PFS’
Revenue Cycle Stabilization… a Defensive Strategy for ICD-10 & HIPAA
5010: Industry has been alerting the constituents
to the ICD-10 and 5010 conversions about the impact that these two implementations will have on provider revenue cycles. Below
you will find excerpts from representative articles and presentations from among the hundreds that can be found with a simple
web search. Each of them includes the recommendation to establish a plan to mitigate the financial impact that will come. Deloitte's Top 10 ICD-10
ListPosted
on Fri, Mar 05, 2010 - 08:52 am http://www.icd10watch.com/print/5796 7/9/2011 The ICD-10 “transformation in systems and processes is expected
to catalyze significant industry change and provide potential benefits,” including cost and quality measurement, public
health, research, as well as organizational monitoring and performance management, according to Christine Armstrong, a partner
at Deloitte who penned the firm's list, 10 things to know about ICD-10 implementation. Here's the boiled-down version: 1. ICD-10 will require a massive overhaul of the U.S. medical coding system.2. Providers should conduct a three-pronged assessment that looks at the financial, operational, and technology
aspects – and do so in the short-term.3.
The
ICD-10 Conversion will affect all areas of the revenue cycle, not just coding.4.
Hospitals
will have to upgrade multiple IT systems to support ICD-10.5.
Physician
practices face both financial and operational burdens from ICD-10 and associated technology requirements.6. Expect productivity reductions, most of all in functional areas that currently use ICD-9 codes.7. Be prepared to run dual systems during the transition.8. ICD-10 will demand significant technology changes from providers ecosystems, including IT vendors,
trading partners, external reporting entities and payers.9.
New diagnosis
and procedure codes will bring security and privacy issues.10. Medical staff, nurses, and allied health providers
will all need to be trained on the new clinical documentation and coding nomenclature.
United
Healthcare (Quote from a publication targeting Providers)Ross Lippincott, Vice President 5010 & ICD-10 ProgramsThe ICD-10 Playbook: Hitting IT Out of the
Park!Posted
on May 26, 2011 by John Casillas: http://blog.himss.org/2011/05/26/the-icd-10-playbook-hitting-it-out-of-the-park/ “Ross
Lippincott, Vice President 5010 & ICD-10 Programs, United Healthcare, then focused on the newly released HIMSS G7 Advisory
Report … Lippincott suggested that there could be a “5-year stabilization period” after ICD-10 implementation.
Thus, there is a critical need to mitigate financial risks. He echoed McDowell’s comments that a financial baseline
is required, establishing a bridge plan with a bank, reserving 6 months of cash flow and develop contingency plans,
if drops in revenue occur.” Milliman (White Paper targeting Health Plans)Patricia Zenner, Lisa Mattie and Kathy Zahariashttp://publications.milliman.com/publications/health-published/pdfs/ten-critical-factors-health.pdf “… the
increased specificity of ICD-10 will inevitably modify processes related to code edits, precertification requirements, benefit
coverage, and medical necessity policy. These modifications will not only affect productivity, but provider reimbursement
as well”. “Ten Critical Factors for Health
Plan Success in Implementing ICD-10”:1. Build a strong implementation foundation.2. Implement an organized change plan.3. Train and educate: deliver the right message, to the right people, at the right time.4. Ensure effective communications.5.
Optimize
use of available tools.6. Understand, mitigate, and plan for the financial
impact.7. Manage vendor relationships.8.
Manage
provider relationships.9. Integrate and coordinate with other priorities
and initiatives.10. Develop strategic opportunities. Top Tier Consulting (Presentation)ICD-10 Primer, Jon Melling
– President, AzHeC Western States Summit, April 12, 2011http://www.azhec.org/BinaryData//ppts//Melling_ICD-10%20Primer_815am.pdf “Revenue Cycle
performance will likely experience:Increase in unbilled receivablesIncrease in accounts receivablesSlowed and
/ or reduced cash flow”
Dell Services, Healthcare
Consulting (Presentation)Wendy Haas, MBA, RN, Dell Services, Healthcare Consulting“ICD-10 Operational and Revenue Cycle Impacts”http://www.google.com/search?q=Dell+%22ICD-10+Operational+and+Revenue+Cycle+Impacts%22&hl=en&rlz=1R2ADFA_enUS425&biw=1440&bih=689&num=10&lr=&ft=i&cr=&safe=images&tbs=
Plan to mitigate
increased A/R due to increased denials Plan to mitigate reduced reimbursement due to documentation
deficiencies” McKesson
(White Paper) “A McKesson Perspective: ICD-10-CM/PCS”http://www.strategiestoperform.com/volume4_issue9/docs/091MPT_ICD_10_WHT340_21028.pdf
Project the Impact to
Cash Flow: Develop a cash management strategy to ensure you have enough cash on hand to cover the transition period.
During the transition, plan for a higher percentage of rejected claims due to inadequate documentation or inappropriate
coding. Robert
E. Nolan Company (Presentation)Prepared For: Blue Cross and Blue Shield Association:http://www.renolan.com/healthcare/icd10study_1003.pdf
“Coding backlogs
are likely to slow payment to providers creating enormous cash flow problems and gaps in data for payers. The consequences
of such a slow down are increased inquiries among all parties, including patients, providers and health plan members,
short term borrowing costs and potential under and over payments.”
TM Floyd &
Company: (Website content)
Key ICD-10 Facts:
- Number of procedure and diagnosis codes increases substantially
- Reimbursement processes
and levels will change because of the precision of new codes
- ICD-10 will have a major impact on inpatient care setting through
the implementation of ICD-10-CM and ICD-10-PCS
- ICD-10 will have a major impact on payers operating legacy systems
- There is potential
for significant loss of productivity during and after transition
- There is potential for significant increases in accounts
receivable and decreases in cash flow for provider organizations
- There is potential for significant increases
in call volumes due to rejected claims
- There is potential for increased audits and sanctions
