Turning 5010 and ICD-10 Transition into your Strategic Advantage
TABLE OF CONTENTS The Road to Compliance... 3 The Business Case for 5010 and ICD-10... 4 How to leverage 5010 and ICD-10 as your Strategic Opportunity?... 5 Overview of 5010 and ICD-10 changes and their Impact... 6 Approaches to 5010 and ICD-10 Transition... 12 Wipro s Solution Strategy... 13 Wipro s 5010 & ICD-10 Accelerator Methodology... 14 Wipro s 5010 & ICD-10 Tools... 15 Solution Differentiation... 16 Closing Remarks... 17 About Wipro Technologies... 18
THE ROAD TO COMPLIANCE The HIPAA (Health Insurance Portability and Accountability Act) was enacted by the U.S. Congress in 1996 to improve the portability of healthcare coverage through simplification of healthcare administrative transactions among covered entities. The simplification included information privacy and security along with electronic exchange of transactions that used certain code sets and identifiers. The transactions governed by ASC X12 Standards Version 4010 originally adopted in 2000, subsequently amended by addenda changes to 4010A1 in 2002, have had a number of change requests to support and enhance various business needs of the industry. Although the current implementations made the standardization of electronic transactions and the use of industry code sets such as ICD-9 CM (International Classification of Diseases, 9th edition, Clinical Modification) possible, they have relied on individual companion guides to address their specific shortcomings. This has caused a dilution of standardization resulting in excessive complexity. The Department of HHS (Health and Human Services) issued the final rule in Jan 2009 to adopt the ASC X12 Technical Report Type 3 (TR3), Version 5010 as a modification to Healthcare transactions, NCPDP D.0 for Pharmacy transactions and NCPDP 3.0 for Medicaid pharmacy subrogation all requiring compliance by Jan 1, 2012. The new 5010 standard is expected to reduce the individual companion guide requirements and promote a consistent implementation across trading partners. It also enables the transmission of ICD-10 codes which was not possible with 4010A1. HHS released the final rule in Jan 2009 that requires compliance by Oct 1, 2013 on the use of ICD-10 code sets to report healthcare diagnoses and procedures. Figure 1 Recommended timeline for achieving the compliance through major milestones In this paper, Wipro Healthcare discusses how to effectively achieve your compliance mandate and further leverage the investment to your strategic business advantage. 3
THE BUSINESS CASE FOR 5010 AND ICD-10 5010 is expected to define the transaction standards with clearer instructions, enable consistent data representations, and eliminate ambiguity and redundancy in data content, creating the potential for increased adoption of electronic exchange and process automation. The transition to 5010 will create an overall savings of $17-44B in the Healthcare industry through increased administrative and operational efficiency per the CMS 5010 Regulatory Analysis Report - September 2008. The use of ICD-10 code sets with increased specificity on the diagnosis and procedure conditions through 5010 will improve reimbursement accuracy, achieve better health outcomes and deliver higher quality of care. This compliance initiative, if approached strategically, has the potential of creating immense value. KEY FACTOR POTENTIAL FOR VALUE CREATION Operational Efficiency Customer Experience Reimbursement Costs Care Management Effectiveness Higher operational efficiency through improved auto adjudication rates, made possible through a number of transactional improvements Improved customer experience through reduced need for phone follow-ups due to clarity and enhancements on transactions such as eligibility request with enhanced responses, improvements in COB claims etc. Potential reduction of overpayments and increased accuracy in payments lowering the overall reimbursement costs Improved care management through the use of granular ICD-10 codes. The codes will help understand the patient s diagnosis and conditions better and improve patient safety. Better care management has the potential to reduce the medical loss ratio. 4
HOW TO LEVERAGE 5010 AND ICD-10 AS YOUR STRATEGIC OPPORTUNITY? Compliance initiatives are investments of no choice to firms. When every party complies with the mandate, the overall efficiency of the industry improves but no one necessarily gains a competitive advantage. A competitive advantage is gained by firms that use the compliance mandate for a broader objective to refine their internal business processes, policies and innovating with technology. Most firms have approached past compliance initiatives such as NPI (National Provider Identifier) tactically by employing a cross-walk and comply technique that arguably shielded their internal systems and processes from the pervasive impact of the mandate. Firms that employ a similar approach to 5010 by keeping internal