Presentation on theme: "Optimizing Reimbursement with HIPAA 5010 and ICD-10"— Presentation transcript:
1 Optimizing Reimbursement with HIPAA 5010 and ICD-10 IDAHO HFMALinda Corley, BS, MBA, CPCSenior Leader – Compliance and Associate Development
2 HIPAA 5010 AgendaHIPAA Electronic Administrative Transaction Standards OverviewRegulation requirements for the transactionsWhy change? – benefits of the new standardsNot just a “software” change!All revenue cycle departments – electronic transactions affected!Getting StartedScope of change and HIPAA 5010 enhancementsWhy and how reimbursement “can” improve under HIPAA 5010Implementation considerationsPlanning Your Next StepsHIPAA 5010ICD-10Utilizing HIPAA 5010 for organizational change
3 HIPAA 5010 – Electronic Administrative Transaction Standards Overview January 15, 2009, the U.S. Department of Health and Human Services (HHS) released two final rules supporting the continued transformation of the U.S. healthcare system toward a comprehensive electronic data exchange environment.HIPAA 5010ICD-10Represent the transaction code set components of the Health Insurance Portability and Accountability Act (HIPAA) of 1996.HIPAA 5010 – Mandatory compliance on January 1, 2012 – all covered entitiesInternal Medicare testing began January 1, 2010External testing began January 1, 2011No entity may require another entity to use the new version of the standard without agreement between the two parties for testing and implementation.
4 HIPAA 5010 Final Rule Overview Current 4010 standard is widely recognized as outdated and lacking in the functionality currently needed by the health care industry.Electronic Data Interchange (EDI) specialists from both government and industry worked together to achieveCorrection of 4010 problems with “compatibility” of data across trading partnersAddress low compliance rates by enhancing administrative data exchangesReduction in the number of necessary communications between trading partners attempting to resolve issues related to HIPAA dataAll HIPAA Covered EntitiesProviders Health PlansClearinghouses Billing / Service AgentsBusiness Associates of Covered Entities that use the affected transactions
5 HIPAA 5010 Final Rule Overview BCBS of Chicago estimates over 850 individual data “element” changesFront matter (educational and informational) reformatted for consistency across all guidesContent clarified and improved to correct 4010A1 ambiguities in utilizationCosmetic – presentation format changes for clarity of dataTechnical and Structural – Consistent data representation across all transactionsA patient is defined the same in the claim, eligibility request, referral, etc.Reporting rules are the same throughout the suite which improves “guides”The most positively reviewed change is that “discrete” data is defined / required instead of multi-functional data segmentsBusiness Usage – Added new, modified existing, and removed business functions to improve efficiency and promote understanding
7 HIPAA 5010 Adoption RulesVersion 5010 of the X12 standards suite of administrative transactionsEDI X12 = data format based on ASC (the Accredited Standards Committee) X12 standards for the exchange of specific data (text) between two or more trading partners (i.e. organization, entity, or group of organizations)New version of EDI X12 = New version numbers like 4010, 4020, 4030These are “minor” standards changes5010 = New version “initial” number which is a “major” revision release“Standards” cover a number of requirements for reporting structure of data to be transmitted electronicallySeparators, control numbers, specific segments, delimitersBig trading partners may include requirements NOT mandatory in 5010!Version D.0 of the NCPDP suite for retail pharmacyVersion 3.0 of the NCPDP suite for Medicaid pharmacy subrogationVersion D.0 or Version 5010 for retail pharmacy supplies and services, based on trading partner agreements
8 Key Changes in Transmission Standards What must be changed?The formats currently used must be upgraded from X12 Version 4010A1 to 5010 and from NCPDP 5.1 to D.0Systems that submit claims, receive remittances, exchange claim status or eligibility inquiry and responses must be analyzed to identify software and business process changesThe new versions have different data element requirementsMedicare has performed a comparison of the current and new formats for the transactions used and they can be found at
9 Key Changes in Transmission Standards Software must be modified to produce and exchange the new formatsBusiness processes may need to be changed to capture additional data elements now required or to report data elements in varying submissionsTransition to the new formats must be coordinated:Continue to use the current formats for some Trading Partners’ (payors) exchangesStart to use the new formats with other Trading PartnersIdentify vendor time table(s) for testingHow will testing be conducted?Separate test connectionBased on test indicator in transactionSelf-test site
11 Review, Evaluation and Education Step One – Review, evaluation and education to appropriate staff membersASC X12 is not just for IS, IT, or “techies”!Benefits will be a change in business processes to facilitate (optimize) payment – if HIPAA 5010 is implemented in an appropriate manner . . .Review revenue cycle uses of patient / payor informationPatient access / registration PASService authorization Case ManagementBilling and collections PFSAssess clinical data reporting needs for “automated” transactions and processesIncorporate new electronic regulatory processes that may have required manual intervention under HIPAA 4010
12 Review, Evaluation and Education Identify deficiencies in the current HIPAA 4010 revenue cycle processes that can be improved under HIPAA 5010 for facility-specific trading partners (payors)New formats address healthcare industry needs and clarify intentImproved instructions – alias names removedAmbiguity eliminated from language and rules for establishing situational data. Can now clearly understand when a situation exists that requires data to be used or populated in a transactionAttention given to privacy issues around “minimum necessary”Worked to eliminate unnecessary or redundant data qualifiers or codes to ensure more consistent use of informationAim for standardization of all payor requirements!Pay particular attention to distinct payor requirements that had to be manually processed under 4010 that may be electronic under 5010
13 Review, Evaluation and Education Step Two – Understand “which” changes affect your payorsHIPAA 5010 utilizes the same subpart NPI in billing provider for same claim to all payorsNeed to include / involve provider enrollment staff at the beginning of implementationReview current NPI subpart enumeration to find cases where a specific NPI may only be used with one payorEither work with payor to find a way to STOP using this NPI – or inform other payors of this specific NPI and its associated addressPhysical address must be utilized (sent) for billing providerA post office box address cannot be utilized for the billing provider.PO box addresses should be utilized for the “pay-to” address, if necessaryThe NPI for service location should be utilized only when it is external to the billing organizationOnly one (1) NDC number per service line for Medicaid billing (rebate)
