Moving Forward on ICD-10: Harder Than It Looks

April 9, 2013
The Advisory Board Company’s Ed Hock shares some of the learnings coming out of his organization’s work with client hospital organizations, which includes very granular modeling of the potential effects of the ICD-10 transition on reimbursement for specific hospital procedures and treatments

Earlier this spring, The Advisory Board Company, a Washington, D.C.-based research, technology, and consulting firm, held a conference focused on the challenges involved in the transition to the ICD-10 coding system. Among the speakers at and organizers of  the conference was Edward Hock, senior director, revenue cycle solutions, for The Advisory Board Company. Hock is an expert in ICD-10 implementational issues. He oversees all of the firm’s work in the ICD-10 arena, from consulting work to collaboration with the company’s research team, to involvement with some of the technology development going on there.

Hock spoke recently with HCI Editor-in-Chief Mark Hagland to share his perspectives on patient care organizations’ progress towards the ICD-10 transition, and his advice on what CIOs and other healthcare IT leaders need to do right now to be successful in that area. Below are excerpts from that interview.

Where do you see the industry right now in terms of ICD-10 preparedness?

The industry itself still has quite a ways to go. And the announcement by HHS[the Department of health and Human Services] both reflected political pressure for a delay, and also acknowledgment that people were still quite far behind. At the same time, there was a small group of hospitals that were disappointed in the delay, because they were well ahead. But the vast majority of mid-sized and smaller hospitals were relieved, because they’re still struggling. And there’s this huge gulf: not only do they need to have their coders up and ready; but the question remains, have they taken the time to understand, analyze, and mitigate some of the changes? The delay now gives them time to test, because they wouldn’t otherwise have had the time to test.

Edward Hock

Did the Advisory Board Company take a position on that issue?

No, we never take a policy position.

So where are the most advanced hospital organizations right now on all this?

Everybody knows they’ve got to train their physicians. But what do you need to train an individual physician on, and how do you get down to the nuts and bolts of the training, and doing it in a very methodical way—how do you do that? We’ve been working with about a dozen member organizations, to really take that down to a data- and document-level approach; that’s been very exciting. And another thing that the advanced people are getting to is that there are just going to be certain procedures that will simply be reimbursed differently in ICD-10, either more or less, because of a combination of two things—the specificity of the ICD-10 codes; and the new ICD-10 grouper that’s been published by CMS [the federal Centers for Medicare and Medicaid Services].

What we’ve been doing is to help organizations understand, with 100 ways to get paid under ICD-10 codes, what might happen. Let’s take just one example, DRG 237, “other endovascular procedures.” Under ICD-9, it usually gets paid $15,600. Now, under ICD-10, the same treatment might be coded as DRG 237, with the description, “occlusion of the right femoral vein, with intraluminal device, open approach,” and results in a payment of $15,600, or the same level. But the treatment involved might alternately be designed as DRG 263, “occlusion of right femoral vein, with percutaneous approach,” and that one gets paid at $5,400. And the thing to remember is that hospitals are moving towards less-invasive surgical approaches, which means in some cases, they’ll be paid less than today, though in some cases, they’ll be paid more. So while the set of changes being ushered in was intended to be revenue-neutral industry-wide, within individual services, procedures, and hospitals, it isn’t necessarily revenue-neutral.

And as a result, hospital leaders beginning to look at which service lines they should focus on, and which they shouldn’t, going forward. So a particular hospital might lose reimbursement in their neuro unit and gain in their cardiac unit, for example. And CFOs need to understand that now.

So we’re literally helping people break out their data and run it through the ICD-10 grouper; and as far as I can tell, we’re the only organization doing this with any level of granularity. And they’re having to look at something like two times 10 to the 18th permutations involved in analyzing what might happen under the new system; it involves some massive number of possible variations.

What is the takeaway from this for hospital and health system CIOs?

The key thing, for CIOs, will be for them to educate their CFOs and finance teams on this type of impact. Because a lot of times, CFOs have delegated this work to CIOs and others within the organization. So they need to start the conversation now about how this will affect their volumes and reimbursement.

Because it will be very challenging to figure all this out, right?

Yes; on a manual basis, they can probably do it on some of their most important procedures, but it’s virtually impossible do this on any broad scale, without the kind of sophisticated technology we’re using.

And the other thing you’re hearing, and we would concur with, is, be ready a year ahead of time, so you can put your organization through its paces; ICD-10 testing is more invasive than anything we’ve had to test in the past few years, because it’s not just testing an information system. As rigorous as meaningful use testing is, with ICD-10, it’s financial, and you’re also testing individuals, such as physicians, for proper coding processes, etc. And some organizations are tempted to put off physician training until close to the deadline. But what we’re hearing is that they can only teach physicians one or two concepts at a time, and it will take months for them to really learn those things. And when you’ve got dozens of concepts embedded, you need to start now, so you can teach the concepts one at a time, each quarter, and to inspect to make sure you’re doing it right and they’re getting it right.

It’s fascinating.

Yes, and frankly, a lot of the stuff people have been saying is boring; it’s the same stuff people have been talking about for 18 months. But at our summit, people really were buzzing with ideas and shared conversations, the people who were already ahead in this process.

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