This document discusses strategies for hospitals to prepare for the transition to ICD-10 coding. It provides an overview of ICD-10, highlights key impact areas for hospitals, and risks around productivity and reimbursement. It then presents a three-phase model project plan for hospitals to investigate impacts, innovate processes, and implement changes. New technologies like computer-assisted coding are spotlighted as ways to support the transition by helping coders and improving documentation. The document concludes with a case study showing benefits some hospitals achieved through implementing computer-assisted coding, including increased coder productivity, accuracy, and cost savings.

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2. Shape your ICD-10 Technology Strategy:
Be Ready for Change and Protect Revenue
Mark Morsch, Vice President of Technology, Optum

3. Agenda
• ICD-10—Brief Overview
• Hospital Impact Areas
• Spotlight Risk—Productivity and Reimbursement
• Model ICD-10 Project Plan
• New Technologies for ICD-10
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4. ICD-10 brief overview
• New federal regulation for coding of patient charts that organizations
must comply with in order to be reimbursed for charges
• More detailed reading of medical records
• Provides much better data for use by providers, government, payers
• Challenge = huge education, reimbursement, resource issue
Dramatic increase in number of codes that
capture conditions of a patient and medical
services provided—
from 18,000 ICD-9 to 155,000 ICD-10 codes
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5. ICD-10 hospital impact areas
• HIPAA 5010 • Payer contracts
• ICD-10 • Medicare
• Meaningful use Regulatory Financial reimbursement
of EHR • Coding and billing
• Quality reporting
ICD-10
• System upgrades • Physician
• Testing/validation documentation
• Vendor selection • CDIP
Technology Clinical • Registries and
outcomes reporting
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6. ICD-10 impact on productivity, revenue
Projected Annual Financial Impact of ICD-10:
Typical 500 Bed Hospital
$-
$(100,000)
$(200,000)
$(300,000)
Dollar Impact
$(400,000)
$(500,000)
$(600,000)
$(700,000)
$(800,000)
$(900,000)
$(1,000,000)
Productivity Denials Undercoding
Financial Impact $(350,000) $(400,000) $(900,000)
Sources: Advisory Board Financial Leadership Council, Revenue Cycle Performance Assessment, 2008; Robert
E. Nolan Company, Replacing ICD-9-CM with ICD10-CM and ICD-10-PCS: Challenges, Estimated Costs, and
Potential Benefits, October 2003; RAND, The Cost and Benefits of Moving to the ICD-10 Code Sets, 2004
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7. Scope of potential business impact areas
5010/ICD-10: Provider Functions/Applications Impact
People Systems
Health Patient
Clinical and Analytics Strategic
Patient Access Information Financial
Ancillary and Reporting Initiatives
Management Services
• Central, ED, Ancil • Physician and Nurse • Coding and • Charge Entry • Quality/Outcomes • Implementation of
lary and Documentation Abstracting • Payer/Clearingh Reporting New Business
Ambulatory • Ancillary and • Deficiency ouse Edits • Financial/Revenue and/or Clinical
Registration Support Services Tracking • Contracting and Reporting Systems
• Scheduling Documentation • Claim Edit Work Credentialing • Public Health • Transition to
• Admitting/Dischar • Order Entry and Lists • Facility and Reporting Paperless
ge/ Transfers Results • Quality Reporting Environment
• NCCI/LMRP Edits Professional
• Referrals/Authoriz • Workflow Billing (CMS/ • Opening of New
• Encoding and
ations/ Pre-Cert within EMR • Follow Up and JCAHO, PHC4, PH Facility
Grouping
• Bed Management • Case Management Denial CQA) • Narrowing of IT
• Physician Query
Management • Data Warehouse Vendor Portfolio
• Clinical Registries • Clinical
and Research • Claims Status • ICD-9 to ICD-10 • Implementation of
Documentation
Mapping and Computer-
• Workflow/Transfers Improvement
Translation Assisted Coding
Between Clinical
Units
Organizational Support: Project Management—Education and Training—Compliance—IT
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8. Model 3-phase plan
Improve
Investigate Innovate Implement
and Operate
Phase 1
Phase 1 Phase 2 Phase 3
Business Readiness Program Remediation Ongoing Monitoring
and Roadmap and Implementation and Improvement
• Identify business impact areas • Project governance • End-state measurement
• Facilitate ICD-10 impact assessment kick-off and • Implement education and documentation
educational session with key stakeholders and training program • Implement review
• Conduct onsite ICD-10 impact assessment of all impacted • Technical resourcing and improve process
business areas • Testing, design and • Customer coaching
• Conduct ICD-10 reimbursement and coding impact analysis management • Implement
• Conduct clinical data quality assessment • Operational and compliance program
• Conduct risk assessment systematic workflow
• Develop ICD-10 recommended education and redesign management
training approach • Implement clinical
• Develop ICD-10 roadmap to readiness documentation
improvement program
• Conduct payer and vendor readiness assessments
• ICD-9 to ICD-10/ICD-10 to
• Present findings and recommendations to key stakeholders ICD-9 mapping and translation
Project Management
Our multi-phased approach ensures that your ICD-10 compliance requirements are met
and your organization is engaged, ready and maximizing business value
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9. New technology for ICD-10