14 Review, Evaluation and Education Investigate use of additional electronic transactions that you may not already have implemented such as:Claim statusAuthorizationsReferralsUse of new claim fields that can reduce the utilization of attachments such as:Situational service line description data element (SV101-7) for non-specific procedure codes.Most importantly – Review and correct any previous workarounds implemented “just to get the job done” with HIPAA 4010Ensure prior customizations are applicable to the new standards and/or necessary for HIPAA 5010
16 Optimizing Reimbursement Enhancements Included with HIPAA 5010Enhancements are focused on functional areas requiring 5010 changes and are limited to:Improving claims receipt, control, and balancing proceduresIncreasing consistency of claims editing and error handlingProvides common edit definitions to be used by all systems and jurisdictionsReturning claims needing correction earlier in the processAdds edits for common mistakes to the front-end MAC systems, rather than waiting to do these edits in the adjudication systemsAssigning claim numbers closer to the time of receiptThe front end systems will assign the base claim number (in the format expected by the adjudication system), and have the adjudication system add any suffix necessary for split or adjustment claims
17 Optimizing Reimbursement – PAS Specifically for Patient Access:Identify deficiencies in the current HIPAA 4010 registration process that can be improved under HIPAA 5010 for facility-specific trading partners (payors)Evaluate your ability to reduce administrative cost by fully adopting the 270 Eligibility Inquiry and 271 Eligibility ResponseUnderstand how the new 271 standard transaction will respond to Eligibility inquiries with expanded subscriber and coverage informationWork with your trading partners to reduce reliance on individual companion guides for required demographic dataDetermine who needs to be trained and what content the training should include for Patient Access staff members
18 Optimizing Reimbursement – PAS Specifically for Patient Access:Identify deficiencies in the current HIPAA 4010 patient registration process that can be improved under HIPAA 5010 for facility-specific trading partnersFocus on top five payors to ensure a majority of patient demographic data can be captured accurately and timelyStudy payor companion guides to ensure specific requirements can be metRegistration systems must be able to collect the necessary data upfrontReview system sub-parts to correlate trading partner requirements for claims processingIdentify data elements required for a “clean” claim to processPatient Access work-flow should be adjusted to ensure value from the information gainedPre-admissions, insurance verification, scheduling, registration!
19 Optimizing Reimbursement – PAS Work to identify areas that can be improved utilizing HIPAA 5010 –Goal should be to go beyond just an upgrade to current electronic transactions and associated processes!Decide what works well now vs. how you want Patient Access to perform!Investigate –More use of EDI Form 270 / 271 Eligibility Inquiry and Response because of new expanded search options and response dataImprovements in data accuracy and timeliness“Real-time” responseDo your best to convert older EDI registration and patient scheduling processes to take advantage of new 5010 software featuresEstablish improved financial counseling ability due to increased clarification of patient responsibility
20 Optimized Reimbursement – PAS One example of Version 5010 benefits is decreased staff time required for activities such as manual look up of patient coverage information and phone calls to insurance companies to verify eligibilityStandardized 270 / 271 provides overall improvement in the ability to request information and the value of the information returned“Real time” requests and responses directly from payor’s systemProvides more detailed patient information andMore information that will be required by the payor on the claimImproves and clarifies definition of “patient” that currently present registration difficultyMore detailed “subscriber / patient” hierarchy changesWhen a patient has a unique member ID (such as a HMO assigned ID number), they are considered a subscriber so specific patient responsibility information can be returned (i.e., dependents)Expect increased use of the transaction standard by payors and providers once covered entities migrate to 5010
21 Optimizing Reimbursement – PAS Eligibility Inquiry / Response 270 / BenefitsPayor must allow and respond to alternate search options to reduce “member” not found responsesAdded support for 45 additional Patient Service types on the 270 Eligibility RequestNine (9) categories of benefit information must be reported on the 271 Eligibility ResponsePayor reporting will include co-insurance, co-payment and deductible, must also include patient responsibilitySupports transition to ICD-10 reportingMedical necessity (diagnosis) information addedClarifies NPI InstructionsAlways report NPI at the lowest level of specificityAllows for “Present on Admission” indicator for 837I (institutional claims)Significant changes will remove implementation obstacles
22 Optimizing Reimbursement – PAS Registration Process ImprovementThe matching of the patient’s date of birth (DOB) during the eligibility checking process will allow providers to store the matching information upfront in the process.Currently, lack of this information leads to phone calls, denied claims and appeals.Because this information may now be available in the initial communication with the payor, additional search options including member identification can be leveraged.The improved ability to match a patient to a payor should reduce the number of claims denied because of syntax problems with the name.
23 Optimizing Reimbursement – PAS Patient Access Re-engineeringVersion 5010, particularly when combined with CORE, offers the provider the opportunity to re-engineer significant components of the revenue cycle.Transactions that once seemed too challenging to implement should be reconsidered—especially due to their potential return on investment.This particularly is the case with the real-time 270 / 271 eligibility transactionCORE – Administrative efficiency is the primary goal of the CORE initiative, and in a sense, CORE picks up where 5010 leaves off.(Committee on Operating Rules and Efficiency,Through voluntary rules for payors, clearinghouses and providers around the exchange of eligibility information, CORE vastly improves the usefulness of the 270 / 271 eligibility transaction between payor and provider.Integrating this real-time transaction with providers practice management / hospital information system has proved to be a significant cost saver for providers.
