Denials still a major worry as ICD-10 deadline approaches

As the October 1 deadline for implementation of ICD-10 fast approaches, healthcare revenue cycle professionals are jittery that denials of claims filed using the new medical and diagnostic coding system will skyrocket.

An August survey by Navicure/Porter Research shows that an "overwhelming majority (94%) of participants" anticipates an immediate increase in their denial rate, with 56% of respondents citing ICD-10's impact on revenue and cash flow as their top concern.

[Also: Everything you need to know about ICD-10, told in weird diagnostic codes (Interactive)]

Practice administrators and billing managers comprised the majority of survey respondents (58%), followed by practice executives (14%) and billers and coders (14%). While survey respondents represent a range of specialties and sizes, two-thirds (67%) are from organizations with one to 10 providers.

This overall level of pessimism (or is it fatalism?) may be fueled by a self-admitted lack of preparation. As the survey reports:

• Only 30% of respondents said they have improved their denial management processes in preparation for ICD-10 complications
• Only 34% have improved patient collections
• Only 17% have improved patient price estimation
• Only 19% conducted early claims testing with payers
• More than one-third (35%) "have not adjusted their revenue cycle in preparation for ICD-10"

And yet – in what might be described as unjustified optimism – 85% of respondents say they are confident "they will be prepared for ICD-10," the survey says.

Nearly one-third of respondents (31%) anticipate that clinical documentation update/coding will be the biggest challenge during the ICD-10 transition, followed by lack of preparedness on the part of payers (27%), clinical and administrative productivity losses (13%) and training (13%).

Morale killer?

Survey participants were asked to rate the impact ICD-10 will have on several areas of their operations. Nearly two-thirds (63%) expect their organizations' finances to be "negatively or very negatively" affected, followed by operations (55%) and staff morale (53%). Only 9% of respondents say ICD-10 implementation will have a positive or very positive impact on personal morale, with 7% expecting improved staff morale.

The respondents were more optimistic about the impact on patients, with 65% expecting none and 25% anticipating a negative or very negative change.

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ICD-10 contains nearly five times as many diagnostic and medical codes as ICD-9. The Centers for Medicare and Medicaid Services (CMS) announced in July several steps designed to ease the transition for healthcare providers, including authorization of advance payments to providers whose claims are being delayed because of ICD-10 problems.

Only one-third (32%) of respondents said CMS's guarantee made them less concerned about the impact of ICD-10 on revenue and cash flow. Half said the CMS offer did not make them less concerned about ICD-10's effect on the revenue cycle.

This first appeared on Revenue Cycle Insights.

Twitter: @HC_Finance