Advisory Board Exec: ICD-10 Isn’t Getting Credit it Deserves

May 18, 2015
Teaser: Twice in recent weeks, legislation regarding the transition to the ICD-10 coding set has been introduced into the U.S. House of Representatives. Executives from The Advisory Board Company adamantly disagree with those bills, and think it’s time for “all systems go.”

Twice in recent weeks, legislation regarding the transition to the ICD-10 coding set has been introduced into the U.S. House of Representatives. One proposed bill would potentially “prohibit the Secretary of Health and Human Services from replacing ICD-9 with ICD-10,” while the latest one is less drastic, and pushes for a required ICD-10 transition period following implementation on Oct. 1, 2015.

It remains to be seen if either of these bills will gain any traction, and generally speaking, there seems to be mixed reactions from industry stakeholders and the medical community on the value of ICD-10. Recently, an exclusive survey done by Healthcare Informatics, in conjunction with QuantiaMD, a Waltham, Mass.-based social network for physicians, found that doctors—many of whom have come out against ICD-10—are not backing down in their distaste for the mandate.

However, according to members of the Washington, D.C.-based consulting firm The Advisory Board Company, it’s time for the transition to finally happen. Specifically, Piper Su, vice president of The Advisory Board Company’s health policy division, says in regards to the proposed bills, “While a few members of Congress continue to voice concerns about the health system’s readiness for ICD-10, what we see this year is more widespread consensus amongst policymakers that the time has come to move forward.  The previous delays, combined with early results from end-to-end testing, alleviated some concerns that providers have not been given enough time to comply and are not ready to meet the deadline,” Su says. “Lawmakers are now coming to conclude that no amount of time will yield a perfect transition, so Oct. 1, 2015 may be a fair date for moving forward.  However, we expect concerns about the transition to continue, so we also anticipate that there will continue to be close scrutiny as we get closer to that date,” she adds.

What’s more, Ed Hock, managing director at The Advisory Board Company, says that the ICD-10 transition will benefit healthcare providers and patients and that another delay isn’t in the best interests of anyone. Hock says that providers need to prioritize efforts over the next few months to reduce risk. During his time as managing director at The Advisory Board Company, Hock has worked with more than 100 hospitals and health systems specifically on their transition to ICD-10, and focuses mainly on such provider organizations. He recently spoke with HCI Associate Editor Rajiv Leventhal about the industry’s current level of readiness for ICD-10, best strategies to reduce risk, and a key point that provider organizations are overlooking regarding implementation. Below are excerpts of that interview.

How would you rate the industry’s readiness for ICD-10?

Most of the industry is well on the path to readiness. We have seen that the amount of time has been a huge blessing to many providers, and we are also seeing providers—in the last 60 days especially—really accelerate their preparation once we got past the Sustainable Growth Rate (SGR) fix. That’s when things kicked into overdrive across the country. Now is the time for additional end-to-end testing, and the exchanges of data files will prove out if what we’re seeing is really the case. We’re just starting to see that play out though. Overall, [providers] are on a good path. 

Is the level of testing that’s going on right now thorough enough?

The level of testing varies widely from provider to provider. I was sitting with a dozen CFOs yesterday, and some of them in the room have tested thousands of files from a double coding perspective as well as exchanging with their payers. Overall, most were pleased with the results, but there is still interesting learning occurring. One provider said they were getting higher rates than they expected, positive results with payers, and all claims were going through. They realized some of the claims were going through ‘too smoothly,’ if you will. So that’s the type of learning we will uncover as we get closer.  Not just can you exchange claims, but are claims going to get denied that should or shouldn’t be? How will the real dynamics of coding and revenue cycle play out?

So how do you see this playing out?