24 Optimizing Reimbursement – PAS Determine who needs to be trained and what content the training should include for Patient Access staff membersIdentify a 270 / 271 "super user" (i.e., subject matter expert) to champion recommended new processes and/or data entry requirementsIdentify staff to be trained on system changes after work-flows are established and procedures are setWork with IS to identify appropriate data capture process changes and with Training to develop materials that define procedures in writing to promote improvementsComplete the PAS staff trainingIncorporate training into new employee orientation.
25 Optimizing Reimbursement – PFS Specifically for Patient Financial Services:Identify a proactive path for strategic implementation of HIPAA 5010 within Patient Financial Services (PFS)Identify deficiencies in the current HIPAA 4010 billing and collections process that can be improved under HIPAA 5010 for facility-specific trading partners (payors)Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats:276 / Claim Status Inquiry and ResponseMedical Claims for Institutional (Form 837-I), Professional (Form 837-P), and Dental (Form 837-D) ServicesMedical 835 – Remittance AdviceUnderstand how the new standard transactions listed above can be utilized to streamline work flow through automation instead of current manual processes
26 Optimizing Reimbursement – PFS Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats:276 / Claim Status Inquiry and ResponseSubscriber and dependent data made more consistentSubscriber info needed only when patient cannot be uniquely identifiedAdded Pharmacy related data segments and the use of NCPDP Rejection CodesImproved inquiry tracking mechanisms and identifiers reported for transaction entitiesAdded Patient Control numberIncreased Claim Status segment repeat to >1 for more detailed status informationAllows payors to report more status codes and greater detail regarding the claim statusAdded more examples to clarify instructions
27 Optimizing Reimbursement – PFS Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats:Medical Claims for Institutional (Form 837-I), Professional (Form 837-P), and Dental (Form 837-D) ServicesPayor-specific provider ID’s which associate the provider with specific payors.Helps to improve claim adjudication efficiency.Billing provider – clearly articulates the billing provider definition, and reduces the errors in payor-to-payor coordination of benefitsStandardizes the creation of an 837 COB claim when the primary payor’s remittance information returned to the payor is not in 835 format (i.e., provides crosswalk for paper remit)Allows balancing a COB claim based on primary payor’s informationRules defined for calculating the primary payor’s allowed and approved amount. This results in the elimination of several amount segmentsWill improve the claims auto adjudication rate.
28 Optimizing Reimbursement – PFS Medical Claims for Institutional (Form 837-I), Professional (Form 837-P), and Dental (Form 837-D) ServicesStandardizes the provider “type” definition for inpatient and outpatient visits based on the NUBC standardsProvides for “pay-to” provider name and address which helps in electronic processing of Medicaid subrogation of payorsWill enable payor to clearly identify provider type on the 837 claim and thus perform better contract management in the benefit adjudication process and systems.Provides for present-on-admission indicator related to each diagnosis codeRemoved all data requirements which industry leaders expressed were obsolete. Example: date of similar illness.Requires anesthesia services to be reported in minutes instead of unitsProvides for increased number of diagnosis codes on claim (12)
29 Optimizing Reimbursement – Case Mgt. 278 - Referral Certification and Authorization (also referred to as “Health Services Review Request and Reply”)Adds segments for reporting key patient conditions that were missing under HIPAA 4010Adds / expands support for various business needsExpands usage for authorizations beyond “yes” and/or “no” responseInvolve Patient Care Management in investigation of how 278 can be utilized to reduce telephone calls, FAXing, and denials!
30 Optimizing Reimbursement – PFS Evaluate your ability to reduce administrative and processing costs by fully adopting the following HIPAA 5010 standardized formats:Medical 835 – Remittance AdviceIn addition to previously mentioned, payment improvements:New healthcare medical policy segment added to the 835:Reduces inquiries to payorsAssists providers in locating published and encoded medical policies used in benefit determinationCoordination of benefits – clarification of when to use primary, secondary and tertiary claim status indicatorsMedicaid subrogationNew data elements will provide ability for payors to allow direct billing by a Medicaid agency to other health plansFor the payor: May result in reduced administrative cost by introducing COB for Medicaid programs. Claim processing of Medicaid supporting products would become easy.For the provider: Faster claim payment on Medicaid claims.
31 Optimizing Reimbursement – PFS Understand how the new standard transactions listed above can be utilized to streamline work flow through automation instead of current manual processesStrategic planning of the upgrade to HIPAA 5010 is a challenge!May want to consider the “Four A’s for Reaching 5010 Compliance:”Appreciate – the new standardized formats offer many PFS benefits!Analyze – Must investigate and understand YOUR systems and processesAdopt – You choose your organizational level of adoption:Interface – Complies with mandate but fails to captureall significant business valueFunction Centric – Adds the advantages of providing strategic business solutions to the core application systemTotal Adoption – All encompassing, revamping both core system and interfaces to a granular utilization! Re-engineering!Apply – Dependent upon your adoption methodology
32 Optimizing Reimbursement – PFS Work with your trading partners (payors) to reduce reliance on individual companion guides for required claims processing requirementsMore discrete provision of data than variability of 4010.Know YOUR system capabilities – speak authoritatively with payors regarding what they request for claims submission and what you supply!Goal is consistency of required data elements for ALL payors.Remember – in addition to system changes, most efficiencies and cost savings will be through business process improvement!
