1. ICD-10 & Patient financial services
Stacey L. Harper, RHIA, CPC, CPMA
Senior Manager, WeiserMazars LLP

2. Agenda Introduction ICD-10 Overview Impact of ICD-10 to Non-HIM Areas
Hidden Costs for ICD-10 Transition
Preparing for the Transition

3. ICD-10 Overview

4. What is ICD-10?
ICD-10 is a diagnostic coding system implemented by the World Health Organization (WHO) in 1993 to replace ICD- 9, which was developed by WHO in the 1970s. ICD-10 is in almost every country in the world, except the United States.

5. Deadline for compliance:
Introduction to ICD-10
ICD-10 is the new coding set that replaces the current set, ICD-9
ICD codes are used to assign diagnosis and procedure information to claims in order to generate reimbursement
ICD-10 is the biggest change in standard coding systems in over 30 years
Deadline for compliance:
October 1, 2014

6. Implementation on October 1, 2014
ICD-10-CM: Diagnosis coding
Used for inpatient and outpatient
Used by providers, coding and other clinical/operations staff
ICD-10-PCS: Procedure coding
Used for inpatient only
Used primarily by coding
CPT© codes will continue to be used for outpatient procedure coding

7. ICD-9 vs. ICD-10

8. ICD-9 vs. ICD-10

9. ICD-9 vs. ICD-10

10. ICD-10 Procedures

11. Key Notes on the ICD-10 Transition
A substantial percentage of ICD-9 codes do not map one-to-one to ICD-10 codes; this requires human intervention to determine the correct code
The codes do not map the same ‘forward’ (ICD-9  ICD-10) as they do ‘backward’ (ICD-10  ICD-9)
Although CMS has published a translation tool, it has left the specific determinations up to each of the individual payers to derive how to interpret the codes and the mapping
DRG reimbursements to Hospitals are based on ICD-10 groupings and will change
The code change effective date is based upon discharge date; consequently, there will be a large window (~3 years) in which both ICD-9 and ICD-10 codes will need to be accepted (dual processing)
Source: HIMSS Virtual Event 2011

12. Benefits of ICD-10 Greater coding accuracy and specificity
Higher quality information for measuring healthcare service quality, safety, and efficiency
Improved efficiencies and lower costs
Reduced coding errors
Greater achievement of the benefits of an electronic health record
Recognition of advances in medicine and technology
Source: HFMA

13. Benefits of ICD-10 (cont.)
Alignment of the US with coding systems worldwide
Improved ability to track and respond to international public health threats
Enhanced ability to meet HIPAA electronic transaction/code set requirements
Increased value in the US investment in the SNOMED-CT
Space to accommodate future expansion
Source: HFMA

14. Specificity looks like this…
One-to-Twenty-Four Mapping
ICD-9-CM
821.01
(Fracture, femur, shaft, closed)
ICD-10-CM
S72.301A
S72.301G
S72.302A
S72.302G
S72.309A
S72.309G
S72.321A
S72.321G
S72.322A
S72.322G
S72.323A
S72.323G
S72.324A
S72.324G
S72.325A
S72.325G
S72.326A
S72.326G
S72.331A
S72.331G
S72.332A
S72.332G
S72.333A
S72.333G
S72.326A Nondisplaced transverse fracture of shaft of unspecified femur, initial encounter for closed fracture
S72.326G Nondisplaced transverse fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing

15. Key Areas of Impact
Source HIMSS Virtual Event 2011

16. How does ICD-10 affect your facility?
This coding change affects the entire Health System including revenue cycle, medical operations, payers and other vendor contracts and a significant number of information systems
CLAIMS
SYSTEMS
PEOPLE
VENDORS
Numerous information systems will require remediation prior to go-live
Includes core billing systems
Each system change will require testing and training by IS and the end- users
Thousands of staff directly impacted by change
Clinical providers, coding & revenue cycle staff will require in depth training
Staff will need to be involved in integrated testing of system changes
The majority of payors in the nation will be required to convert to ICD-10
Payer systems will require updates and testing
Other vendors are also affected by the change (i.e. registries, clinical outcomes data)
Every claim generated by each facility will be affected
Payer contracts will require review
Improved documentation will be required to support coded claims