10. Under-coding risk—an example
History:
• Diabetic patient brought by ICD-9
ambulance to the Emergency 434.91 (Unspecified Cerebral Artery Occlusion w/Infarction)
Room after spouse called 911 438.22 (Unspecified Hemiplegia Affecting non-Dominant Side)
when patient complained of a 438.11 (Aphasia)
sudden, severe headache, with
left-sided weakness, and
aphasia. Thrombolytics (tPC) DRG: 065 Weight: 1.1667 National Payment: 6,024.97
were administered prior to
transport.
• Imaging confirmation of right ICD-10
mid cerebral artery occlusion I63.511 (Unspecified Cerebral Artery Occlusion w/Infarction)
Final Diagnoses: Z92.82 (status post administration of tPA (rtPA) in a different
facility within the last 24 hours prior to admission to current
1. Cerebrovascular infarction due
facility)
to cerebral artery occlusion
I69.53 (Unspecified Hemiplegia Affecting non-Dominant Side)
2. Left hemiparesis I69.928 (Aphasia)
3. Aphasia
DRG: 062 Weight: 1.9479 National Payment: 10,059.17
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11. Supporting the process
How does context shape coding decisions?
Medical Record
Diagnostic Procedural
Tests Notes
Admission Discharge
Notes Summary
Consultant or
Past Medical Specialist Progress Notes
History Notes
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12. Clinical documentation support
Where are the gaps?
Current New or existing problem?
Symptoms
Findings relevant or
Medical incidental?
History
Diagnosis complicated by
Findings chronic condition?
Which symptoms related
Diagnosis to final diagnosis?
How is the treatment
Treatment supported by medical
evidence?
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13. Computer-assisted coding at a glance
Natural Language
Computer-assisted coding
Processing (NLP)
• Establishes a link between the • Can ―read‖ physician
assigned code and the text that documentation, identify key clinical
supports the code facts, map to codes
• Physicians use standard
dictation, transcription, speech
recognition, templates with free-text
fields
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14. Support for clinical documentation and HIM
• Clinical Documentation Improvement programs are being adopted along
with CAC
CDI • Conventional approaches to CDI often labor-intensive and expensive
• Opportunity to apply NLP technology
• Laterality of injury
Increased • Trimester of pregnancy
Detail
• More detailed anatomy
• Retrospective processes may not be effective
• Concurrent coding—identify documentation deficiencies concurrent with
Clinician
patient stay
Feedback • Physician query integrated with the EMR
• Real-time documentation alerts
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15. A closed-loop health system performance improvement
solution
Hospital Billing and Practice Management
Systems
ACO Dashboard
Clinical Data NLP-powered Analytics
Translation CPT, ICD-9(10)
Engine Quality Dashboard
Physician Best Practices
Documentation, Converts Benchmarks
Quality Metrics Cost/Utilization
Nursing discrete and
Dashboard
Documentation, non-discrete Key Metrics
Orders, clinical data Performance
Results … into consistent
Adherence to Monitoring Revenue Cycle
quality, cost Guidelines Dashboard
and revenue Episode
terms Treatment
Grouping Physician Productivity
Documentation
Deficiencies Dashboard
Configure Documentation Feedback and Care Delivery Support
Interactive - Supports ongoing CDI initiatives
Clinical Alerts - Physician-to-physician dialog regarding guideline
and Prompts adherence and diagnosis specificity
HIE
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16. Key technology takeaways and lessons learned
• Understand CAC and CDI products: What will they do (and not do)
– Define your expectations/educate team on expectations
• Understand the NLP technology
• Get HIM and compliance staff acceptance and over communicate
– Involve coders early in the process and throughout project, testing
• Preparation work is key to success
• Review present work processes and data flows before implementation
• Establish, track and monitor metrics
• Be prepared for a learning curve
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17. Case Study

18. Case study
• 8 member hospitals in the Midwest
• 5 hospitals implemented CAC initially
• 24 health centers/ambulatory sites
• Volume data for 5 facilities
– 91,000 inpatient encounters
– 576,200 outpatient and ED encounters
• Challenges: growth in patient volumes and pending regulatory changes
– Increasing coder workload
– Limited labor pool
– Expense associated with recruitment and training
– ICD-10 predictions on labor requirements
– Escalating emphasis on compliant coding
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19. Hospital results
• Integrated CAC technology with current EMR workflow
• Using NLP to interpret electronic inpatient and outpatient
documentation
• Increased productivity—this continues as coders become more
proficient on system
– 190% ↑ diagnostics coding productivity
– 116% ↑ ED coding productivity
– 15% ↑ inpatient coder productivity
• Improved accuracy: greater than 95%
• Improved consistency and compliance of codes
• Increased revenue and reduced expenses
– 5.16 FTEs: salary ↓ through position attrition
• $245,181 FY11 YTD (July 1, 2010–April 30, 2011)
– With benefits, this is $301,573
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20. Thank you.
Mark Morsch, Vice President of Technology
mmorsch@alifemedical.com