SIX STEPS TO SAFEGUARD YOUR REVENUE CYCLE FROM ICD-10. Sponsored By: By: Amanda Griffith, Contributing Editor, Medical Product Guide

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1 SIX STEPS TO SAFEGUARD YOUR REVENUE CYCLE FROM ICD-10 By: Amanda Griffith, Contributing Editor, Medical Product Guide Sponsored By:

2 SIX STEPS TO SAFEGUARD YOUR REVENUE CYCLE FROM ICD-10 It s difficult to manage and run a medical practice in the United States today. The pace of change and the complexity is only increasing, particularly when physicians face mounting clinical and financial workflow problems. It used to be that physicians made enough money that they could let a lot of things slide. The margin is so much thinner now, though, that they have to micromanage their money, something no one taught them to do in medical school. Payer complexity certainly adds to the dramatic change. Recent studies show that payer rules changed percent annually between 2010 and In practical terms, that means every year a practice s staff must relearn almost 25 percent of the rules they need to know to get paid. Compounding this is data that shows that U.S. practices are leaving up to 30 percent of reimbursement on the table due to gaps in processes, staffing, training and/or inadequate technology. In other words, for every $100 a practice earns, it receives only $70. This adds up to a combined $125 billion per year that providers are not collecting. That s a lot of money left on the table, and it s a problem that will only grow come October 1, 2015 when the industry transitions to ICD-10. The conversion to ICD-10, stresses a recent article in the Journal of AHIMA, will impact almost every aspect of operations, data analysis, and reporting, and a number of IT systems that use diagnostic and procedural information. Scheduling, pre-certification, pre-registration, patient estimates, registration and case management functionality will be profoundly affected by ICD-10 preparation. One of the reasons ICD-10 has become such a scary proposition for the industry is the anticipated disruption to productivity of coders who may need to spend additional time on inaccurate ICD-10 codes that produce rejected claims and a lack of checks in the mail. That s why it s so important to conduct a comprehensive gap analysis and work to correct system vulnerabilities today. Assessing Your ICD-10 Readiness Small practices, in particular, are under unprecedented financial pressure from industry and internal forces and much as some may hope that ICD-10 gets delayed again, it s unwise to plan for that. Many feel the squeeze from both ends as reimbursements continue to decline in contrast to rising costs and fear that their revenue cycle may not fare well during the transition. Consider that every element of a practice scheduling, the front office, the clinical encounter, the back office, even patient outreach contributes to the bottom line. A practice s revenue cycle, after all, technically begins when the patient makes an

3 appointment, not once a claim is created. As a result, many practices are hemorrhaging money. Most, if not all, are hurting from the daily death by a thousand paper cuts that happen throughout the practice. Some of these cuts are things that they know exist but do not have the time or means to fix, such as denied claims. According to the Medical Group Management Association (MGMA), it costs more than $25 to rework ONE denied claim and 50 to 65 percent of denials are never reworked at all. Just as worrisome, experts commonly tell providers to expect at least a 60 percent decrease in productivity immediately after the transition to ICD-10, but organizations that don t have a firm grasp on coder behavior under ICD-9 will be unable to effectively calculate what that drop will look like and how it will truly impact their finances. It s no wonder some practices are anxious to begin. One claims clearinghouse recently polled 350 physician practice administrators, billing managers, billers and coders about their practices readiness for ICD-10 and found an interesting disconnect. While 82 percent of respondents are optimistic about being ready by October 1, only 21 percent believe their practice is currently on track to meet the deadline. Still others worried about the deadline changing again. Some worried their clearinghouse might be unable to process claims, that staff would not be properly trained, or that the impact on staff and productivity and information systems would be too great and the revenue cycle would suffer accordingly. Six Steps to Preparedness Healthcare providers should view October 1, 2015 as the firm deadline for ICD-10 preparation, and should be engaging, now, in clinical documentation improvement, systems testing, coder and physician education. These and other organizational changes are necessary to ensure a lack of disruption to the revenue cycle as the industry completes its transition. Improving revenue cycle performance systems performance is time and resourceintensive and cannot be achieved at the last minute. ICD-10 preparation has always been a challenge for healthcare organizations, especially smaller facilities with fewer resources to spare for the complex transition. If your organization finds itself behind in ICD-10 readiness, there are several steps you can take immediately: 1. Print the top 100 diagnosis codes your practice uses most for ICD-9. Cross-check them against what they will be in ICD-10 to assist in mapping the most utilized ICD-9 codes to new ICD-10 codes. 2. Ensure that staff is versed in ICD-10 role-based education to prevent errors from cycling through to the end.

4 Providers may take longer to document and code, and coders/billers may need to request additional documentation from the provider to complete coding and billing procedures. 3. Review PM, EMR, Interface, Administration, Custom Content and Reports setups to determine what changes need to be made to prepare for ICD-10. Create benchmarks and dashboards for Key Performance Indicators (KPIs) that routinely report system performance now and after ICD-10 go-live. 4. Strengthen denial management processes where denial outcomes are shared across departments. Focus on identifying where ICD-10 training gaps have created denials. Analyze why they exist and how to correct them. 5. Analyze your existing workflow. Create contingency plans as there may be delays due to documentation changes, coding changes, billing changes and claim rejections. 6. Consider outsourcing. Review internal costs and staffing availability, then weigh them against potential benefits of outsourcing various pieces of the conversion process, including basic project management, systems remediation, training and education, and post-compliance coding. Providers no longer have a year for dual coding and intensive training, but the sooner practice staffs are immersed in an ICD-10 environment, the more comfortable and efficient they can be when revenue begins to depend on their abilities. Knowing the role of ICD-10 codes within each segment of the revenue cycle, for instance, will assist stakeholders in utilizing the additional time to tweak existing project plans and exact a more efficient program for pre- and post-implementation success. Testing for Readiness Good revenue cycle management depends on consistent and accurate coding of claims and, in most healthcare organizations, the claims processing cycle is very delicately balanced. The inability to generate ICD-10 claims or to transmit them successfully for adjudication will be the biggest risk to the revenue cycle, and may severely impact the financial health of providers who do not conduct appropriate technical testing. The Workgroup for Electronic Data Interchange (WEDI) offers a comprehensive plan for small physician practices looking to begin ICD-10 testing and points out some of the risks that can be minimized including:

5 1. Claims denials and claims delays associated with ICD-10 coding errors 2. Cash flow disruption 3. EHR and other software applications inability to produce ICD-10 claims Time is Ticking New data from the Professional Association of Health Care Office Management (PAHCOM) indicates that the organizational changes necessary to embrace the new code set may not be as time-intensive or as costly as they might once have seemed. That s good news for organizations that still aren t sure how or if they can or should begin to minimize the risk of revenue loss from ICD-10. In an era of shrinking payment, rising costs, and reform, the revenue cycle is challenged as never before to operate efficiently, manage complex information, communicate clearly with patients, and get the payment that practices are due. Ultimately, a highperforming revenue cycle is critical to the success of an organization s mission to transition to ICD-10. Now is the time. HealthSystems about us: HealthSystems is a value-added resource for small and midsize physician practices using GE Healthcare s fully integrated Centricity Practice Solution Electronic Medical Record and Practice Management. HealthSystems will implement, train and support Centricity in the practice, and serve as a practice advocate to ensure clinical and financial productivity through exceptional customization, progressive technology and seamless interoperability. Visit Amanda Griffith, Contributing Editor of Medical Product Guide is a PR consultant and freelance writer specializing in health information technology and healthcare.