Of course there will be some trouble; we feel the well prepared organizations will minimize most of that trouble. There are a number of things that can go wrong from the policy being adjudicated incorrectly or misunderstood, or coders not fully understanding all of the guidelines, or physicians not knowing all the documentation rules they need to follow. So even organizations that have their systems tested should look beyond that to ask themselves, ‘Are all my people who touch ICD-10 codes trained? Have we practiced, and made sure the work product that comes out of those tasks is acceptable as well?’

With dual coding, so many organizations say they are starting to dual code or already have, but the much more interesting questions are the second and third level questions on those dual claims. What type of reimbursement impact are you seeing, or what type of denial rates would you expect on those claims? Either those answers aren’t satisfactory or many providers haven’t yet asked those questions—they are still in the ‘figuring out’ period.

What are some of the best strategies you’re offering your clients to “reduce risk”?

Most organizations have done some aspect of this, but it’s again about looking across their hospital or health system and understanding every single area where ICD-10 codes come into play, understand and rank the risks in terms of impact to the organization, and then mediate and test each of those going forward. Also, at this stage especially, ICD-10 readiness needs to report up to the highest levels of the executive team. The CFO is the correct best practice in terms of who to report to. CIOs and HIM directors are part of the plan, but often don’t have a complete perspective of the financial side, or the ability to take urgent action if something is off track or not at the level it should be at.

There’s also some more forward-thinking stuff. I think something that’s overlooked is what will October 2 and beyond look like? You need to be able to quickly read, react, and adjust from there. For example, every hospital has a dashboard of financial metrics they follow. How quickly are they billing for the services they provide, and how long does it take to get paid for those? Those numbers will go through big periods of fluctuation; denials will go up, revenue will go down. So each organization should have to have an agreed upon, sophisticated plan. What are my acceptable levels and what is my trigger or plan to enact if one of these things goes above my acceptable level? What is the level where someone says we have to step in, whether that’s leadership team or outside help, to put that fire out, and readjust from there? Some of the metrics on that dashboard are based on benchmarks that are purely ICD-9 based, on the language we have used for the last 30 years. Organizations have to have a way to measure those things going forward. How does it compare to my peers, up or down? Hospitals are working to share their data back and forth, and that’s something we’re working on here at The Advisory Board.

Do you think organizations are thinking about post-October 1 as much as they should be?

Well, I think most providers are so focused on the here and now; they’re missing arguably the most important part, the post-ICD-10 transition. At a certain point in the next couple weeks, the plans that have been made are all we can do. You have to execute on those. If you think about any disruptive event in healthcare such as mergers or a new operating system, it’s about the planning beforehand, but also the leadership, execution, and planning how to deal with the inevitable is crucial. Even for those who aren’t as prepared as they thought they might be, a great leadership team and a plan to adjust quickly if something does happen will go a long way.

Overall, are providers on board with understanding the value of ICD-10?

I see it all over the place—there is a huge spectrum of people loving it and hating it. From a policy perspective, ICD-10 is not getting the credit that it deserves. If you think about where healthcare is going, it’s about understanding the value that’s been provided in the service that’s been rendered, and understanding the tradeoffs between higher value and higher cost. The fact that our current coding system doesn’t capture the approach in common procedures is a real fallback for organizations that are trying to make decisions on providing the best care at the lowest cost. It serves a valuable cause, and I think people do miss that.

With the granularity of all of the new codes, is there a way to make sense of it all in an easier way?

I think people get lost in the funny codes, such as ‘struck by turtles,’ but if you think about it from a ‘what do we want to really know about our patients?’ perspective, it makes sense. Why something happened is a really important aspect. We took an approach, we took all of these thousands of codes, and broke them down into the fewest clinical concepts that a physician has to learn in order to appropriately document. The number of new concepts is staggeringly low. For a fracture of a hand, for instance, it goes from 40 codes to something like 1,800, but there are actually only four new clinical concepts that a physician needs to know and include. And those four concepts are something that every doctor would tell you are medically important and easy to include in his or her notes. People go crazy over the 1,800 codes, but the narrative doesn’t tell the real story. It’s funnier to read a story about the crazy codes.

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