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ICD-10 Discussion Document July 19, 2013

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1 ICD-10 Discussion Document July 19, 2013
Insight Driven Health ICD-10 Discussion Document July 19, 2013

2 ICD-10 Overview - The Imperative and Our Understanding
The ICD-10 Mandate: ICD-10 is a reality. The CMS deadline for compliance is October, 2014. ICD-10 transition is a reality and requires “all covered entities” as defined by the Health Insurance Portability and Accountability Act of 1996 to accept and transmit ICD-10 diagnosis and procedure codes. The Payer market has embraced the ICD-10 mandate and is aggressively implementing remediation strategies to update their IT systems and business processes to support the mandate. Providers may see a significant impact on their net revenues and/or cash collections if ICD-10 is not implemented effectively. ICD-10 is not just another IT Project – planning and implementation for ICD-10 Remediation is an Enterprise effort, and requires leadership and effort from Clinical Delivery, Business Operations and IT, at a minimum. Hospitals Need a Solution and Resources to Accelerate their ICD-10 Remediation: Achieving “Meaningful Use” is consuming Hospital IT resources – production support costs are over budget with IT spend increasing basis points as a percentage of operating expenses. Planning and Preparation: involving team members from across the Enterprise. Train and Educate all impacted personnel on the new coding and documentation requirements. Evaluate Applications & HIS Suppliers to define Upgrade/Remediation plans & resources. Design, Test, Train and Activate all impacted systems…and Deploy by October, 2014. Speaker - Gala 2

3 ICD-10 Overview - History of ICD-9 to ICD-10
For the last 30 years, the United States has used ICD-9 CMS-0013-F mandates the implementation date of ICD-10 on October 1, 2014 ICD-9 codes will not be accepted for services provided on or after October 1, 2014 Prior to October 1, 2014, it is necessary to submit claims using ICD-9 codes ICD-10 consists of two components ICD-10-CM Diagnosis classification system ICD-10-PCS Procedure classification system for inpatient hospital use Prior to ICD-10 adoption, providers must be compliant in 5010 transactions Due to the limitations of ICD-9; the need to move to ICD-10 ICD-9 codes existing today are approximately 24,000 ICD-10 codes will include approximately 140,000 codes

4 ICD-10 Overview – Increased Specificity looks like this…
ICD-10-CM Many possible codes ICD-9-CM Fracture of femur, shaft, closed S72301A Unspecified fracture of shaft of right femur, initial encounter for closed fracture S72322A Displaced transverse fracture of shaft of left femur, initial encounter for closed fracture S72326A Nondisplaced transverse fracture of shaft of unspecified femur, initial encounter for closed fracture S72301G Unspecified fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72322G Displaced transverse fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72326G Nondisplaced transverse fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing S72302A Unspecified fracture of shaft of left femur, initial encounter for closed fracture S72323A Displaced transverse fracture of shaft of unspecified femur, initial encounter for closed fracture S72331A Displaced oblique fracture of shaft of right femur, initial encounter for closed fracture S72302G Unspecified fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72323G Displaced transverse fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing S72331G Displaced oblique fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72309A Unspecified fracture of shaft of unspecified femur, initial encounter for closed fracture S72324A Nondisplaced transverse fracture of shaft of right femur, initial encounter for closed fracture S72332A Displaced oblique fracture of shaft of left femur, initial encounter for closed fracture S72309G Unspecified fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing S72324G Nondisplaced transverse fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72332G Displaced oblique fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72321A Displaced transverse fracture of shaft of right femur, initial encounter for closed fracture S72325A Nondisplaced transverse fracture of shaft of left femur, initial encounter for closed fracture S72333A Displaced oblique fracture of shaft of unspecified femur, initial encounter for closed fracture S72321G Displaced transverse fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72325G Nondisplaced transverse fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72333G Displaced oblique fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing

