Revving up for ICD-10 amid wheel-spinning

To those who might define revenue cycle around the transactional function of charge capture, views are mixed on whether the ICD-10 implementation delay is disruptive or even hazardous.

Scott Hendrickson, Vice President, Revenue Cycle, Allscripts, dismisses that point. But only to a point.

“The lack of ICD-10 implementation has not yet disrupted the revenue cycle,” Hendrickson says. “As long as a revenue cycle solution can bring in the codes – ICD-9, ICD-10 or whatever is next to appropriately begin the billing process – it is ready for ICD-10. Because the solution is using the appropriate codes, [a] lack of adoption does not disrupt the flow or process.”

But don’t heave a sigh of relief just yet.
“However, healthcare organizations are feeling the financial impact because they are spending on readiness activities in multiple phases,” Hendrickson continues. “To begin with, healthcare organizations have invested in extensive training programs for their staff and physician community. Delays necessitate re-training, thereby requiring more spend. Additional readiness activities involve testing the billing process with the payers, including Medicare and Medicaid.”

Even when the shift occurs, Josh Berman, Director, Business Analytics & ICD-10 Lead, RelayHealth, McKesson, argues that the entire transition won’t happen quickly even after delays that should have granted enough time to make preparations.

“On the front end, doctors now have to be much more specific with their documentation,” Berman notes. “And the coding team has to be trained to handle those more specific notes. Increasing claim volume means the coding problem becomes much bigger. On the back end, there’s a possibility that a payer will not be ready on Oct. 1, reject ICD-10 codes and request ICD-9 codes temporarily. When that happens, the provider must be prepared to code for – and send – ICD-9 and ICD-10 claims at the same time. And this situation could last a while.”

Yet Ken Bradley, Vice President, Strategic Planning and Regulatory Compliance, Navicure, expresses concern about those organizations already prepared for ICD-10 if another delay emerged.

“As ICD-10 preparations continue, this function could be disrupted for ICD-10-ready physicians awaiting implementation,” he says. “Because the ICD-10 transition involves education along with IT upgrades, practices must work around the ICD-10-associated IT updates they’ve already completed while also putting their new knowledge of the code set on hold. Updates to systems where practices use paper or manual systems today, such as prior authorization and referrals, will sit ready to implement, while administrators can only hope the updates will still be correct when they are implemented.

“Where practices have engaged physicians to begin including the additional ICD-10 specificity in clinical documentation, practices will be in a position where they must ‘down code’ to less specificity using ICD-9,” he continues. “This is counterproductive. If the ICD-10 code was submitted, the practice would likely avoid payer requests for additional clinical documentation and ensure a more accurate payment with less administrative work.”

Through these delays, those practices and health systems that have invested in new electronic health record (EHR) and other IT systems capable of handling both ICD-9 and ICD-10 are not getting any return on their investments, according to Bradley. These organizations “should be taking advantage of the extra time they have had to prepare and continue with their planned IT updates,” he advises. This includes enhancing clearinghouse tools that can help address existing revenue cycle management complications and inefficiencies before ICD-10 arrives.

A panoramic view is necessary

New reimbursement coding represents more than just revenue cycle functions even though it will create challenges for them, according to Jim Riley, General Manager, Revenue Cycle Management, Emdeon.

“The ICD-10 transition is going to change how the business of healthcare conducts itself,” he says. “It’s more than just a code change. It’s actually a change in how healthcare interacts with each other, and that’s going to initially cause some difficulties around revenue cycle. The top-of-mind issue for everyone right now is ensuring that they will be reimbursed properly. The biggest issue is going to be submitting clean claims and minimizing denials during the transition. As we continue to look at the movement to ICD-10, there is no doubt it will cause disruption, especially as the industry adapts.”

This transition is critical and inherent to clinical documentation and workflow, according to Jeanice Van Liew, Vice President and General Manager, Revenue Cycle Management, Netsmart.

“While charge capture is a key element in the revenue cycle, it is a core function of clinical documentation,” she says. “Providers document and select the applicable codes as a by-product of clinical workflow. The processes [and] workflow within the EHR allow providers to make selections and move on with an automated process of capturing the applicable charges.

“In primary care, the clinician declares the diagnosis on each and every visit as part of a standard workflow,” Van Liew continues. “In behavioral health, providers have a challenge in the timing of capturing the diagnosis in relation to the services being claimed. In an outpatient behavioral health setting where admissions span weeks, months or even years, there is no standard workflow that updates the diagnosis prior to charges being captured.”