systems intact and wrapping them with a cross-walk will not gain the intended administrative efficiency. Wipro Healthcare solutions are designed to assist firms to take the best advantage of the transition investment and go beyond achieving basic compliance. They are built on the following major tenets: 5010 transition requires significant system changes while providing the opportunity to increase transaction efficiency and process automation. Achieving basic compliance at the HIPAA endpoints is not sufficient. Using the transition as an opportunity to achieve operational excellence is to one s strategic advantage. BUSINESS VISIBILITY TO IT IMPLEMENTATION Gain visibility on business rules, reorganize administrative edits by bringing them up-front through SNIP (Strategic National Implementation Process) Levels 3-7 and limit adjudication systems primarily to clinical edits, to improve transaction efficiency. BUSINESS VISIBILITY TO HIPAA LIFECYCLE Gain visibility to the transaction lifecycle that spans a number of systems by collating key business events and monitoring performance measures. This will accelerate trading partner responsiveness and improve customer service quality. TESTING IS A KEY TO SUCCESS Testing a 5010 transition is expected to take 70% of the effort and hence test automation with a focus on internal and external testing is of vital importance to achieve the compliance mandate cost-effectively. Beyond 5010 compliance, CAQH (Council for Affordable Quality Healthcare) defined CORE (Committee on Operating Rules for Information Exchange) certification is required to enable an effective point-of-care decision making, a key goal in the best interest of both Providers and Payers. ICD-10 IS NOT Y2K Unlike the Y2K effort, ICD-10 transition is less systems focused. 80% of ICD-10 s impact is on the business in terms of key process and policy changes in the areas of network pricing contracts, benefits design, clinical coordination, care management programs, etc. Both ICD-9 and ICD-10 codes may have to co-exist for a period of time even after Oct 2013. Auto-mappings such as GEM (General Equivalence Mapping) or others can help only to a minimal extent and judgment is required in the use of such automappings. The remediation cannot be effectively handled merely through ICD-10 code conversion and automation tools. 5
OVERVIEW OF 5010 AND ICD-10 CHANGES AND THEIR IMPACT 5010 AND ICD-10 INTERDEPENDENCIES 5010 standards offer the provision to carry ICD-10 codes but do not insist on them. It can allow ICD-9 and / or ICD-10 CM and PCS code values in a given transaction with a mention of the code standard the value is based upon. This makes 5010 a pre-requisite to ICD-10 implementations as shown in the recommended timeline diagram (Figure 1). Most transitions would involve 5010 implementation along with continued use of ICD-9 codes followed by ICD-10 implementation and finally transitioning to the use of ICD- 10 codes. Although the implementations of 5010 and ICD- 10 are sequential, it is recommended that an impact analysis be performed for both in the assessment phase of the 5010 transition. This will help determine when the cutover to ICD-10 codes can take place and how both codes could co-exist as needed and provide a clear transition road map. Figure 2 - High level overview of the 5010 and ICD10 change impact to Provider and Payer business process functions and systems 6
OVERVIEW OF KEY 5010 CHANGES AND THEIR IMPACT TO BUSINESS AND IT KEY CHANGES BUSINESS IMPACT IT IMPACT 834 ICD-10 support to report pre-existing conditions Addition of control totals on quantities Front matter clarification Improved patient privacy Reduced enrollment errors Better understanding of the enrollee X12 Transformations ICD-10 updates and integrations Enrollment process IT changes Downstream systems data warehouse and analytics 820 A number of structural changes such as addition of remittance delivery method,etc. Effective exchange of premium payment data and adjustments X12 Transformations Premium payment processing logic updates 270 Addition of 45 new Service Codes in Eligibility Inquiry; Search options that improve member identification Includes member identification information for effective usage in other X12 transactions Higher member-match reducing manual follow-up Customer Service training Member identification and matching logic X12 Transformation Channel applications Portals, IVR, Customer Service etc. 271 Addition of 45 new Service Codes as responses to 270 queries Explicit detail on patient s financial responsibility should be provided Reporting of other health plan information of subscribers Reliable member identification for effective downstream transactions Better resolution of COB claims X12 Transformations Enhanced Eligibility response logic Channel applications Portals, IVR, Customer Service etc. 278 ICD10 support Data alignment with claim External code set based reason codes Details on patient condition information Increased 278 