5 ICD-10 Overview - ICD-10 Implementation Myths
Health Information Management (HIM) will handle all implementation needs Myth: Short time to implement . We can wait till 2013. Myth: Our system vendors will handle the implementation. Myth: Reimbursement will not be impacted. Reality Reality Reality Reality All individuals involved in revenue cycle and clinical areas will be impacted Physician and staff training needs will be large and complex in some instances Systems/processes outside of HIM control such as Case Management, Utilization Review, Contracting, Quality reporting are all impacted System reconfiguration and testing for claim submission and overall report generation is immense Clinical/Financial systems implemented prior to 2013 should be ICD-10 ready Vendors will only address technical aspects of their application Workflow integration with other applications will fall to the system users Expect increased complexity of medical necessity claim edits Medical severity DRG’s may increase in number due to improved clinical information being reported Coders, Physicians, and Payors will be adjusting simultaneously to a new coding methodology. Expect initial delays/, requests for further information Clients need an implementation partner not just implementation assistance. Using outside experienced help can bring new ideas and alternative perspectives. Client resources typically have IT or clinical knowledge. Accenture can provide resources that have both. Clients need help with physician adoption. “Body shops” will not give them this. Just because you have an army doesn’t mean you will win the war. To win you need experienced generals and leaders. Epic’s Flight Plan gets you airborne, but no “Sully”… what is missing is air traffic control, FAA, NTSB, and experienced pilots. Epic implements in a way that is is silo’d by application. Having an application architect to help with integration is critical. Every client exceeds capacity. Scope increases. More reports than originally thought, more difficult interfaces, more order sets, etc.

6 ICD-10 Implementation Lifecycle Status
ICD-10 Overview - How Prepared are Providers for ICD-10? Accenture interviewed several large academic provider clients to determine their ICD-10 preparation. The majority of the providers are currently in the remediation stage. Planning Remediation Testing ICD-10 Implementation Lifecycle Status Most of the large academic providers have begun or completed the following activities: Adoption of a “dual coding” period in facilities prior to go-live during which HIM staff will code records both in ICD-9 and ICD-10. Training is scheduled to support use of ICD-10 codes to enable retention through use. Plans to add HIM coding staff, either through staff augmentation or hiring to address potential backlogs. Translation of most commonly used diagnosis codes by specialty associations for use in physician practices. Adoption of Computer Assisted Coding (CAC) and Clinical Documentation Improvement (CDI) programs. The biggest challenge to progress is related to competing health reform priorities. Those in remediation were preparing plans for testing with vendors and payors in late 2013 and early 2014. Only one Provider is ready to test in 1Q13. Speaker - Gala Readiness Acitivites Underway: The following activities have been observed across the provider industry. Adoption of a “dual coding” period in facilities prior to go-live during which HIM staff will code records both in ICD-9 and ICD-10. Training is scheduled to support use of ICD-10 codes (i.e., facilities and dual coding before physician practices) to enable retention through use. Plans to add HIM coding staff, either through staff augmentation or hiring to address potential backlogs. Translation of most commonly used diagnosis codes by specialty associations for use in physician practices. Adoption of Computer Assisted Coding (CAC) and Clinical Documentation Improvement (CDI) programs.

7 ICD-10 Overview - How Prepared are Medium-to-Small Providers for ICD-10*?
According to a recent HRAA survey of 120 hospital leaders, a portion of medium to Small providers are not sufficiently preparing for a smooth Transition to ICD-10 One-in-Five have not begun education or training practitioners for the shift to ICD-10 code-set 45% have not begun ICD-10 CM training for their coding staff 55% have not begun ICD-10 PCS training for their coding staff About half of these hospitals are not in-tune with the official CMS ICD-10 Transition timelines More importantly, 31% do not plan on dual coding prior to October 1, 2014 And 72% have no intention of submitting any ICD-10 claims to their payors for testing *Sources: Speaker - Gala 7

8 ICD-10 Overview - Critical Success Factors for Achieving ICD-10 Include
Physician Readiness 1 Complete and accurate physician documentation to support ICD-9 and ICD-10 codified data. Adoption of Clinical Documentation Improvement program to help with physician engagement. Achieve Revenue Neutrality through Operational Preparation 2 As coordination is KEY - Strong ICD-10 Program Management needs to be in place to drive the implementation across the various work streams Adoption of “Dual Coding” period. Knowledge transfer/education provided to key leadership/teams staged according to fully integrated program plan development and execution. Detailed contracts with other providers, payers and vendors with clear identification of timing, integration and conversion/translation applications. Speaker: Gala IT System(s) Readiness 3 Fully integrated IT and other systems currently containing ICD-9 codes across all hospital, vendor, payer and other integrated systems (electronic and other). Comprehensive modeling and integrated functional testing plan across the continuum of care.

