare
for
delayed
payments
and
claims
adjudication.
• Adjust
accounts
receivable
cash
reserves.
• Consider
getting
temporary
increases
in
lines
of
credit.
• Manage
A/R
to
minimize
denied
payments
and
write-­‐offs.
Ensure
strong
communication
with
payers
to
reduce
claims
payment
confusion
and
delays.
Train
clinical
and
administrative
staff
on
fraud,
waste
and
abuse
regulations
and
reporting.
Get
independent
audits
of
past-­‐submitted
claims
Run
both
ICD-­‐9
and
ICD-­‐10
in
tandem,
post-­‐implementation
to
help
reduce
slowdowns
in
payments.
28

30. Financial Impact
Risk Mitigation
Plan
for
HIM
productivity
delays
and
educational
expenses.
Prepare
for
increased
denial
tracking,
trending
and
reporting
needs.
Right-­‐size
staffing
in
patient
access,
HIM
and
patient
accounting
to
handle
increased
work
volume.
Emphasize
good
documentation,
which
directly
impacts
accurate
code
assignment,
billing
and
payment
timing.
Crosswalks
and
translation
tools
must
allow
the
organization
to
anticipate
and
adjust
for
financial
impacts
related
to
the
implementation.
Budgeting
for
ICD-­‐10
Using
the
impact
assessment,
analyze
direct
and
hidden
costs
of
transitioning
to
ICD-­‐10.
• Involve
CFO
in
budgeting
for
costs
of
ICD-­‐10
• Expect
capital
cost
outlays
and
increased
staffing
costs
in
order
to:
o Map
and
load
codes
o Develop
new
reports
o Map
dual
coding
systems
o Retrain
users
o Hire
new
coders
or
move
to
computer
assisted
coding
(CAC)
o Augment
IT
and
other
staff
with
specialized
talent
• Include
upgrades
of
systems
or
costs
to
replace
old
systems
• Consider
costs
to
purchase
implementation
tools
29

31. Don’t Delay…
Phoenix
Health
Systems
provides
ICD-­‐10
project
planning,
leadership
and
implementation
expertise.
With
over
20
years
of
healthcare
IT
experience,
Phoenix
is
passionate
about
supporting
exceptional
healthcare.
Don’t
fall
victim
to
the
risks
of
delaying
the
transition
to
ICD-­‐10
–
start
preparing
now.
We
can
help.
Get
a
FREE
ICD-­‐10
Assessment.
Schedule
a
meeting
with
one
of
our
ICD-10
experts
today.
30