33 Optimizing Reimbursement – PFS Determine who needs to be trained and what content the training should include for Patient Financial Services (PFS) staff membersAfter you have determined changing data element requirements for the 837 claim, ensure both billing and collection staff members understand the added, deleted and/or changed form locators.Identify a 276 / 277, 837 and 835 "super user" (i.e., subject matter expert) to champion recommended new processes and/or data entry requirementsIdentify staff to be trained on system changes after work-flows are established and revised procedures are setWork with IS to identify appropriate data capture process changes and with Training to develop materials that define procedures in writing to promote improvementsComplete the PFS staff trainingIncorporate training into new employee orientation.
34 Optimizing Reimbursement – PFS Version 5010 is here and must be implemented as the first step on the road to ICD-10 implementation.It is a critical component to true standardization and interoperability.Many of the flaws of the current 4010 version will be a thing of the past with the implementation of Version 5010.The promise of administrative simplification and subsequent savings with HIPAA can be achieved if providers, vendor, payors and clearinghouses all work to take advantage of this standard and integrate it into systems and workflow rather than simply comply.As a provider, it is critical that Version 5010 be part of the strategic information systems and technology plan.Leaders should seize the opportunity to guide their organization through a successful implementation of the standardized formats for 2012 and beyond.The most successful provider organizations will be those that effectively orchestrate and leverage this combination of changes into a strategic healthcare information exchange plan.
36 Optimizing Reimbursement The HIPAA 5010 project is a pre-requisite for the ICD-10 projectWhat 5010 DOES:Increases the field size for ICD codes from 5 bytes to 7 bytesAdds a one-digit version indicator to the ICD code to indicate version 9 vs.10Increases the number of diagnosis codes allowed on a claimIncludes some of the other data modifications in the standards adopted by Medicare FFS
37 Optimizing Reimbursement The HIPAA 5010 project is a pre-requisite for the ICD-10 projectWhat 5010 DOES NOT do:Does not add processing needed to use ICD-10 codesDoes not add a crosswalk of ICD-9 to ICD-10 codesDoes not require the use of ICD-10 codesThe 5010 format allows ICD-9 and/or ICD-10 CM & PCS code set values in the transaction standard.The business rules for using ICD-10 code set values will be defined with the ICD-10 project.
38 Critical Success Factors for Implementation Ensure the following takes place:Knowledge transfer / education provided to key leadership teams – this is not simply an IT projectEnterprise-wide gap and impact analysis of 5010 “required” changesYour trading partners may require varying data element changes!Fully integrated hospital or facility IT and other systems – interfacesComprehensive internal and external communication plansDetailed contracts with other providers, payors and vendors with clear identification of timing, integration and conversion / translation applicationsComprehensive modeling and integrated functional testing plan across the continuum of care specific to each facility
40 Phase 1: Organize the Implementation Effort Become familiar throughout the organization with the requirement to upgrade to the 5010 transaction standardsIdentify project managerIdentify current version of EDI software being used to complete HIPAA transactionsIdentify and list current application systems used to complete and/or utilize data relative to HIPAA transactionsDetermine need for new hardware to support 5010 transactions (e.g., faster internet connection, more server storage, or greater memory)Identify key personnel to be involved in project planDevelop project meeting scheduleEstablish time tracking project codes
41 Phase 1: Organize the Implementation Effort Complete and submit initial ROM for projectDetermine and obtain agreement as to what IS documentation is required for this type of projectPlan for office communication on project; establish mailing lists for project team and user communityBegin preliminary budget (e.g., software upgrades, hardware upgrades, training)
42 Phase 2: Analyze ImpactIdentify data changes in 5010 transactions vs transactionsDiscuss with vendors and application owners about data reporting changes in the 5010 transactions that applyMost changes are technicalSome may require the reporting of data differentlyIdentify possible work flow changes needed to be made as a result of 5010 changesDetermine if additional resources are needed to assist with implementing the 5010 transactions (e.g., identify needs for data reporting, identify workflow changes, implement additional transactions)
43 Phase 3: Vendor Collaboration Ask vendors if they will be upgrading system's version of software for the 5010 transactionsAsk vendors if system and/or software will be able to generate both 4010 and 5010 transactions during the transition period with trading partnersIf system will not be able to generate and receive both 4010 and 5010 transactions, talk to vendors about the timing of upgrading to the 5010 transactionsAsk vendors if the system and/or software upgrades will also support ICD-10, which is mandatory October 1, 2013Ask vendors if there will be any charges for upgrading our system and/or software for the 5010 transactions
44 Phase 3: Vendor Collaboration If vendors will not be upgrading system at this time for ICD-10, ask if there will be charges for the upgrade when they complete it laterAsk vendors for an estimated timeframe of when they will install upgradesAsk vendors for an estimated timeframe of when they will have the upgrades completedConfirm with vendors what is required to get in their queue to have the upgrades installedContact system owners, identify changes required for 5010 implementationDetermine if additional resources are needed to assist with vendor activities (e.g., sequencing installations, identifying software and hardware needs)
45 Phase 4: Develop BudgetPrepare budget for implementation costs, including expenses for:Systems changesSoftware changesNew hardwareStaff trainingResource materialsConsulting servicesDecreased productivityOther considerations
46 Phase 5: System and Software Upgrades Installation of software upgrades by vendor (Remember, vendors will be coordinating implementations with all of their customers.)Update legacy systems as required to support 5010 transaction changesRemediation of 4010 maps to 5010 in EDI systems
