ICD-10 and revenue cycle readiness

If you review the various reports and statistics regarding ICD-10 readiness, you know that there’s still plenty of work to do before the Oct. 1 deadline. A recent MGMA study polled 1,200 practices with more than 55,000 physicians and found that only 4.8 percent reported significant progress in overall ICD-10 readiness. Hospitals report higher levels, but many are still behind.

There’s a palpable concern and a sense of urgency in many corners of the healthcare industry – concern that mimics that surrounding Y2K over 14 years ago. But while Y2K preparation was far more nebulous and varied, ICD-10 readiness is a fairly well-defined process. With Y2K, no one really knew what the outcome would be. With ICD-10, the impact is clear: delayed reimbursement.

For hospitals looking to protect their revenue streams, verifying compliance of financial connectivity software is a good way to start the process. But preparation for a successful transition involves more – including education, testing and process improvement. So, with seven months to go, here are some key suggestions to help any healthcare provider with the transition:

Test, test often, and test again. This sounds easy, but can be challenging if the payers you work with are not testing or testing with a limited number of providers. If you can’t conduct end-to-end testing, don’t worry – try formulating partnerships with select payers and work toward testing on the side. And what does “end-to-end” testing entail?  More than uploading claims to a portal or exchanging spreadsheets, it involves sending claims through the same channels used in “live” situations.

Start educating. Coding staff must be trained in the ICD-10 methodology, which features a vast increase in the number and complexity of diagnosis codes. Physicians and others who document conditions must also invest time learn compliant coding so that fees are billed properly. There are multiple options for training, ranging from self-paced online and book-based courses to instructor-led classes held off-site or at your location. Regardless of the format, make sure education is done over time, rather than all at once. Many providers are concerned about charts being detailed enough for coders to code to the new specificity. Ensuring that the coders are prepared to handle all new codes properly will help identify gaps.

Know the KPIs that will be affected.  These include denials, rejections and the time a claim takes to pay after it leaves your clearinghouse (also called ‘release to payment’).  Get benchmarks, and make sure you are doing better than all of these KPIs. Don’t just look at overall revenue cycle performance, but at specific KPIs – not just for any provider, but for those of similar size, region and focus. Gaining access to the KPIs of similar hospitals and improving your own prior to Oct. 1 will provide a much more accurate view of how things are going in the days and weeks after the deadline – and enable smarter decision making.   

Track those KPIs on 10/1 and monitor them afterward.  Optimizing your processes before Oct. 1 will provide a much more accurate view of what’s working and what’s not after Oct. 1. Knowing where you stand prior to the “go live” date will help you understand how ICD-10 is influencing the KPIs and can help prevent a lot of re-work.

Be prepared to send ICD-9 and/or ICD-10s.  Some payers will not be ready for ICD-10 on Oct. 1. We won’t know which ones until that day, so providers should be ready to send ICD-9 and ICD-10 claims to any payer – not just on Oct. 1, but in the days following.

Think big, and communicate outside of your comfort zone. Consider the big picture, and prepare a checklist of everything that could impact your business. Then communicate with each department involved and make sure everything is covered. Sharing information and fostering productive relationships between payers and providers can go a long way toward enhancing readiness. Similarly, sharing information and findings from analytics with providers who are unable to test can help. We’re all in this together.

Remember, it’s possible that every claim you submit could be rejected or denied on Oct. 1st. And, regardless of the acceptance and rejection rates, remittance will be delayed as payers adjust. This will pass, but your preparation in advance will help smooth the transition. Time is short, and there’s no single technological shortcut. From now until Oct. 1, it’s all about testing, education and benchmarking.