HIPAA 5010 & ICD-10 Compliance Program Impact on Physician Practices Luis E. Taveras, Ph.D. December 2010

Executive Overview Agenda  Background  The Migration to 5010  The Migration to ICD-10  Impact on Physician Practices  Q & A

Background  Healthcare Providers must implement the new HIPAA 5010 Transaction Standards and must upgrade from ICD-9 to ICD-10 by the federally mandated deadlines:  5010 – January 2012; ICD-10 – October 2013  Available diagnosis codes: 14K to over 68K  Procedure codes: Nearly 4K to over 72K  5010 Impact: Updated HIPAA transaction standards for electronic exchange of administrative and financial information with Payers  ICD-0 Impact: IT remediation, updated policies and procedures, all clinical forms, coding, extensive education and training in all departments  Expected outcome: Cost effective & timely compliance

The Migration to HIPAA 5010 The existing standards are over six years old and enhancements are needed to address current issues.  Objectives of HIPAA 5010  Addresses shortcomings of 4010  Prerequisite for ICD-10  Key differences between 4010 and 5010  800+ modifications to the HIPAA transaction sets  Primary technical changes including adds, changes, and deletes

The Migration to ICD-10 The additional fields and characters used by the ICD-10 coding scheme enable greater detail and flexibility in describing diagnoses and procedures  Objectives of ICD-10 Provides richer detail regarding diagnoses and procedure codes Greater ability to conduct research and innovation with broader code sets Aligns the U.S. with the global community  Key differences between ICD-9 and ICD-10 ICD-10 codes are alphanumeric The field length is longer – enables more codes ICD-10 Codes150,000 versus 24,000 in ICD-9  Diagnostic Codes 13,000 to 68,000  Procedure Codes 11,000 to 87,000

HIPAA 5010 & ICD-10 Compliance Program A Report to the ICD-10 Coalition October 8, 2008 Study Conducted By: Nachinson Advisors, LLC

Study Results  Study: Scope of ICD-10 Implementation for Physicians and Clinical Laboratories  Study funded by:  The American Academy of Dermatology  American Academy of Professional Coders  American Association of Neurological Surgeons  American Association of Orthopaedic Surgeons  American Clinical Laboratory Association  American College of Physicians  American Medical Association  American Optometric Association  American Physical Therapy Association  American Society of Anesthesiologists  Medical Group Management Association

 Types of Provider Practices  A “Typical” Small Practice  Three Physicians  Two Administrative Staff  A “Typical” Medium Practice  10 Providers  1 Full Time Coder  6 Administrative Staff  A “Typical” Large Practice  100 Providers  64 Coding Staff 10 Full Time Coders 54 Medical Records Staff Study Results

 Total Estimated Cost Summary Typical Small Practice Typical Medium Practice Typical Large Practice Education $2,405$4,745$46,280 Process Analysis $6,900$12,000$48,000 Changes to Superbills $2,985$9,950$99,500 IT Costs $7,500$15,000$100,000 Increased Documentation Costs $44,000$178,500$1,785,000 Cash Flow Disruption $19,500$65,000$650,000 Total $83,290$285,195$2,728,780 Study Results

 Impact  Documentation Procedures  Record Keeping Procedures  Fee Schedules  Medical Review Edits Applied by Health Plans  Quality Measures to Access Performance “It is not difficult to determine where the impact of the coding process begins for providers. While the codes may not be documented until the claim for payment is filed, the documentation for determining the appropriate code starts as soon as the patient visit starts.” (p. 9) Study Results

 Role of Documentation in the Conversion “For documentation supporting diagnoses or procedures, physicians first must ensure that the services provided are consistent with the symptoms of the patient and that they satisfy generally accepted medical standards. Part of this effort requires that physicians understand and remain current on the relevant documentation standards. Physicians should strongly consider attending coding and documentation workshops on an annual basis to establish and to refresh their skills in documentation, and to master charging requirements.” Procedures to improve your claims”, Jeffrey B. Miller, Esq. & Alice Anne Andress, Physicians New Digest, October Study Results

 Super Bills  Will all Need to be Revised to Reflect New Way of Coding and the Additional Codes  Size: Approximately 5 Pages in Length – Practicality?  May Need Electronic Code Selection Software to Manage Paper Based and EHR-Enabled Practices  Paper Based practices may no longer be practical  Expect a Major Move to EHR-Based Practices Which Will Complicate the Transition and the Associated Costs Study Results

 Project Plan for Practice Compliance  Training  Analysis of Internal Practices Business Processes  Patient Flow, documentation, billing  Contact Trading Partners  Vendors, health plans, device manufacturers, etc.  Determine Implementation Schedule to Minimize Disruptions  Update Systems and Documentation Process  Review Participation in Health Plans  Assess Staff’s Understanding and Ability to Implement the Required Changes  Manage Relationship with Trading Partners to Assure Transition is Moving According to the Plan  Testing Plan for all Changes  Testing Plan with all Trading Partners  Make the Final Transition

Questions & Answers