47 Phase 6: Training Identify staff to be trained on system changes Identify a 5010 "super user" (i.e., subject matter expert) for Level 2 questionsWork with training department to identify 5010 changes that require staff trainingComplete the trainingIncorporate training into new employee orientation
48 Phase 7: Internal Testing Conduct internal testing with vendors to ensure 5010 transactions can be generated within the system (This will serve as a "dry run" within internal walls to ensure systems are capable of creating the transactions.)Obtain certification of 5010 compliance from vendors
49 Phase 8: Trading Partner Contact Survey Trading PartnersClearinghousesDirect connectAsk trading partners when they will be ready to send and receive test 5010 transactionsDetermine when trading partners will be ready to send and receive "live" 5010 transactionsConvert to the 5010 transactions prior to January 1, 2012 with trading partners that are willing to convert
50 Phase 9: External Testing Conduct external testing with trading partners to ensure the 5010 transactions are sent and received properlyReview results from trading partners on testingIf applicable, work with vendors and system owners to correct any problems with creating 5010 transactions or 5010 data content
51 Phase 10: 5010 Implementation No later than January 1, 2012Prior to the compliance deadline, notify senior management of a possible adverse impact to financials due to national implementation of a new set of HIPAA standards
52 Phase 11: Monitor Transactions Monitor submission and receipt of 5010 transactions to ensure they are working properlyMonitor communications from trading partners for possible errors with transactions
53 Optimizing Reimbursement Medicare started early – project work began in 2007An analysis was performed comparing the ASC X A1 and 5010 versions of:Claim (837-I, 837-P, 837-I COB, 837-P COB)Remittance (835)•Claim Status Inquiry/Response (276/277)•Eligibility Inquiry/Response (270/271)Analysis comparing the NCPDP 5.1 and D.0 formatsAnalysis comparing the UB04 and 837-I COB claimAnalysis comparing the CMS-1500 and the 837-P COB claimA side-by-side comparison of the 4010A1 and 5010 ASC X12 claim, remittance, claim status and eligibility inquiry/response versions as well as the NCPDP 5.1 to D.0 claim are available on the CMS web site:
54 Optimizing Reimbursement Getting Started --Purchase of Implementation Guides and access to Technical QuestionsX12:X12 portal:NCPDP (for D.0 and 3.0):X12 Responses to Technical CommentsOtherRequest Changes to standards:CMS Website for industry wide information:
55 References CMS National Provider Education Call HIPAA Version 5010
56 Break time!Available for questions or discussions . . .
57 Agenda – ICD-10HIPAA Electronic Administrative Transaction Standards OverviewHIPAA 5010 and ICD-10-CM = What does it mean for you?Careful definition of “your” data utilization / needs across the continuum of careConsideration of beneficial organizational transformational / tactical processesKnowledge of individual performance on evidence-based clinical care protocols that can be translated to “cost” of care and plan to drive improvementsReduction in current treatment costs – and ability to manage decline in future treatment costs for specific patient populationsImproved compliance with new or proposed payor requirements / contractsPlan for implementation of ICD-10 with necessary clinical outcomes capture, tracking and trending in mindQuality of care PLUS documentation of quality of care measures that are communicable to front and back-end care givers and insurersIncreased capability for capturing healthcare needs of the populations served by “your” facilityPlanning Your Next Steps
58 ObjectivesUnderstand the medical, demographic, and insurer data requirements for varying HIPAA 5010 and ICD-10 users along a broader continuum of care.Determine and plan for improved data capture to support the development of evidenced based clinical care protocols that may be utilized to reduce cost and quality variation.Incorporate transformational and tactical strategies during the implementation of HIPPA 5010 and ICD-10 that will assist with identification and achievement of improved clinical case outcomes that accurately define costs; and, therefore, allow for improved contracting abilities to optimize payment.Ensure the newly implemented or revised systems will better document, summarize and report data to understand the underlying health needs of the populations you serve, which will be extremely important in any capitated reimbursement method.Understand the importance of structured payment methodologies for appropriate reimbursement of physician and hospital joint programs for chronic disease management.
59 ICD-10 RequirementsAdoption of the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) for diagnosis coding for hospitals and the International Classification of Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding.Use of electronic transaction code sets in the physical transmission of healthcare data.Replacement of the current ICD-9 versions developed nearly 30 years ago with ICD-10-CM and ICD-10-PCS (ICD-10)Compliance date of October 1, 2013Utilizing ICD-9-CM for diagnosis and procedure coding since 1979 has adversely affected U.S. healthcare by:The inability of providers to effectively assign new codes describing rapidly changing medical treatments and technological improvements.The increasing difficulty of providers to assign specific diagnoses and procedures that accurately describe healthcare services.The resulting poor or no payment for services due to limitations of reimbursement models based on coding generalizations.
60 Timeline 2010 2011 2012 2013 Deadline for ICD-10 5010 Deadline Testing ICD-10TrainingChange ManagementInternal Service Management Transition5010 TestingICD-10 Implementation / TrainingICD-10 AuditsMapping Tools5010 ImplementationICD-10 Continuum of Care = Strategy / Approach to various needs / Planning
61 What is the Impact to Reimbursement? Here is what we know today:The ICD-10 version of MS-DRGs posted on the CMS Website replicates the ICD-9 version of the MS-DRGs (subject to change between now and 2013)The posted version of ICD-10 version MS-DRGs is unlikely to cause a significant redistribution of payment across hospitals.Once sufficient data code in ICD-10-CM/PCS becomes available, CMS will likely use the increased specificity of ICD-10-CM/PCS to enhance the MS-DRGs.If providers are losing money in current MS-DRGs with ICD-9-CM coding and the lack of higher specificity / documentation, you will continue to lose money under ICD-10-CM/PCS.Remember the RACs!payors are developing expertise, but remaining mute on proposed changespayor market is very active and ahead of provider market in preparing for ICD-10-CM/PCSThis is an opportunity for providers – but knowledge of ICD-10 will be needed to offset payor knowledge in contracting.