17. Impact of ICD-10 to Non-HIM Areas

18. Who Needs to Understand ICD-10?
Beyond coders…
PFS leadership as payers may reject based on ICD -10 coding and medical necessary codes
PFS leadership and contracting to ensure contracts can accept both ICD-9 and ICD-10 on the UBs post go live
Utilization review and all care management as payers will need to be able to do pre-certifications and concurrent review with ICD-10
Decision support and all areas using ICD-9/10 coding for tracking, reporting, etc. (Trauma registry, outcome comparisons, contracting, etc.).
IT leadership must be involved to ensure all impacted areas are ready

19. Other Non-HIM Uses for ICD-9/ICD-10
Reimbursement by payers
Medical necessity screening
Quality of care indicators
Outcome measurements
Medical care review
Method to index medical records
Storage and retrieval of dx data

20. Other Non-HIM Uses for ICD-9/ICD-10
Utilization patterns and review by payers
Research data
Statistics
Reasons for Denials
Monitoring and analyzing the incidence of disease and other health problems
Identify health care trends
Future health care needs

21. Patient Access Impacts
Systems
Core Financial System
Eligibility Systems
Patient Liability Estimation Systems
Case Management Tracking
Workflow & Process
Pre-authorization
Admissions
Preauthorization (278) & Eligibility (270/271) transactions
ABNs
Denials Management
Policies, procedures and job descriptions that refer to ICD-9 functions

22. Patient Access Impacts
Training
PAS & Pre-Auth Professionals
ICD-10-CM Basics
Resources
Testing and training resources as needed to upgrade affected systems according to IS plan
Resources to participate in payor testing as necessary
Pre-authorization backlog prevention plan
Potential slow down with payor processes post go-live
Evaluate and pursue educational seminars and resources relevant to PAS; i.e., NAHAM, HFMA, HIMSS

23. Patient Financial Services Impacts
Systems
Coding/abstraction software
Core Financial Systems
Bolt-on Financial Systems
Billing Clearinghouse
Denials Management Systems
Payment Variance Software
Patient Liability Estimation
Reporting Databases
Case Management Software

24. Patient Financial Services Impacts
Workflow & Process
Integrated testing & planning with payors
Potential for slower and lower collections initially
ICD code reports
Changes in payor contracting language around ICD-10 compliance and how it impacts claims
Denials Management
Review & update policies, procedures, and job descriptions as necessary

25. Other clinical impacts
Authorization & notification – services and conditions that require prior/concurrent authorization or notification on September 2014 will need to be managed through transition
Utilization Management (UM) – services and conditions that a health plan seeks to engage in UM activities will need to be managed through and post transition
Post-Hospital Follow-Up Programs (i.e. CHF) – will need to be identified for effective outreach and case management through transition

26. Other clinical impacts
Complex Case Management (CCM) – outpatient conditions requiring concurrent case management support need to be effectively identified and monitored through transition to ICD-10
Disease Management (DM) – strategies for identification and stratification for selection of DM programs will need updated for ICD-10
HEDIS Reporting, STARS ratings and accreditation documentation – these supporting data elements need to be captured without gaps and effectively measure historical trends

27. Hidden Costs of ICD-10 Transition

28. Financial Impacts
Need to plan for decrease in productivity to prevent billing backlogs during training and initial implementation
Other countries, including Canada, have reported an increased number of days in coding turnaround in the immediate ICD-10 go-live period
Based on actual data from a large urban community hospital in Toronto Ontario Canada, staff productivity never rebounded to pre-ICD-10 levels for some patient types.

29. Financial Impacts
New information demands to support the coding process could result in potential increases in Accounts Receivable (AR) days, increased rate of claim denials and lost/deferred revenue
AHIMA estimates that tertiary hospitals and hospitals with a varied case load will have a greater lag time returning to normal productivity than those hospitals whose case-mix range is relatively small and well defined as the staff are introduced to the wide variety of codes

30. Potential Hidden Costs
Back log of uncoded claims with ICD-9 while trying to get coders ready for ICD-10. Remote coding may need to occur as well as OT.
Rejected claims from payers who are not ready to accept UB-04 with ICD -10 PLUS ICD-9 as necessary.
Vendor software rejecting ICD-10 or edits not working correctly thus slowing claim submission. Manual intervention to ensure claims are submitted and accepted.
New software if existing software for related ICD-10 work is not compatible.