adoption Improved patient outcomes through care coordination X12 Transformations ICD-10 integrations Medical management changes Claims adjudication changes on updated 278 837 ICD-10 support to reflect specificity in diagnosis and procedure codes Increased number of diagnosis codes Information on remaining liability related to COB claims Improved guidance on the use of NPI Effectively report anesthesia and ambulance claims that would reduce manual processes Reworking of provider contracts, DRG groupings, coding, financials, quality measures, reporting, trend analysis, care management, etc. Automation of COB claims Customer Service training X12 Transformations X12 277-CA response Enhanced COB processing logic NPI crosswalks and related logic Amendments to pricing logic ICD10-ICD9 bi-directional crosswalks Downstream systems data warehouse and analytics 276/ 277 Simplified with removal of unwanted patient sensitive information Enabled easier tracking through the addition of segments for identifiers More detailed claims status information Improved patient privacy More clarity on claims status response through additional information X12 Transformations Enhanced claims status response logic Channel applications Portals, IVR, Customer Service, etc. 835 Clarity on how the claim was adjudicated and the usage of claims status code Non-primary payment reporting capability Report healthcare medical policy through a URL Improved payments and reconciliation and increased adoption of electronic remittance Better claims response integration by Providers X12 Transformations Enhanced remittance advice processing logic Downstream systems data warehouse and analytics 7
OVERVIEW OF ICD-10 CHANGE ICD-9 codes that are currently used to report diagnoses and inpatient hospital procedures in transactions lack the precision, specificity and detail required to effectively manage reimbursements and promote methods that emphasize quality of care such as pay-for-performance. The code set standards require updating to the new ICD-10 version. The 5010 standards mandate the use of ICD-10- CM diagnosis codes for provider services and ICD-10-PCS codes for inpatient hospital services. The specificity of the codification will increase due to the increase in granularity of ICD-10 codes compared to the current ICD-9 codes. This will allow more accuracy in reimbursement payments with improved auto-adjudication, better understanding of quality data, and the potential for improved treatment outcomes. Figure 3 - Diagnosis and Procedure Coding Changes across ICD-9 and ICD-10 The transition to ICD-10 has a significant impact on every major business process, policy, contract and procedure in addition to a number of system changes. Conventional approaches of using cross-walking as a solution strategy to reconcile between the two code-set standards is not the best option due to the 1-M / M-M relationships between the standards. A thorough impact analysis of every business area in relation to their current use or potential for future use and how best they can take advantage of the increased specificity is best done by involving all the necessary stakeholders. 8
IMPACT OF ICD-10 ON KEY BUSINESS PROCESSES AND POLICIES, IT SYSTEMS Figure 4 - Major business areas that are likely be impacted - Payer 9
IMPACT OF ICD-10 ON KEY BUSINESS PROCESSES AND POLICIES, IT SYSTEMS Figure 5 - Major business areas that are likely be impacted - Provider 10
MEDICARE SPECIFIC IMPACT The Medicare FFS (Fee for Service) systems will require non-hipaa mandated 999 implementation acknowledgements in place of the current 997 functional acknowledgement and 277CA acknowledgement transactions in addition to the 5010 changes identified in transactions - 837, 835,276/277, and 270/271. Medicare Administrative Contractors will require upgrades to their front-end processing systems to accommodate the 5010 changes and testing with their trading partners. CMS Core Processing and Downstream Systems related to Medicare FFS will need to endure considerable impact. Many MA (Medicare Advantage) plans will have a significant impact on the enhanced common editing required by 5010. The MA systems will need to adopt the 999 and 277CA acknowledgements. MA plans that still use paper remittance may find the 5010 upgrade as an opportunity to transition to using the 835 transaction. MA systems will be challenged with full adoption of NPI in view of the 5010 NPI clarifications. MA plans that do not want to invest further in their legacy systems may consider alternatives such as 5010-ready Full Service MA BPO. MEDICAID SPECIFIC IMPACT Medicaid agencies may pay pharmacy claims for which another payer is liable for payment. Medicaid is always the payer of last resort; a subordinate payer to a primary, secondary or any other payer. Medicaid Pharmacy Subrogation transactions are pay and chase claims generated by Medicaid Third Party Liability (TPL) systems. They are sent to the other payer to collect appropriate payment for those