62 Using ICD-10 as a Competitive Opportunity The RAND Corporation estimated the cost of implementing ICD-10 at $425M to $1.1B in one time costs with potential benefits to the industry of $7.7B over ten years. *The Final Regulation (45CFR ) published January 16, 2009, identifies seven benefits that are anticipated to result from the transition to ICD-10:More accurate payments for new proceduresFewer rejected claimsFewer improper claimsBetter understanding of new proceduresImproved disease managementBetter understanding of health conditions and healthcare outcomesHarmonization of disease monitoring and reporting worldwide* Source: RAND Corporation, “The Costs and Benefits of Moving to the ICD-10 Code Sets.” March 2004
63 ICD-10 Readiness Assessment What—A high-level assessment to gather information about what operations, systems and processes need to be addressed and what resources need to be applied. Educational gaps, change management issues, IT readiness, planning needs, and critical success factors should be identified.Why—Enable organizations to begin critical planning and to gather and organize information in preparation for strategic decision making in correlation with ICD-10 implementationWhen—Begin now, in 2010, to assess key areas of focus to develop plans and budgets for proper alignment of data requirements for current and future states.Keep in mind the who, what where when and whyWho—The critical healthcare entity operational areas of this focused assessment include multi-disciplined clinical providers, information technology and management, and revenue cycle.Where—Performed throughout continuum of care within the reach of entity to identify gaps and propose solutions.
64 Scope—Key Functional Areas Addressed AssessmentExecutiveStrategic imperativesExecutive sponsorshipGovernanceClinicalGoal = improved data captureChange management issuesCorrelation of needs / resultsMulti-user focusResource issuesEducational gapsRevenue CycleIdentify operational areasUnderstanding of change readinessProcess improvementResource / staffing needsTraining and/or retrainingInformation TechnologyImpacted systems readiness
65 Organization-wide Impact Medium Impact to processand trainingLarge impact to processIT ApplicationsClinicalBusiness Process/ Patient AccessPayment PostingSchedulingPatient Access ServicesCharge/Coding IntegrityPatient Financial ServicesPre-RegistrationFinancialCounselingCharge CaptureEntryCodingAssignmentAccountResolutionClaims ProcessingTest Order“Optional”Doc.InterventionPatient AccountingPerformanceMeasurementPricingHIS(includingCPOE)HIMClaimsClearinghousePatientAccountingCaseManagementUtilizationThe revenue cycle crosses three major departmental areas – Business Office/Patient Accounting, Clinical areas, and IT. The impact ICD-10 will have in all three areas is significant.During registration and scheduling new codes will need to be used for “preliminary diagnoses”. Clinical details will need to be documented to support the specificity of the new code.Coders must be educated and trained on the use of ICD-10. Charges must be mapped to the new codes.Clinicians must be educated and trained on the documentation requirements that will lead to accurate coding. Clinical documentation workflows may need to be redesigned to support quality clinical care.IT applications must be modified to accommodate the new codes and the documentation that must support the new codes. Rigorous testing must occur to ensure that bills drop accurately.
66 HIPAA 5010 and ICD-10 Implementations Present an Opportunity to: Ensure End Result Value to Stakeholders!Patient Care – specificity in diagnoses and procedures, and allows for diagnosis-based decision supportOperations – improvements in uniform data sets promotes advantages in business intelligence and clinical performanceHIM / IT – granularity allows for greater standardization between clinical and administrative applications and quality reporting capabilitiesPatient Security / Interoperability – HIPAA 5010 and NCPDP implemented for fully leveraged ICD-10Financial – Transparency in billing and collection methodologies, decreased diagnosis related denials, improved accuracy and specificity in both governmental and non-governmental payor contractsWhile acknowledging the regulatory change mandated with ICD-10 implementation, providers are asking, “How do I assess ICD-10’s impact and reduce implementation risk to the organization, while optimizing the long-term benefits from ICD-10 implementation?”
67 Why does the change to HIPAA 5010 and ICD-10 afford opportunities for healthcare entities? Our current focus is primarily on implementing electronic health records and defining their central role in healthcare reform – for “our” particular facility.However, the larger consideration should be about delivering an updated, multi-faceted chain of documents throughout the “continuum of care” --from the professional and/or facility clinical setting to the patient’s home and to varied additional facilities, clinicians and care givers with the ability to access and/or to document patient progresswhich supports the patient through regular monitoring and feedback to all medical, administrative and payor parties who are involved with care.Healthcare reform requires:Adopting different patient care methodologies to encourage people to live healthier lifestyles, to encourage patients to be proactive with their healthcare, and to take action to monitor and manage chronic conditions rather than letting these conditions take over their lives.The ability to manage patients who are healthy as opposed to waiting until they are sick or have an exacerbation of a chronic illness will improve long-term outcomes and reduce cost of care.
68 HIPAA 5010 and ICD-10 Implementations Present an Opportunity to: Recovery Audit Contractor (RAC) Demonstration High-Risk Medical Necessity Vulnerabilities for Inpatient Hospitals issued September 23, 2010The inpatient hospital vulnerabilities listed were denied because the services were not medically necessary for the setting billed.In many instances, the service / procedure was medically necessary but the services could have been performed in a less-intensive setting.Often, these denials occurred because the submitted medical documentation did not contain sufficient, accurate information to:1) support the diagnosis,2) justify the treatment/procedures,3) document the course of care,4) identify treatment/diagnostic test results, and5) promote continuity of care among health care providers.
