Proposal to Develop Icd 10 Impact Assessment - PDF

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					Despite 2013 Deadline, ICD-10 Preparedness Efforts
Should Begin Today

Health care organizations bracing for the myriad             increase capacity for quality measures, improve
changes brought by the new ICD-10 rules need to take         interoperability of electronic health records (EHRs), and
a stepwise approach toward the October 2013                  facilitate more equitable reimbursement. “This is not just
compliance date. Experts note that the ICD-10                a system change,” Michaels asserted. “It is an all
presents a unique opportunity to upgrade                     encompassing change that will drive better patient
systems that need improvement, while at the                  care.”
same time warning that procrastinating may lead to
compliance delays and rushed capital expenditures.           However, the magnitude of the transition may leave
                                                             some at a loss for where to begin, he said. For
“On a very basic level, ICD- 10 requires the healthcare      example, ICD-10 codes will affect payers’ and
industry to switch from a five-digit numeric code to a       providers’ software systems, including billing and
seven-digit alphanumeric code and to become familiar         payment, clinical systems (e.g., EHRs and personal
with a dramatic increase in the number of codes,”            health records), decision support and other ancillary
according to Tim Michaels, vice president, Ingenix           systems, as well as clinical and billing workflows and
Consulting. “But those tasks really are not simple at all    payment methodologies.
and represent just the beginning of a long journey
toward the October 2013 compliance deadline,” he             Because such broad system upgrades are mandatory,
said.                                                        health care entities that begin working toward
                                                             compliance today will be able to distribute the expense
When asked what business, clinical and systems               of these changes over several years, using their
processes will be impacted by the ICD-10 rule,               preparedness as a competitive advantage in the
Michaels responded “people may be surprised to learn         marketplace. In addition, the ICD-10 conversion
that because the new ICD-10 codes are fundamentally          presents an opportunity to make administrative and
different from the ICD-9 codes, nearly every health care     clinical simplifications that improve clinical
function and department will be affected. That               and financial performance over the long haul.
realization may be overwhelming, but organizations
cannot allow fear to paralyze them.”                         “Although the move to ICD-10 codes can seem
                                                             daunting, it will pave the way toward more accurate
The original proposal for ICD-10 implementation was          payment for services as well as provide the granularity
October 2011, but the health industry successfully           that the Centers for Medicare & Medicaid Services and
lobbied for an extension until 2013, citing the cost and     commercial payers need in order to conduct more
complexity of conversion. “With the 2013 deadline in         meaningful analyses of diagnoses and procedures as
place, it may seem like there is plenty of time to achieve   they relate to outcomes and costs,” said Tom Darr,
compliance, but if organizations haven’t started             M.D., chief medical officer, Coding, Reimbursement and
assessing their situation yet, they’re already behind,”      Payment Integrity, Ingenix.
Michaels continued. “Developing strategic plans and
taking action now will help to mitigate late-stage rushes    The many obstacles to preparedness
for compliance.”
                                                             All health care entities – including physicians, hospitals
ICD-10 changes are sweeping                                  and payers – will be affected by the ICD-10 code set
                                                             changes. Physicians and hospitals certainly have
The more descriptive and better-categorized ICD-10           major adjustments to implement – including working
codes will enable diagnosis classifications that more        with their vendors to assess where their operations
completely represent the severity of medical conditions,     stand relative to the ICD-10 final rule.

ARTICLE | Despite 2013 Deadline, ICD-10 Preparedness Efforts Should Begin Today            

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“With ICD-10 codes affecting clinical, IT, finance,       instead of seeking the additional details that would
reimbursement and human capital areas, physicians         support a more specific code selection. “Payers will
and hospitals need to start thinking about all of these   need to provide greater reimbursement for coding to a
issues now,” Darr advised. “It is important for them to   higher level of specificity,” Darr suggested, adding that
act soon to assess the potential impacts, define gaps     such incentives also will drive more accurate quality
and work toward bridging the gaps, so that when           measurements and ratings that can have a positive
the compliance date arrives, they are not in panic        impact on patient care.
                                                          Payers also are likely to experience much higher call
Payers, however, are likely to have additional            center volume during the ICD-10 transition and should
challenges around ICD-10, according to Michaels.          prepare themselves for lower first-pass claim
“There is a huge set of processes that need to change     payment rates and inadvertent double billing from
on the payer side – this is a triple-million-dollar       providers running dual billing systems. Preparing for
problem,” he said. “When placing that expense in          ICD-10 transition and implementation issues requires
context with the current state of the economy, payers     advance planning and an organization-wide approach.
need to be thinking of how to manage the financial
impact of compliance.”                                    Taking a team approach