claims where there is evidence of non- Medicaid benefits. Until the proposed NCPDP 3.0, there was no adopted HIPAA standard for Medicaid pharmacy subrogation. The mandatory adoption of NCPDP 3.0 as an industry standard to enable electronic subrogation will improve efficiencies while reducing costs for Medicaid programs. Medicaid programs must plan to be able to continue their current methods for an additional year due to the advantage given to small health plans on their compliance readiness. The NCPDP 3.0 allows for recouping State Medicaid funds that were paid inappropriately. Medicaid agencies will have the subrogation standard as a method to seek reimbursement from other payers in the form of an electronic claim (from a Medicaid agency to a payer) for the purpose of seeking reimbursement from the relevant health plan for a pharmacy claim the State has paid. While there is no mandate at this time to use standard transactions for Medicaid Subrogation of non-pharmacy claims, 5010 Version of the 837 has been revised to enable Medicaid agencies to supply pay-to-plan information in the transaction so the payment can be made directly to the Medicaid agency. Impacted parties such as a health plan, business associate of a health plan, or clearing-house designated for use by a health plan from which a State Medicaid agency is seeking payment for a subrogated pharmacy claim must be capable of conducting transactions using NCPDP Version 3.0. NCPDP Version 3.0 does not apply to providers because they are not involved in these Medicaid subrogation activities. 11
APPROACHES TO 5010 AND ICD-10 TRANSITION The three broad approaches to handle the 5010 and ICD-10 transition are: Full Service BPO Remediation of the current systems Replacement with new systems In all cases, appropriate business process and policy changes need to be identified, assessed, planned and COMPARATIVE ANALYSIS OF THE APPROACHES implemented. Each approach has its merits and advantages and is most applicable to specific situations based on the firm s needs. One has to weigh these approaches in the context of the firm s strategic business direction and its immediate key business drivers that demand appropriate solutions. Figure 6 - Comparative Analysis of the Approaches 12
WIPRO S SOLUTION STRATEGY FULL SERVICE BPO SOLUTIONS Wipro Healthcare's Full Service BPO is a 360 degree solution that integrates people, process and technology. The solution comes with a proven technology platform optimized for specific lines of business. Wipro's BPO services umbrella covers all major claims processing components including membership and provider management, premium billing, provider credentialing, prior-authorization, claims adjudication & payments, and web portals. REMEDIATION SOLUTIONS For the Medicare Advantage market, Wipro provides comprehensive BPO services that include CMS enrollment, TRR/MMR (Transaction Reply Report/Medicare Monthly Review) Processing, Premium Billing, HCC (Hierarchical Condition Categories) Predictive Modeling and RAPS Submission for Risk Adjustment, all capable of handling the CMS' unique rules and regulations. Wipro Healthcare solutions for remediation are designed to accelerate the transition to the updated standards. The solutions are designed to address the practical challenges of the remediation-based transition. LOCALIZED REMEDIATION GAP ANALYSIS HIPAA 4010 implementations based on companion guides have unique requirements and business rules that are currently scattered as administrative edits over the IT stack. Wipro will undertake a gap analysis to assess the impact of change and develop a coordinated plan for an effective remediation. Wipro s gap analysis will recommend a reorganization of administrative edits for better manageability. BUSINESS CHANGE ALIGNMENT Synchronizing business policy, contract and process changes with the implementation of new standards needs careful analysis and coordinated planning. ICD-10 codes may have to be transformed to ICD-9 codes as some processes may continue to be based on ICD-9 for the interim. DUAL-STANDARDS SUPPORT Though compliance expectations post Oct 1, 2013 imply any encounter thereafter would be using ICD-10 codes, plans may allow 12-18 months of submission of claims with ICD-9 codes for pre-oct 2013 encounters. This necessitates operating the IT environments and business processes based on both ICD-10 and ICD-9. TRADING PARTNER TESTING READINESS The ability to automatically generate 5010 data from the current production 4010 with necessary data obfuscations and adjustments for creating specific test scenario is critical to conducting internal testing efficiently. The ability for trading partners to work interactively with the remediated systems by submitting their test data and receiving the response both from the compliance and adjudication standpoint is important to analyze issues and help Wipro will assist in the creation of exception policies processes and capabilities to effectively manage the likely increase in codification errors due to the initial learning curve associated with ICD-10 transition. Wipro will provide both ICD-10 and ICD-9 support during the transition. achieve a higher go-live success rate. Go-live success depends on the remediated systems readiness to work with trading partners effectively. Wipro s test suites for 5010 and ICD-10, and "Testing as a Service" will rigorously test and pre-certify remediated systems before they are integrated for trading partner testing. 13