69 ICD-10 Continuum of Care Within the health care community Patient Provider (primary care, specialty provider, therapist, psychologist, psychiatrist)Acute Care HospitalInpatient careOutpatient diagnostic testingOutpatient therapeutic servicesEmergent or Urgent evaluations / treatmentInpatient Rehab HospitalHome Health AgencySkilled Nursing FacilityLong Term Care FacilityExternal but Interested Partiespayors and governmental quality evaluators
70 ICD-10 Implementation Presents an Opportunity to: Re-evaluate the organization’s strategic goals related to how it collects, maintains, and utilizes its clinical information and who along the continuum of care needs / should receive / can benefit from data.Examples:Hip replacement patient’s progress notes available to an Inpatient Rehab facility owned by Acute Care hospital where the surgery was performed.Physical therapy evaluation and notes available to the SNF jointly owned by the healthcare entity where patient was treated for initial stroke.Laboratory test results performed in the ED this morning available to attending physician responsible for Observation care in the facility later in the afternoon.Appropriate pre-order of back brace needed for surgery patient on the day of the procedure so patient can be ambulatory and discharged promptly.Referring physician’s history and physical available to Wound Care Clinic physician planning skin graft.
71 ICD-10 Implementation Presents an Opportunity to: Evaluate various ICD-10 implementation strategies to be utilized within the organization for:Tactical – assuring operations are optimized for quality care and paymentDesign implementation to take advantage of and maximize required AARA changes for optimum reimbursement.Adoption of administrative simplification requirements = HIPAA 5010 in “workable” and realistic patient care scenarios.Referral / authorization for ordered outpatient servicesData mining of recorded medical procedures, evaluations, progress notes, laboratory and imaging test results to prove clinical effectiveness!Wound healing cycle reduced due to frequent dressing changes and application of ointment
72 ICD-10 Implementation Presents an Opportunity to: Evaluate various ICD-10 implementation strategies to be utilized within the organization for:Tactical – assuring operations are optimized for quality care and paymentDesign implementation to take advantage of and maximize required AARA changes for optimum reimbursement.Proposal of quality measures for base, minimum and maximum shared savings payor contracts for chronic illnesses which includes preventive careFewer CHF exacerbations requiring inpatient stays based on weekly telephonic counseling / review of patient status / medication mgt.Accurate ICD-10 assignment based on fully compliant documentation that reports and summarizes underlying health needs of specific populations served by your healthcare entity
73 ICD-10 Implementation Presents an Opportunity to: Consider various ICD-10 implementation strategies to be utilized within the organization for:Transformation – opportunity to drive organizational changeClinical OutcomesCompleteness of captured ICD-10 data may provide added benefits thoughIncreased level of specificity for clinical quality assurance, case costing and decision support reportingIf implementation includes planning for capture and comparison dataProvides more relevant data for epidemiological, research and other secondary uses of data for health managementAllows for many more opportunities for clinical data comparison to improve service delivery and create system efficiencies / effectiveness
74 HIPAA 5010 and ICD-10 Implementation Present an Opportunity to: Consider various ICD-10 implementation strategies can be utilized within the organization for:Transformation – opportunity to drive organizational changeImprove clinical data and patient information within EMR / EHRWhat does an appropriate blood administration physician order and progress note look like?What specific data elements must be recorded?Taking into consideration JCAHO requirements for documentation of quality care AND payor requirements for reimbursement, can the blood administration electronic form be improved, condensed, made easier to understand and user friendly to document, and revised to include patient response to care in the following weeks?
75 ICD-10 Implementation Presents an Opportunity to: Consider various ICD-10 implementation strategies to be utilized within the organization for:Blended – pragmatic approach using strategic tools to manage change on a selective basisSearch for opportunities for future investments that are truly strategic and provider differentiatingAdoption of clinical management programs for structured payment methodologies for joint physician and hospital careLook at surgery volumes and established clinics you may already have in place for follow-up careNew interest in addressing / solving mental health conditions – pediatric behavioral issues or autism managementRemaining interest in reducing costs for early onset diabetes, weight management, cardiovascular disease
76 HIPAA 5010 and ICD-10 Implementation Present an Opportunity to: Consider various ICD-10 implementation strategies to be utilized within the organization for:Blended – pragmatic approach using strategic tools to manage change on a selective basis“Manage the Change!”There is no one-to-one crosswalk for HIPAA 5010 optimization of new formats or for ICD-9-CM diagnosis and procedure codes to ICD-10; requires new review of YOUR facility systems and processes; and patient payors / populations, treatment patterns, and outcomes assessmentOur opportunity to improve understanding across organizationReview workflow processes in key areas such as PAS, HIM, PFS, Contract Compliance and Risk, Patient Care Management and Quality ManagementSilos within hospital operations result in lost data, poor communication, and higher costsProcess improvement and training represent reduced costs and improved cash flow
78 ICD-10 Implementation Presents an Opportunity to: Advance key strategic initiatives in a widely spread environment because the impact of changes will be significant.Examples:Improve specialty offerings – Purchase or joint venture with physician practice to address orthopedic needs of more active Medicare populationWomen’s Health Programs – Evaluations and history of treatments summarized under medical record tab readily available to physiciansPharmacy formulary for therapeutic needs of patients – Chemotherapy and Radiation Therapy treatments, findings, continuing professional evaluations, and care plans incorporated into electronic recordESRD Clinic – Weekly dialysis results, current weight, and laboratory findings available for ED physician upon patient presentation for clogged catheter / portCreation of “accountable care organizations” to meet newly defined provider / payor contractual arrangement for reimbursement
79 ICD-10 Implementation Presents an Opportunity to: Maximize “Forced” OpportunitiesChanges in coding classifications require that all reporting requirements be analyzed, validated and re-written with clear functionalityData collection strategies, rules and underlying principles defined in current technology environmentOpportunity to review quality and usability of current reports and outputs“Flow” of data and software functionality challenged to ensure maximum performance capabilitiesMapping and data reconciliation from / to various interfaced systems requiredVendor flexibility and functionality a priority
80 ICD-10 Implementation Presents an Opportunity to: Balance the level of change with the organization’s tolerance for risk, workload required in the context of other initiatives, and economic / cost factors.Quality Measurement – Data availability to assess quality standards, patient safety goals, mandates and compliancePublic Health Reporting – Improved disease reporting and outbreak data / informationClinical Research – Detailed data mining capabilities for increased analysis of diagnosis, treatment efficacy and prevention.Organizational Monitoring and Performance –Enhanced ability to differentiate payment based on performance andto identify and resolve issues impacting patient care.Reimbursement – More accurate claims, fewer denials and underpayments, more efficiency in the billing and reimbursement process, and the ability to differentiate reimbursement based on patient acuity, complexity and outcomes
81 ICD-10 Implementation Presents an Opportunity to: Interact with Health Care Plans (payors)Each health plan will undertake its own review of mappings against medical policy, claims edits, reimbursement methods, and provider contract to understand the impact to their business processes and systems.Additionally, health plans are considering the impact to their trading partners, especially providers.Accordingly, providers should be prepared to have collaborative discussions with their payors regarding the terms and conditions of their contracts.A key input to these discussions will be a deep understanding of the ICD-10 code set and how it compares and maps to ICD-9.This will be important to keeping revenue and reimbursement flowing without aberration or issue.Changes in coding classifications require that all reporting requirements be analyzed, validated and re-written with clear functionality.