9 ICD-10 Overview - Anticipated Impact Areas
Network Management

10 ICD-10 Overview - Universal Benefits of ICD-10*
ICD-10 incorporates much greater specificity and clinical information to improve capture of healthcare information, which has the following benefits: 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 Alignment of the US with coding systems worldwide Improved ability to track and respond to international public health threats (e.g. SARS, H1N1) Enhanced ability to meet HIPAA electronic transaction/code set requirements Increased value in the US investment in SNOMED-CT Space to accommodate future expansion *Source: AHIMA Website –

11 ICD-10 Overview - Impacts of Not Implementing ICD-10
Failing to meet the October 1, 2014 mandate to transition to the ICD-10 medical code set could have serious fiscal and reporting consequences. CMS will no longer accept the ICD-9 code set for services provided on or after October 1, Failure to fully transition to the ICD-10 code set will result in loss of CMS revenue. Non-compliance with Outpatient Code Edits, including Medical Necessity Edits Inaccurate / incomplete clinical metrics and pay-for-performance reporting that does not meet peer standards Loss of contracts / elongated contract negotiations for renewals Erroneous quality reporting to regulatory and third party agencies Inaccurate / Incomplete cost management reporting Potential adverse impact on clinical workflows / patient care referrals generated from clinical data

12 ICD-10 Overview – Expected Budget Risks Needing Mitigation for ICD-10
Insufficient Cash-On-Hand Unexpected depletion in cash reserves Decrease in Coder Productivity Underestimation of Scope Personnel and/or Skills Shortages Interruption of Operations Contractual Challenges Unexpected Challenges with Technology or Systems Inadequate Contingency Planning Inability of strategic partners to achieve concurrent compliance Insufficient Cash-On-Hand – According to HFMA, some institutions, depending on their ICD-10 preparation, should consider having 6 – 12 months of cash on hand. They advise that some providers should consider securing lines of credit during the transition period. Unexpected Depletion in Cash Reserves – The Advisory Board estimates productivity for coders will decrease by 20% and 10%-20% for Physicians due to significant increase in queries. Over a three-year period, the financial impact of ICD-10 implementation on a typical 250-bed hospital could range from $2.5 million to $7.1 million in lost net revenue, according to the analysis.  Decrease in Coder Productivity – As I previously mentioned, without proper mitigation through Coder Education, Retention Efforts and utilization of CAC Software, institutions should expect to see at least a decrease of coder productivity of 20% and could easily be as high as 50% Underestimation of Scope – Hospitals are advised to periodically relook at their remediation plans as new challenges to remediation will be discovered Personnel and/or Skills Shortages – Industry experts are sounding the alarm bells as they expect older coders to just retire instead of transitioning to ICD-10. Efforts around identifying new pools of coders should be evaluated and as previously mentioned, coder retention plans should be in place Interruption of Operations – Providers could easily experience delays in providing service during registration and preauthorization. These are heavily impacted areas that need mitigation strategies Contractual Challenges – Extensive amount of communication and testing with each Payor will be needed to ensure a firm understanding of financial impact of ICD-10 Unexpected Challenges with Technology or Systems – Each provider will need to fully understand each IT system to ensure they will be ICD-10 compliant and have gone through extensive testing. Inadequate contingency planning – Providers should constantly be re-evaluating their contingency planning around their cash flows. Inability of strategic partners to achieve concurrent compliance – if 5010 was any indication, a needed extension was needed to providers and payors/clearinghouses could successfully submit information. Extensive testing with Payors and Clearinghouses will be required.

13 ICD-10 Overview - Questions
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