TIPAAA Presentation: ICD-10 Are You Ready?

caution-signICD-10 is the biggest change to hit the healthcare industry in decades. Hospitals, practices, providers and administrators will be challenged more than ever before as they train and migrate their organizations to this new detailed code set. This ICD-10 overview will explore what the changes mean to the industry as well as to the organization from a documentation, process, cost and revenue standpoint, and what these changes mean to Practice Management and EMR service providers.

Why Are We Doing It?

Think how much medicine has changed in the last 30 years - new procedures, new techniques - even whole new disease categories. We only need to look at all the devices in our bags to recognize how much technology - including medical technology - has progressed over the last 3 decades. Yet we are still using the same code set developed in 1974 and in use in the United States since since 1979. That's when Blondie was topping the charts, sony walkman was the vanguard of consumer electronics and we were all wearing leg warmers. That is back when no one had heard of erectile dysfunction and back when people stayed in the hospital for 2 weeks after gallbladder surgery because laparoscopic techniques were not yet developed.

The practice of Medicine will continue to change and the nomenclature has to keep up.

Greater Specificity = Improved Ability To Track Outcomes

ICD-10 uses 3-7 alphanumeric digits while 9 uses only 3-5 numeric digits. The extra digits enable greater specificity which gives us more sensitivity when refining groups and gives us codes for much finer comparison of mortality and morbidity data. Data that reflects updated medical terminology and classification of diseases.

Here is one clear example - in  ICD-9 there are 9 codes (707 to 707.09) for pressure ulcers. These codes indicate broad location but not depth or stage. With  ICD-10 there are 150 codes covering pressure ulcers with much more specificity around location and incorporating the 4 stages of wound severity.  In an example of how technology has stretched the  ICD-9 capacity, in  ICD-9 there is 1 code for angioplasty. That balloons (pun intended) to 854 in  ICD-10. The new codes will incorporate the location of the blockage and the device used.

This greater specificity ultimately supports our larger goals of monitoring outcomes - for effectiveness research but also to support the ongoing transition to pay for performance models.

Longer Codes = Larger Code Set

Now we all know how much things have changed over the last 3 decades. And there is no reason to believe that the pace of change is going to slow anytime soon. There are technologies under development and new ways of looking at disease classifications that are going to require the flexibility and capacity of ICD-10. ICD-10 gives us the ability to add more codes over time. ICD-9 is simply maxed out with very limited ability at this point to add codes.

Improved Monitoring of Global Health Trends

ICD-10 was developed by the World Health Organization in 1993 and was adopted by the vast majority of countries across the world by 2000. The United States and Italy are the only two major industrialized nations that continue to use ICD-9. Our continued use of ICD-9 makes it very difficult to share health data with other countries. This hinders our ability to track and monitor global health trends with anyone but Italy just when the increasing connectedness of populations and economies makes this critical to protecting the health of our citizens.

The transition to  ICD-10 is ultimately necessary to support the ongoing evolution of medicine, to facilitate more sophisticated medical research and to identify and avoid emerging global health threats. Hopefully, when we think about it that way - we move a little further along from mourning the loss of  ICD-9 to accepting the inevitability of  ICD-10.

Practical Implications

Now let's talk about the practical implications for a practice. The change to  ICD-10 is the biggest change to face our industry in decades. Essentially everything associated with coding a patient encounter and submitting that encounter for payment is going to have to change.  There is no denying that there is the potential for major disruption in operations and payment streams. Productivity is very likely to decrease across the board as physicians take more time to document the encounter and interventions and coders travel up what is to be a very steep learning curve. And there is the very real chance that a lot of software out there is simply going to break. Some staff may opt out leading to turnover and everyone is expecting a significant increase in denials as increased levels of specificity leads to more complexity in adjudicating a claim. HFMA is predicting a 5 fold increase in the percentage of denials. So what does all this add up to for a practice - a lot of money.

A consulting study chartered by the AMA estimates that it will cost the average practice $50-200K to transition to  ICD-10. This consists of expenses associated with training, assessments, other consulting fees, increased documentation as well as expensive software upgrades. About 80% of practices indicated that they will need to upgrade their PMS. Only about one‐third of the practices anticipate that this upgrade is part of their annual contract. The costs of the upgrade average about $10,000 per physician full‐time employee (FTE).

And then there is the very real likelihood of cash flow disruption as the claims systems slows and maybe breaks. In fact, CMS is so concerned about the potential of cash flow disruption during this transition that it is recommending that practices have 6 months of cash on hand or available to support the transition. They don't have any recommendations about where practices are supposed to get that capital.

Success vs. Survival

How do we survive - and maybe even thrive through the transition?  We start by not underestimating the degree of change required. Don't skimp on training - train, train, train. This will require a significant investment in time and money. Docs will not be able to learn this on the fly. Coders will need to be re-certified. AR and billing people will need to understand the new coding schema to manage the follow up processes. Have your documentation procedures assessed to make sure that they are adequate for the increased specificity of  ICD-10. Talk to staff early about their willingness and ability to make this transition.

The best option for many practices may be to engage with a revenue cycle partner that has already made the investment in the tools, systems and training and can provide a turnkey solution for a practice. In this way, practices can leverage the resources and capabilities of a trusted, stable partner that has the significant expertise, technical knowhow and capital required and is focused on ensuring the practice’s financial success. Practices can also leverage the benefits of operational scale, technical expertise and capital investment of a business partner. The right partner can help a practice continue to thrive through this transition.

By working with a company that is wholly focused on business operations and revenue cycle optimization, practices can maintain control over all clinical decisions and thrive as an independent practice.

There is much to be gained as we transition to  ICD-10 but much work to be done to get it right. The good news is that there are a lot of resources out there to help practices if they know where to look.

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