REMEDIATION SOLUTIONS WIPRO S 5010 & ICD-10 ACCELERATOR METHODOLOGY Wipro's 5010 ICD-10 Accelerator Methodology is designed to specifically address transition challenges and help enterprises leverage the compliance initiative to their strategic advantage. The solutions are built to cover gap analysis & assessment, remediation, testing & compliance, and implementation. The planning and execution of each phase is accelerated through a collection of value-add tools. 1. ASSESSMENT recommends a collective review and impact analysis of both 5010 transactions and the ICD-10 Code Set to the customer s business and IT context. 2. REMEDIATION would be planned appropriately in alignment with the compliance schedule and the degree of impact. Remediation implements the necessary changes in the front-end, core administration and downstream systems along with refinement of administrative edits. 3. TESTING AND COMPLIANCE performs automated internal testing on the front-end through adjudication, third-party compliance certification and external trading partner testing. 4. IMPLEMENTATION assists the on-boarding of trading partners to the updated standards and transitions to maintenance and support. 5. POST IMPLEMENTATION, a life cycle tracking tool provides visibility to the operational performance of HIPAA transactions. Figure 7 - Wipro's 5010 ICD-10 Accelerator Methodology 14
REMEDIATION SOLUTIONS WIPRO S 5010 & ICD-10 TOOLS Wipro's 5010 & ICD-10 Tools are value-add frameworks designed to coexist and supplement the customer's IT environment that is expected to contain 5010 upgraded vendor products and applications. The tools include a range of artifacts - document templates, domain subject area specific business process templates, checklists, project plan templates, etc. meant to assist and guide the transition program in a structured fashion with higher chances of success. Wipro's solution tools can accelerate remediation efforts and automate a significant part of internal and external testing efforts. The Life Cycle Tracker is a posttransition tool deployed to monitor and manage 5010 transactions. Figure 8 - Wipro 5010 and ICD- 10 TOOLS ACCELERATING 5010 & ICD-10 - TRANSITION AND GOING BEYOND COMPLIANCE Accelerated remediation and testing through prebuilt solution frameworks, templates, libraries and test applications Faster and simplified on-boarding of Trading Partners who can independently test through a testing portal Compliance certification through independent third party partners Improved overall customer experience through the ability to monitor an integrated view of the X12 transaction life cycle 15
TEST AUTOMATION EMPHASIS As 70% of a 5010 transition is estimated to be consumed by testing and compliance, Wipro's solution is designed to accelerate it through a number of test automation tools and approaches. The solution methodology insists on a comprehensive approach to all types of testing. INTERNAL TRANSACTION TESTING CORE ADMIN / DOWNSTREAM SYSTEM TESTING COMPLIANCE CERTIFICATION TRADING PARTNER TESTING CORE CERTIFICATION Internal testing of inbound and outbound X12 transactions, SNIP (Strategic National Implementation Process) type validations, transformations through internal/obfuscated production data Testing of core admin/adjudication system integrations with 5010 & ICD-10 upgraded transaction data, the downstream impact of data and changes in business processes/policies Certification based on type 1-7 compliance and transaction compliance by a third party vendor Business-To-Business testing with trading Partners for X12 inbound/outbound after they are certified for compliance Optional certification by CORE (Committee on Operating Rules for Information Exchange) subsequent to obtaining HIPAA compliance SOLUTION DIFFERENTIATION There are several stand-alone compliance and testing solutions that tend to focus on verification of transaction integrity, validation of basic levels of HIPAA compliance, and Y2K oriented technical solutions that attempt automated discovery or conversions of impacted areas. Though some of these solutions may address specific areas of transition, they are largely designed to achieve basic compliance. Wipro s 5010 ICD-10 solutions differ from such solutions through strategic emphasis on leveraging the transition as an opportunity for reengineering based on what is applicable and most important to an individual customer's needs. The solutions are designed to validate round-trip business processes such as adjudication, not limited to validating transaction integrity and basic compliance levels. The solutions differ in that they can integrate and co-exist with the customer's IT stack, help accelerate remediation efforts, help validate entire business process, help improve readiness for trading partner testing and production golive and assist post-transition monitoring of the business performance of transactions. We consider our solutions strategic focus and its adaptability to unique needs of the customer environments to be key differentiators. 16