But Crystal Ewing, Senior Business Analyst and Manager, Regulatory Strategy, ZirMed, urges healthcare IT professionals to look on the bright side and think positively.

“ICD-10 brings a wealth of additional granularity and new, rich data points,” she emphasizes. “The revenue cycle world should welcome ICD-10 with open arms – they just need to be sure they have the IT horsepower to harness it. Data mining is the key to uncovering missing charges rather than simply flagging the obvious ones, so the potential depth and precision of any charge integrity analytics are directly tied to the granularity of the data, which will increase dramatically with the implementation of ICD-10.”

Making fixes on the run

Until ICD-10 becomes effective this October, how can healthcare IT improve the revenue cycle process for better margin management?

ZirMed’s Ewing takes a long view.

“You need upstream intelligence,” she insists. “By that I mean your analytics have to run upstream from the charge information and determine whether there’s a more appropriate code that would also lead to higher overall reimbursement. That has to happen before the claim is submitted to the payer, which is only possible at the enterprise level through the application of predictive analytics – the data is far too massive to manage manually.”

Other experts stress operational and process comprehension.

“One of the key ways to improve margin management is to understand your business and the baseline metrics needed to measure the business,” Emdeon’s Riley says. “Creating key performance indicators to measure long-term goals is one of the most effective tactics for improving the revenue cycle process. When ICD-10 implementation actually occurs, you will need to communicate with your payers and your clearinghouses throughout the transition. It is better to be proactive and participate in end-to-end testing beforehand, and not only participate but go into these tests with a clear idea of what you want to test, providing sufficient time to do so. Make sure your policy is in line as it relates to coding so you have a base of operations. Working from a strong foundation is crucial.”

Allscripts’ Hendrickson concurs.

“Healthcare IT can help improve margins by preventing claim denials and improving clinical documentation,” he says. “Healthcare IT can also encourage greater efficiency via beginning-to-end automated workflows. Organizations are investing in tools that enable accurate data capture during front-end workflows. These efforts will reduce the re-work that often occurs during the billing process. Speed-to-bill is also an important component of an effective revenue cycle, decreasing the delays in billing to augment margin management. In addition, many organizations implemented optimization reviews that provided an opportunity to make improvements in the revenue cycle ahead of the potential ICD-10 challenges.”

Overlapping may be a virtue, too, according to Netsmart’s Van Liew.

“We recommend providers begin capturing both ICD-9 and ICD-10 codes well in advance of the effective date to begin to identify trends that may be cause for concern after ICD-10 takes effect,” she advises. “All indications are that, over time, unspecified diagnoses will either result in lower reimbursement or no reimbursement at all. By reviewing the current practices within their organizations, leaders can conduct analyses to understand how many unspecified diagnoses are currently being captured. While the current ICD-10 revenue analysis has been primarily focused on acute care, we know certain DRGs (diagnosis-related groups) like major depressive disorder may have a serious impact on revenue when left as ‘unspecified.'”

Rather than hope for yet another delay, Navicure’s Bradley suggests healthcare organizations use the looming ICD-10 activation as a launching point.

“ICD-10 can be a catalyst for practices to review all revenue cycle processes, especially denials management, since denials are expected to increase by as much as 200 percent post-transition [according to a February 2013 Healthcare Financial Management Association report],” he says. “New clearinghouse IT functionality could be used to trend and track denial reasons for more effective denial handling and prevention. This, in turn, could lead to broader implementation of business intelligence tools that can be used to monitor other key revenue cycle statistics, including days in accounts receivable (AR), percentage of AR greater than 120 days and net collection rate. All of these metrics should be data that practices are tracking, and it is always a good idea to take time to evaluate the benchmarks to further identify areas for improvement.”

Bradley contends that these clearinghouse tools can help benchmark key revenue cycle management indicators before and after ICD-10 implementation and can identify problems with individual payers, allowing practices to rectify those issues prior to ICD-10 going live. RelayHealth’s Berman recommends some practical tactics to shape your strategic outlook.

“Buy credits now for the debits that are coming Oct. 1 and after,” he says. “Start looking at KPIs (key performance indicators) that you can improve now to be prepared for the deadline. These can improve your bottom line today, in advance of what will inevitably be a downturn when ICD-10 goes live. Also, testing is important, but many healthcare providers are testing ICD-10 claims to determine if the payers are ready. They should, however, be testing to ensure their own readiness.”

“Making sure all systems, processes and vendors are compliant sounds pretty basic,” says Berman, “but some providers are still behind schedule.”