31. More Hidden Costs
Cost to conduct a ‘risk assessment’ to assess current documentation patterns for providers and care givers.
Cost to conduct training for providers and care givers on enhanced documentation
Cost to review EMR or other software to adapt to enhanced documentation requirements
Cost to conduct a ‘readiness assessment ‘ pre go live to determine readiness of coders, documentation and vendors.

32. More ….
Loss of productivity – rebills, denials, rejections, EOB work, medical necessity rejections/follow up
Loss of productivity – excessive physician queries, coder slow down with new coding process
Growth in the discharged not final billed…
Potential impact to the Case Mix Index
Cost of implementing a clinical documentation improvement program
Cost of EMR changes and training of all impacted staff
Cost of any changes to the functionality of the any software and training costs

33. Preparing for the Transition

34. ICD-10 Goals: Organizing the Effort
Seamless transition to ICD-10
(meet regulatory/payer requirements)
Maximize the benefits of ICD-10 transition
Support physicians with implementation
Provide thorough education & training
Enhance quality & reimbursement outcomes
Leverage innovative solutions/ technology
Coordinate technology & resource needs
IMPLEMENTATION APPROACH
Project Oversight
Remediation
Benchmarking & Monitoring
Develop communication plans
Develop direction, scope and outcomes of work stream teams
Coordinate efforts & resources to ensure appropriate project progression
Manage day-to-day activities and challenges
Update and test systems
Educate thoroughly; test and re-test aptitude
Coordinate and team with payers
Revise policies, procedures & workflows
Develop monitoring tools and dashboards
Determine benchmarks and post-live goals
Measure, measure, measure, MANAGE

35. Billing Cycle Coding Loop Billing Loop Coding Issue Resolved?
Physician Documentation
Coded Data
HIM Coding
Billing Loop
Coding Specificity?
Bill Creation and Editing
DRG Groupers
Physician Query
Claims Denial?
Claims Submission
Bill Payment
Electronic Funds Transfer

36. Payer readiness
UB submissions with ICD-9 and ICD conversion dates
Denials with new reasons –as ICD-10 is far more specific
Contract language that addresses ICD-10 inclusions/exclusions
Claim scrubbers/payer scrubbers – ABN issues (LCD/NDC dx codes/CMS), ‘if ‘ rules, edits
Pre-authorization process/coverage

37. Duality of Systems
Will payers, vendors (claim submission and scrubber) and other IT systems be able to handle ICD-9-CM as well as ICD-10-CM and ICD-10-PCS at the same time?
Rebills of pre-conversion, medical necessity software, scrubbers, ensuring all payers are ready to convert AND test with each payer = critical to the successful conversion.
Don’t forget all payers (Medicaid, Worker’s Comp, etc.)

38. Considerations for PFS
Budget
ICD-10 training specific to PFS staff that falls outside of enterprise offerings
References, books and tools specific to PFS for ICD-10
Training time allocation for all impacted staff receiving ICD-10 training
Staff time allocation for relevant system upgrades, i.e., testing applications, training, etc.
Estimate additional hours for PFS staff for late 2014 and 2015 for the ICD- 10 transition due to negative productivity
Business Associates
Confirm the ICD-10 transition plan for any affected third parties:
Denials & Appeals agencies
Eligibility software
Worker’s Comp
Outsourcing for follow-up functions
Bad debt & early out functions

39. Considerations for PFS
Jobs & Competencies
Assess affected jobs and competencies across the Department
Evaluate and estimate impact to PFS productivity/output for the initial stages of the transition
This area will be working in a 'hybrid' environment of ICD-9/ICD-10 initially
Revise impacted job descriptions to incorporate ICD-10 skill set and knowledge base
Policies & Procedures
Review all existing policies and procedures for department to determine if any must be updated due to ICD-10
Determine if any new policies and/or procedures need to be created as a result of the ICD-10 implementation
Finalize all policies and procedures related to ICD-10

40. Considerations for PFS
Reports & Data Extracts
Confirm all active ICD code reports for PFS
Understand implications to reports and data extracts for both internal and external reporting as applicable as a result of the ICD-10 transition
Modify and test reports for the ICD- 10 world
Consider capabilities when needing to compare ICD-9 to ICD-10 state
Systems, Applications & Databases
Solidify ICD-10 upgrade and transition plan for all affected systems, applications & databases:
Core financial systems
Interfaces
Billing clearinghouse
Reporting databases
Eligibility software
Case mix/DRG groupers
Case management functions
Patient liability estimation software
Registries and external reporting