82 ICD-10 Implementation Presents an Opportunity to: Identify improvements in clinical documentation needed to drive the ability to meet payor reimbursement requirementsIdentify deficienciesTarget areas for improvementSegments of physician staffTypes of care / service provisionClarification of possible enhancements to reimbursementBetter evidence of quality care outcomes to earn additional payment
83 ICD-10 Implementation Presents an Opportunity to: Consider system-wide improvements in general areas of:Staff job role definition, automated processes, and increased productivityClinical and financial information analysis and reportingUpdated documentation / coding educationOperational and workflow processes that overlap within the Revenue Cycle and that require clinical reporting and/or data captureTargeted areas for improvementPhysicians – both employed and privateHospitalist inpatient careTop five types of specialty care or services providedInvestigation, discussion, development of possible enhancements to reimbursementClear and reportable evidence of quality care outcomes to earn additional payment
85 Implementation Challenges BudgetTime and breadth of review neededInventorying All Systems and Databases That Utilize HIPAA 5010 and ICD-9 Codes TodayUpgrading systems to 5010 and reviewing processes / proceduresTranslations of new ICD-10 diagnoses and procedures, and Crosswalks to ICD-9Staff and Physician EducationProcess / Workflow ChangesVendorsDetermining vendor readinessAssessing need for system upgradesEvaluating costs associated with upgrades vs. customized system changesEstablishing timelines for system testing
86 Mapping Between Old and New Systems General Equivalence Maps (GEMs) between ICD-9-CM and ICD-10-CM/PCS have been developedGEMs do NOT equal crosswalksReimbursement map added to CMS Website in 2009Intended for use by payorsTemporary mechanismAllows claims processing by legacy systemsAllows for data collection for reimbursement changesMaps should NOT be used for coding medical recordsIt is critical to point out that GEMs are tools to assist with implementations and not the solution itself.GEMs are NOT 1:1 crosswalks between ICD-9 and ICD-10.More and more organizations will begin posting and providing TOOLS to assist with implementation, but they should never be used to code records and should not be viewed as the ICD-10 solution for your facility.
87 Critical Success Factors for Implementation Ensure the following takes place:Knowledge transfer / education provided to key leadership teams – this is not simply an IT projectEnterprise-wide gap and impact analysis of 5010 “required” changesYour trading partners may require varying data element changes!Fully integrated hospital or facility IT and other systems – interfacesComprehensive internal and external communication plansDetailed contracts with other providers, payors and vendors with clear identification of timing, integration and conversion / translation applicationsComprehensive modeling and integrated functional testing plan across the continuum of care specific to each facility
88 Critical Success Factors for Implementation Knowledge transfer / education provided to key leadership teams – this is not simply an IT projectComplete and accurate ICD-9 and ICD-10 codified data – everyone must understand the new documentation requirementsEnterprise-wide gap and impact analysisFully integrated IT and other systemsComprehensive internal and external communication planDetailed contracts with other providers, payors and vendors with clear identification of timing, integration and conversion / translation applicationsComprehensive modeling and integrated functional testing plan across the continuum of care
89 What Have You Completed with Your ICD-10 Planning and Transformation? ICD-10 Steering CommitteeComprehensive Assessment Completed with Gaps IdentifiedIT systems inventoryDecision supportCase managementUtilization reviewManaged care/payor contractsQuality departmentFunctional areas that use ICD-9 codes that need translation5010 ReadinessEducational needs within the organizationDocumentation assessmentClaims Analysis to Identify Top Specialties Impacted the MostVendor ReadinessTesting scheduleManaged Care / payor Contract ReadinessImplemented Education PlanImplemented Documentation Improvement Plan for ICD-10CDI Program with I-10 conceptsIdentified top specialties and education to physiciansRoadmap Completed for Implementation
90 ICD-10 Implementation Plan Discussion Thank you for joining the session today!If you have questions or would like to further discuss portions of the presentation:Linda CorleyConsulting ServicesXTEND HealthcareOffice Ext. 2028Mobile
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