STRATEGIC FOCUS Wipro's solutions can be aligned to the customers' operations strategy whether it is to remediate their existing processes and systems to the 5010/ICD-10 standards or to outsource full service operations to a 360 degree - people, process, technology, next-gen solutions that complies with standards. Solutions provide a comprehensive approach to business process and IT system changes with a re-engineering focus enabled through a number of transition accelerators rather than basic compliance. Solutions contribute to better operations management of 5010 transactions in the post-transition production environment and are not restricted to mere transition enablement. ADAPTABILITY Solutions co-exist and integrate with other vendor products and technology stacks in a customer - unique - environment and provide value to the execution of transition. Testing solutions integrate with the remediated environment and validate roundtrip business processes such as adjudication beyond HIPAA compliance, reducing post-production business error scenarios. CLOSING REMARKS Although the transition to 5010 and ICD-10 standards is not a rewrite, it is a major effort with significant impact on most business processes and IT systems. It has external dependencies with trading partners on their readiness for testing and go-live schedules. It requires re-negotiating and re-working certain key business contracts and policies. It impacts both the revenue and costs of firms. The transition, if approached appropriately, can create a long term positive impact through enabling continuous improvements in operational efficiency, medical expense reduction, customer experience, etc. and help achieve better income and revenue growth. We recommend that healthcare firms consider the following to leverage the upgraded standards to their full potential of value creation. Analyze the transition of each of your lines of business and their IT systems with a strategic intent and align your solution strategy accordingly. Use the transition to re-engineer wherever possible, creating process improvements and reducing business-it challenges of the past regulatory implementations. Place a greater emphasis on testing and certification accelerated with test automation tools, trading partner selfservice testing, etc. Enable the right processes, policies, analytics and IT infrastructure to monitor the post-transition performance and to manage exceptions effectively. The transition can be achieved with a higher predictability and be turned to your strategic advantage when approached with comprehensive planning and analysis involving all the appropriate stakeholders. 17
ABOUT Wipro Technologies (NYSE:WIT), is the global technology services division of Wipro Limited. We are the world's 1st PCMM, CMM and CMMi Level 5 certified software services organization. Be it IT Services that empower the enterprise, Product Design Services to realize your R&D vision or Business Process Outsourcing for end-to-end remote processing services, Wipro offers a spectrum of services for your outsourcing needs. Our pioneering Offshore Outsourcing Model and Six Sigma quality processes underline our value proposition of delivering "Measurable Business Benefits" to the client. DELIVERING TECHNOLOGY-DRIVEN BUSINESS SOLUTIONS FOR OVER 25 YEARS 72 Global development centers, over 800+ clients and 100,000+ employees in 54 countries The world's largest independent R&D services provider and the world's largest offshore third party testing services provider One of the world's top offshore Indian BPO service providers & the largest offshore technology infrastructure management services provider The first company outside the USA to receive the IEEE Software Process Award AUTHORS Sangita Bhattacharyya Dr.Sandesh R Prabhu Brien Mitchell Garrick Taylor Prabhakar Ram Payer Practice Provider Practice Medicaid Practice Medicare Practice Healthcare Practice FOR MORE INFORMATION PLEASE CONTACT Arnab Bag - General Manager Wipro Healthcare arnab.bag@wipro.com or visit www.wipro.com/industries/healthcare USA: Wipro Technologies, 2 Tower Center Boulevard, Suite 2200, East Brunswick, NJ 08816. Phone: 732-509-1500 Corporate Office: Wipro Technologies, Doddakannelli Sarjapur Road, Bangalore - 560 035. Phone: +91 (80) 28440011. Fax: +91 (80) 28440256 Copyright 2010. Wipro Technologies. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission from Wipro Technologies 18