The True Costs of Transitioning to ICD-10

The True Costs of Transitioning to ICD-10 On October 1st, the United States transitioned from ICD-9 to ICD-10 as the medical code set for medical diagnoses and inpatient hospital procedures. The deadline has been pushed off in the past, which is disruptive and costly for healthcare delivery innovation, payment reform, public health, and healthcare spending. all5 The one-year delay is estimated by the American Health Го Information Management Association (AHIMA) to have cost the healthcare sector as much as $6.8 billion. O = $100 million The Medical Group Management Association (MGMA) is worried that large numbers of physicians are not be ready: • To adequately test with insurers • To receive software upgrades in a timely manner • This would prevent them from being able to submit IDC-10 claims. The industry is split on pushing for a dual coding initiative because of these concerns. AHIMA believes dual coding may: • Confuse claims processing • Negatively impact the handling of important patient clinical information • Affect patient care • Undermine the data infrastructure of the health care industry The Centers for Medicare & Medicaid Services (CMS) developed measures to give additional flexibility in the claims auditing and quality reporting processes. The CMS one-year grace period means that, as long as codes are in the correct diagnosis family, providers will not be penalized for ICD-10 codes that lack specificity. For providers, there are two main areas of concern post-ICD-10 implementation: workflow (time) and revenue (money). WORKFLOW Two different models of code selection Support Staff Collection Have support Changes in workflow will Unless documentation is not specific enough to allow staff to determine staff handle code selection based be small. on the provider's documentation. codes. Provider Selection Have providers handle their own Changes in workflow will be Orthopedic and emergency medicine code selection specialty dependent. specialists will likely be adversely affected. on the fly. Providers will need to: Compare pre-lCD-10 efficiency with their post-implementation workflow. Be more aware of how much time they spend with documentation and code selection. REVENUE Areas of concern Unbilled claims • Incomplete claims cannot be billed. Rising number of coders having problems completing and coding claims due to incomplete or unclear documentation. Rejected claims • Many practices use a gateway provider to submit electronic claims. • Keeping track of claims rejected by the gateway and following up on them quickly will help with rapid identification of most coding-based claims submission errors. Total AR Claims are not being paid as quickly. • This stems from either submission of incorrect claims or from processing problems on the payer side. Insurance bucket AR An aged accounts analysis by payer will identify if rising AR is due to slow payment across the payer spectrum or from only a selection of payers. • If from slow payment: • Indicates a claims submission problem on the practice side and payers should be promptly queried about rejected or languishing claims. • If from a selection of payers: There is likely a payer side issue and the practice should follow up with payers to be sure the revenue stream is uninterrupted. For each of these concerns: Review averages for these areas for six months prior to implementation and compare the rates/levels each month after to identify problems. If any areas begin trending in the problem range, field more queries from staff about coding selection or documentation specificity. Cost of CONVERSION Study conducted by Rand Corporation on the cost effects of the ICD-10 Conversion found: • The conversion to ICD-10 could cost the health care industry between $475 million and $1.5 billion over 10 years. • Costs would come from: • Staff training • Loss of productivity • Changing systems • Over the same 10 years, the industry would gain between $700 million and $7.7 billion in cost savings. Study conducted by The Nachimson Advisors in February 2014 on the variability in costs Pre- Implementation Costs Typical Small Pracitce* Typical Medium Pracitce** Typical Large Pracitce*** Training $2.700 - $3.000 $4,800 - $7,900 $75,100 Assesment $4,300 - $7,000 $6,545 - $9,600 $19,320 Vendor/Software $0 - $60,000 $0 - $200,000 $0 - $2,000.000 Upgrades Process Remediation $3,312 - $6,710 $6,211 - $12,990 $14,874 - $31,821 Testing $15,248 - $28,805 $47,906 - $93,098 $428,740 - $880,660 Total Pre- Implementation Costs $25,560 - $105,506 $65,452 - $323,588 $538,034 - $3,006,901 Typical Medium Pracitce** Typical Small Typical Large Pracitce*** Post- Pracitce* Implementation Costs Productivity Loss $8,500 - $20,250 $72,649 - $166,649 $726,487 - $1,666,487 Payment Disruption $22,579 - $100,349 $75,263 - $334, 498 $752,630 - $3,344,976 Total Post- $31,079 - $120,599 $147,912 - $501,147 $1,479,117 - $5,011,463 Implementation Costs Total Costs $56,639 - $226, 105 $213,364 - $824, 735 $2,017,151 - $8,018,364 In 2011, the U.S. Department of Health and Human Services (HHS) estimated the overall cost to transition would be $1.64 billion. This estimate include: • $357 million for staff training • $572 million for losses in productivity • $713 for system changes They estimate health care entities will save: • More than $87.7 million annually • As much as $3.95 billion by 2023 Overall impact on organizations • Many health care entities are worried about more than just the financial ramifications of the transition. Some other concerns include: • The overall impact of converting to ICD-10 diagnosis and medical procedure codes • Operational hassle • Time spent training • Changes to systems The Centers for Medicare & Medicaid Services believe business areas will be most impacted, due to operations, modifications to processes, and costs. Prediction of overall impact, per operation: Highest impact (> $10,000,000) • Claims processing • CMS system repositories • Developing and implementing payment policies • Quality measures and payment initiatives • Developing and utilizing assessment tools • Risk adjustment • Quality improvement activities Medium impact ($1,000,000 to $10,000,000) • Appeals • Coordination of benefits Medicare integrity • Medicare secondary payers Modest impact ($100,000 to $1,000,000) • Research • Demonstrations • Evaluations • Medicaid integrity • Medicaid policy and operations • Provider cost reporting How to Prepare for the TRANSITION STEP 1 Make a plan Obtain access to ICD-10 codes practice management systems ***.... • Access print and electronic copies of the codes • Check out electronic health record products STEP 2 Train your staff Clinic • Focus on documentation, new clinical concepts captured in ICD-10 Coding/Administrative • Focus on lCD-10 fundamentals STEP 3 Update your processes Get forms ready • Superbills CMS 1500 Forms Talk to your vendors and health plans STEP 4 Confirm systems are ready • Health plans • Billing services • Clearing houses Test your system and processes: Verify you can generate claims STEP 5 Business training partners • Test with health plans, clearinghouses, and vendors New software/system • Make sure you can generate ICD-10 claims Utilize some of these tips in your workplace. By taking the right steps to ensure your staff is prepared, the transition to ICD-10 can be a smoother one. corporatetraining.careerstep.com • athenahealth.com • cms.gov Designed by Ghergich & Co. Quill.om A small part of your job is 100% of ours. ||||