41. Considerations for PFS
Payors
ICD-10 testing plans with payors should be underway or commencing shortly
Develop payor report cards for pre/post-transition to compare metrics and performance
Keep communication open during and post-transition
Potential errors!
Payors (including Medicare/Medicaid) are correcting medical policies (LCD/NCD, etc.) which are diagnosis driven; this leaves potential for errors and gaps that will need worked out over time
Post Implementation Plan / Evaluation
Develop post implementation plan to evaluate the following items:
PFS staff adoption of ICD-10 education & transition to determine if and where follow-up training is needed
Outcome of transition regarding system changes and payor workflow
Revenue & reimbursement impacts
Denials rates
Outcome of transition with Business Associates
Budget impact

42. Performance Monitoring
Monthly
Weekly
Daily
Monitor revenue and reimbursement metrics by payor monthly
Monitor case mix on a monthly basis
Perform reimbursement service line reviews monthly
Monitor physician discharge performance
Monitor physician documentation weekly
Monitor case mix weekly
Monitor coder & biller efficiency weekly
Monitor financial metrics (DNFB, A/R, Clean Claims Rate, Final Billed Not Submitted, Denials rates) daily
Set up dashboards with drill-down capability to service line and payor

43. Be prepared for… Worst Case Scenario System Issues Non-System Errors
Create worst-case scenarios for Revenue Cycle impacts using forecasting to determine cash reserves to support revenue impacts for at least 12 months
Be prepared to have dialogue with payors regarding concerns over claims adjudication, denials rates, documentation requests and billing inquiries and claims rejections
System Issues
No matter how thorough testing, be prepared for some health plans, external vendors or internal systems to be unable to accept ICD-10 codes
Be prepared to have someone in the organization “troubleshoot” problems to determine whether it is system, interface, coding, documentation or other external issue
Non-System Errors
For the first 6 to 12 months, expect significant amount of human error related to coding, documentation, claims submission, adjudication and denials management
It is likely that there will be increased queries from coders for documentation and increased billing inquiries from health plans
Be prepared to assess aptitudes and swiftly retrain as needed

44. Driving Success Through Education
ICD-10 User Categories
Basic Users
Clinical Users
Documenters
Super Users
ICD Code Utilization
Aware of codes and use them in some application; only require general understanding
More detailed understanding of codes and how they drive reimbursement
Document to support codes and may be involved in their selection
Involved in coding or auditing services, or the education and training of such items
Example Departments/ Roles
Patient Access, Scheduling, Registration, PFS, IS, Senior Mgmt.
Data Analysts, Research, IS (Clinical & Revenue Cycle), Quality, Mgmt.
MDs, Therapists, CRNAs
Coders, CDI, Registrars, Auditors, PFS
Level of Training Required
Minimal
High-level
Detailed & targeted
Detailed coding & billing training
Planning for Education
Outline expected training and education requirements for each user category and job code
Include training content, various teaching methodologies, and estimated timeframes for education roll-out
Develop and roll out detailed training plan

45. Education Timeline

46. Questions & Discussion

47. Resources

48. AHIMA ICD-10-CM/PCS Resources
ICD-10-CM/PCS Transition: Planning and Preparation Checklist at
A Top 10 List: Phase I – ICD-10-CM/PCS Implementation at
Audio Seminars & Online Courses
Communities of Practice
Conferences & Events
ICD-10 Page
Web Store

49. Other Resources
Making the Health System Work Better for Everyone: The ICD-10 Collaboration Imperative; OptumInsight
ICD-10 collaboratives best practices -- Published on ICD10 Watch (
Provider-Payer Collaboration: Strategies to test ICD-10 Provider and payer perspectives (AHIMA)

50. About us

51. About The Health Care Group
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52. Full Scope of revenue cycle management services
A track record of helping improve overall revenue cycle performance
Access Care Assessment and Process Improvement
Point of Service Collections
Revenue Cycle Assessment and Transformation
Charge Master/Charge Capture
Revenue Integrity
Cash Acceleration (Insourcing)
Collection Agency and External Vendor Analysis
Denial Management and Mitigation
Revenue Cycle
Process Improvement
Charge Master/
Capture
Denial Management
Cash Acceleration
Application of Technology