ICD-10 Implementation: No Margin, No Mission October 6, 2014 Subtitle: ICD-WHEN? Page 0 Agenda ICD10 Background ICD9 ICD10 Transition ICD10 Assessment Tasks ICD10 Assessment Considerations ICD-10 Areas of Impact No Margin, No Mission Risk Mitigation Important Metrics Questions Page 1 ICD-10 Background The US uses two adaptations: CM: Clinical Modifications for diagnoses ICD-10-CM Developed to reflect current clinical understanding and medical technological advancements Provide more consistent level of detail Extensive clinical concepts, specificity, patient encounter information ICD-9 contained ~14,000 codes ICD-10-CM contains over 69,000 codes PCS: Procedure Coding System ICD-10-PCS Procedure Codes Particular to the US Inpatient Setting ICD-9 contained ~3,800 procedure codes ICD-10-PCS contains over 68,000 codes PROVIDER Page 2 1
ICD-10 Background Migration to a new diagnosis and procedure coding standard Impacts all areas of the healthcare industry Hospitals Information Systems HIM Revenue Cycle Patient Accounting, Patient Access Clinical Documentation Clinical Documentation Specialists and Physicians Ambulatory Physicians Home Care, Hospice, Care Management, Referrals, Discharges Policies / Procedures Selected hospital processes Penalties Uncertain Page 3 ICD-10 Background ICD-9 to ICD-10: ICD-10 Must Replace ICD-9 by October 1, 2015 ICD-10 Introduces More Specificity in the Codes 2X to 5X ICD-10 Includes Laterality as part of the Coding ICD-10 Coding Yields a Higher Level of Precision ICD-10 Expands the Coding Length from 5 Positions up to 7 ICD-10 Coding Syntax Includes More Alpha Characters Documentation will Need to Expand to Support Higher Specificity ICD-10 Changes will Require Substantial Provider Education ICD-10 Coding Changes will Require Training for Coders, Reg/Sched, Business Office Staff, Home Health, Care Management Page 4 ICD-10 Transition What Specifically will be Impacted? Systems Interfaces Forms Reports Clinical Processes and Workflows HIM Revenue Cycle Any Entity that Uses or Feeds Data with ICD Codes Other Projects Current ICD Training Budget Financials Page 5 2
ICD-10 Assessment Tasks Develop Charter and Work Plan Conduct Interviews Tabulate Major Systems Determine Data / Reports Needs Develop Communiqué and awareness presentation Developed Templates Contact Vendors, Assess Status and Dates of Planned Readiness Review Reports Data, Determine Metrics Conduct Chart Review Capture Other Projects Timelines Record and Measure Risks Make Recommendations Develop ICD-10 Transition planning budget Develop Detailed Education / Training Plan Develop Staffing plans Determine Financial Risk Page 6 ICD-10 Assessment Considerations Areas to Think About: Reporting Competing Projects Physician Impact Timing, Venue, Vendor of Physician and Staff Education Physician population and Charges distribution Electronic Medical Records (EMR)Tools Intelligent Medical Objects (IMO) First Pass denials and write-offs Transition timing and effort Effectiveness of Clinical Documentation Improvement program(s) ICD-10 major areas of impact Traumatic Brain Injury (TBI), Ortho, Cardio, High Risk Pregnancy & Delivery, Peds ICD9 Codes ICD10 Codes (over 800) Angioplasty 36.91or 36.99 02Q00ZZ = Repair coronary artery, one site, approach open Page 7 ICD-10 Primary Areas of Impact Coder productivity and accuracy declines Physician and reimbursement impacts Systems upgrades First pass denials Page 8 3
Coder Productivity and Accuracy Declines Impacts Projected productivity declines of 30% - 50% Permanent impact of 10% -15% Accuracy slippage of 15% - 20% Temporary and permanent staff costs Increased Physician Queries Increased audits Training time and cost Need for Computer Assisted Coding Results Delayed claims Rejected claims (first pass denials) Operating costs increase Staff, audits, training, overtime Underpayments Page 9 Physician and Reimbursement Impacts Impacts Physician clinical documentation time increase 25% - 50% Physician dissatisfaction Clinical Documentation Improvement Specialist strain Permanent staff costs (added CDI staff) Increased first pass denials Write-offs risk Increased Accounts Receivable days Results Incomplete documentation yielding wrong codes Operating costs increase CDI staff, training, EMR tools Underpayments No pays Cash flow and / or decreased payments Page 10 System Upgrades Impacts Implementation time Competing projects Staffing needs for implementation and testing Additional training Interfaces Results Operating costs increase Project Management staff, EMR tools, testing Staff overtime New software costs Page 11 4
First Pass Denials Impacts First Pass Denials increase 40% - 60% Temporary staff Write-offs risk risk of doubling write-offs Increased Accounts Receivable days Results Operating costs increase Temporary staff, staff overtime Increased write-offs Cash flow Page 12 No Margin, No Mission Reduced payments due to lack of specificity Reduced payments due to incorrect codes First pass denials that evolved to write-off status No pays Interest paid on funds to cover the gap created by reduced cash flow ICD-10 Implementation Costs: Coding staff, Clinical Documentation Improvement staff, temp staff Staff Overtime Projected ICD-10 Implementation Costs in 000's EMR tools $616 $1,143 Computer Assisted Coding Project Managers $1,080 Training $1,669 $2,264 Testing External Audits Training Temp Staff Perm Staff SW Upgrades Testing Page 13 How Do We Mitigate the Risk? Initiate a Clinical Documentation Integrity Program Implement Physician Assist Tools in the Electronic Medical Record System Implement Computer Assisted Coding Conduct vigorous end-to-end testing with Payers Conduct Dual Coding with audits Enhance the First Pass Denials process(es) Model reimbursements from dual coding and testing Renegotiate Payer contracts Educate and Train Page 14 5