Like physicians and hospitals, payers need to             “Getting started doesn’t have to be difficult,” Michaels
determine whether or not their older systems will be      said. “Generally there are three basic approaches to
able to accommodate the expanded character sets           take: (1) remediate; (2) replace; and (3) neutralize. To
used in ICD- 10. Payers also will need to offer general   begin the process of transforming an organization using
ICD-10 training for staff members who work with the       these approaches during the next 12 months, payers
code sets to develop business rules used in claim         should form a cross-functional team within the
adjudication, fraud detection, medical management,        organization.
medical policy and any claims auditing efforts. “Payers
quickly need to determine what this rule means to them,   “By including people who wear different hats within the
what strategies they’ll employ to achieve compliance by   organization, you are guaranteed to learn more about
the deadline, and what capital they need to dedicate to   potential problems and to come up with better solutions
getting there,” Michaels asserted.                        for those problems,” Michaels said. “One of the biggest
                                                          hurdles in this transition is the recognition from
Further, payers will need to develop incentives for       executive management that the ICD-10 transition is not
providers who are taking advantage of ICD-10’s greater    just an IT problem – it is an enterprisewide endeavor
level of specificity. For example, where ICD-9 may        that requires significant capital and resources during the
have had one code (e.g., 599.7 for hematuria), ICD-10     next three to five years.”
has four corresponding and more specific codes:
• R31.0 – gross hematuria                                 One of the first tasks the cross-functional payer team
• R31.1 – benign essential microscopic hematuria          should complete is an assessment of the scope of ICD-
• R31.2 – other microscopic hematuria                     10 changes on the claims system, taking into account
• R31.9 – hematuria unspecified                           functional, departmental and systematic issues that
                                                          either could slow down or enhance the new coding
Without specific documentation, many coders might be      paradigm. “After doing this high-level impact
tempted to use the unspecified (e.g., R31.9) code         assessment, team leadership can apply the three

ARTICLE | Despite 2013 Deadline, ICD-10 Preparedness Efforts Should Begin Today         

For more information call 866-223-6738 or visit us at                                          2
possible approaches – remediate, replace or neutralize       as an impartial third party to mediate internal disputes,
– to the systems as appropriate,” Michaels said.             recommend product solutions and shepherd an
                                                             organization through the lengthy ICD-10 transition,
Payers should bear in mind that they can and should          according to Michaels.
consider taking different approaches for different
situations and do not have to choose one approach in         Getting a handle on the organization’s status is an
all cases. “If a payer has 20 claims systems, it can         important step when starting down the path to ICD-10
remediate two or three of those, replace four or five,       preparedness. In assessing financial, IT and process
and reverse-map the rest of them – it doesn’t have to        issues that may need to be resolved, some questions to
lock into a single strategy,” he noted.                      ask include:
                                                             • How will this implementation impact the billing and
Executive leadership should also be looking at ICD-10             accounting systems?
preparedness as an opportunity to streamline and             • What is the financial impact and how will we raise
improve overall operations. “As with any large change,            the capital for this project?
you don’t want to look at it as just a technical program,”   • Does software need to be upgraded or replaced?
Michaels said. “Plans really need to take a hard look at     • What is the testing plan?
why those systems are in place, why they are the way         • Which reports are based in ICD-9 and how long will
they are, and take any opportunity to improve business            it take to convert those reports to ICD-10?
processes around them.”                                      • Are there any efficiencies that can be gained by the
Master the transition with external help                     • What processes do we want to change during the
                                                                  ICD-10 implementation?
Managing and maximizing the ICD-10 transition
process will command a great deal of human capital           Understanding the answers to these questions will set
and resources that organizations may not have                the foundation for determining what implementation
internally. Where organizations are lacking either the       activities should be employed and where efforts should
expertise or the resources – or both – they should           be focused, said Michaels.
consider outsourcing as a viable option, Michaels said.

“Preparing to comply with ICD-10 rules is an enormous,
transformative undertaking and it is unlikely that payers
and providers can manage everything,” Michaels
remarked. Organizations may choose to handle some
components internally and outsource other components
to external entities.

“Ingenix Consulting understands every facet of the
health care system, so we can help organizations             .
assess their operations and processes and develop
plans for an efficient, effective and compliant
conversion,” he said. From initial assessment and
planning to traditional process and system redesign and
implementation, Ingenix Consulting is available to serve

ARTICLE | Despite 2013 Deadline, ICD-10 Preparedness Efforts Should Begin Today            

For more information call 866-223-6738 or visit us at                                             3
About Us

Ingenix Consulting is a premier, data-driven health and human services consulting organization. We have over
1,000 consultants with experience working with hospitals, physician practices, health plans, employers,
government agencies and pharmaceutical companies. This scale and exclusive health and human services focus
set us apart.

ARTICLE | Despite 2013 Deadline, ICD-10 Preparedness Efforts Should Begin Today    

For more information call 866-223-6738 or visit us at                                     4

ARTICLE | Despite 2013 Deadline, ICD-10 Preparedness Efforts Should Begin Today

For more information call 866-223-6738 or visit us at                          5

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