Important Metrics Clinical Documentation ICD-10-PCS Code Structure From this to that Page 15 Important Metrics Based on Fifty Hospitals 3,500 5,000 ICD-9 codes are typically used High Use Dx codes by Specialty generate 40% -80% of charges 35% of ICD-9 codes used are NOS or Unspecified Top 25 DRGs yield 35-45% of all charges Case Mix Index averages 1.38 Coder accuracy is 95% 25% of Docs generate 80% of all Charges Clinical Documentation Integrity Programs 1H 2014 17.3% increase in CMI $2MM - $22MM annualized increased payments Page 16 Important Metrics Physician Billing Page 17 6
Important Metrics DRG Deep Dive Top DRGs by Product Line - FY 2012 May YTD DRG DRG Volume Description Service Line % of Total w/in Service Line 621 179 O.R. PROCEDURES FOR OBESITY W/O CC/MCC General Surgery 17.8% 330 64 Major small & large bowel procedures w CC General Surgery 6.4% 343 51 Appendectomy w/o complicated principal diag w/o CC/MCC General Surgery 5.1% 627 42 Thyroid, parathyroid & thyroglossal procedures w/o CC/MCC General Surgery 4.2% 329 40 Major small & large bowel procedures w MCC General Surgery 4.0% 331 40 Major small & large bowel procedures w/o CC/MCC General Surgery 4.0% 327 30 Stomach, esophageal & duodenal proc w CC General Surgery 3.0% 620 28 O.R. procedures for obesity w CC General Surgery 2.8% 580 26 Other skin, subcut tiss & breast proc w CC General Surgery 2.6% 853 26 Infectious & parasitic diseases w O.R. procedure w MCC General Surgery 2.6% 52.2% 743 76 Uterine & adnexa proc for non-malignancy w/o CC/MCC Gynecology 39.2% 742 46 Uterine & adnexa proc for non-malignancy w CC/MCC Gynecology 23.7% 745 20 D&C, conization, laparoscopy & tubal interruption w/o CC/MCC Gynecology 10.3% 747 13 Vagina, cervix & vulva procedures w/o CC/MCC Gynecology 6.7% 748 12 Female reproductive system reconstructive procedures Gynecology 6.2% 86.1% 974 8 HIV w major related condition w MCC HIV 34.8% 975 6 HIV w major related condition w CC HIV 26.1% 977 5 HIV w or w/o other related condition HIV 21.7% 82.6% Page 18 Important Metrics Dx Codes by Service Line Summary 7.8% of Dx Codes represent 63% of all D/Cs Page 19 Important Metrics Dx Codes by Service Line Detail 25 Dx Codes used yield approximately 38% of all Charges 179 Dx Codes used yield approximately 58% of all Charges Page 20 7
Important Metrics Prioritizing Documentation Specificity 12% of Docs generate 65% of all charges Tailor Physician Awareness based on Top Dx and DRG codes by Service Line Page 21 ICD-10 Compliance Impacts Clinical Documentation Integrity Accuracy and Applicability Audits Ambulatory Physician code selection Accuracy of EMR mapping tools Quality Panel reports Other reports referencing Diagnostic codes Computer Assisted Coding Order Sets, Care Plans / Policy changes? Training compliance (Physicians) mandatory? Outcomes review Chart Reviews Review Testing results Review reimbursement modeling results Page 22 Deliverables Examples - Chart Review Recommendation documentation includes: Risk ICD-9 Dx Dx Description Be sure H 518.81 Acute Respiratory Failure Acute, Chronic, or Both Hypoxia Hypercapnia Post-procedural or Not Post-Procedural 6 ICD-10 Codes H 852.22 Subdural Hemor Follow Inj w/o Open Traumatic or Nontraumatic Intracran Wnd; w Brief [Less Than Intracranial abscess and granuloma One Hour] LOC Subdural hemorrhage with or without loss of consciousness Sequela Extradural hemorrhage following injury with or without open intracranial wound Duration With or without concussion Initial Encounter or Subsequent Encounter 13 ICD-10 Codes Risk ICD-9 Px Px Description Recommendation Be sure documentation includes: M 38.97 Central Venous Catheter Placement With Guidance Measurement or Monitoring Flow, Pressure, Pulse, or Saturation Central, Peripheral, Portal, or Pulmonary Percutaneous, Open, or External 14 ICD-10 Codes M 51.10 Endoscopic Retrograde Cholangiopancreatography [ERCP] Map, Release, Reposition, or Repair Spleen, Epiglottis, Esophagus, Stomach, Duodenum, Jejunum, Ilium, Cecum, Appendix, Rectum, Anus, Mesentery, Liver, Gallbladder, Pancreas, Bladder, Urethra Open or Percutaneous 44 ICD-10 Codes Page 23 8
Transition Tasks Systems Remediation Coordination of Systems / Interfaces Upgrades and Implementations Installation and Implementation of Compliant Systems Testing Unit, User Acceptance, System, End-to-End (Interfaces) Development of Detailed Education / Training Plan and Timeline Education / Training Delivery, Roadmap, Sources Development of Physician Assistance Tools/Templates Process Change of Identified Areas if needed Referrals Care Management Denial Management Physician Queries Analysis and Selection of Software Tools (if required) Clinical Documentation Enhancements and Standardization Develop Staff Contingency Plans Partner/Vendor Monitoring and Outreach Reimbursement Analysis and Payer surveys Communication - Physicians Page 24 Questions? Page 25 9