ICD-10 a serious ‘pocketbook’ issue

With the flip of the calendar to 2012, the ICD-10 implementation deadline of Oct. 1, 2013, suddenly appears very closer.

To be sure, the wheels are turning for the conversion of the current Medicare ICD-9 coding to ICD-10 and providers have just over a year to be ready. Those who haven’t begun getting their operations up to speed are at great risk of a severe revenue disruption, experts say.

“ICD-10 is different from any other initiative because it impacts everything,” said Janice Jacobs, director of regulatory compliance at Chadds Ford, Pa.-based IMA Consulting. “Every department will be affected one way or another.”

Despite the litany of federal initiatives being heaped on the healthcare industry, including meaningful use, electronic health records, accountable care organizations, value-based, purchasing, pay-for-performance and RAC audits, Jacobs recommends that work on those projects be put on the back burner in favor of ICD-10 despite the high costs associated with it.

“This will be the biggest expense to hit provider pocketbooks over the next couple of years,” she said. “There is an enormous expense associated with training, auditing and monitoring as well as hardware upgrades, software modifications and staff time associated with that.”

The ICD-10 transition will be difficult even for organizations that have their systems in place by the deadline, so imagine how tough it will be for those behind the curve, said Paula Lawlor, vice president of hospital operations for Frisco, Texas-based Conifer Health Solutions.

“The inability to get claims out the door, the inability of systems to handle it, the aging out of coders, lack of personnel, training, quality and review mechanisms…it’s a perfect storm for disaster,” she said. “And those who are currently undergoing a CPOE installation are bound to have a terrible time – it is too much together.”

‘Tough love’ deadline?

After two deadline extensions already, it is unlikely that CMS will postpone the Oct. 13, 2013, start date again, said Lawlor.

“I’m hearing people say they expect it to be delayed, yet they don’t have a Plan B in place,” she said. “While no one can be certain, I expect CMS to exercise ‘tough love’ on this deadline and stick to it. And who really wants to bet that they won’t? Everyone needs to prepare and have a Plan B and Plan C.”

Terrell Warnberg, who manages Dell’s ICD-10 Consulting Practice, agrees: “I’m not advising my clients to believe it will be extended. We are counseling clients to move ahead and they have approximately 18 months – 600 days and counting – to get ready.”

In all actuality, providers should be ready to start July 1, said Warnberg, warning “you don’t want to be pushing October.”

‘Roadmap to remediation’

The cost challenges to the CFO will be substantial, said Warnber, citing cost estimates of $1.6 million to $6 million over two years.

“This is not just an IT issue and not just a coding issue – this is an enterprise-wide initiative that courses everywhere,” she said. “It’s not just the codes, but the diagnosis information that comes in through the front end, through all the floors, the ICD-9 codes in the equipment that need to be remediated, infection control and when you add it up, it’s pretty pervasive. Building the roadmap to remediation is everywhere.”

Even those organizations that have done everything possible to get ready for the conversion will endure some financial turbulence, said Jacobs.

“There are so many variables that there will be some sort of revenue impact for hospitals so they should build that into the budget,” she said. “Everyone asks me to quantify it, but in looking at their situation, it’s hard to put anything together on that. So I tell them that ‘you know there will be some revenue impact, so prepare for that disruption and offset it in order to keep operations going.’”

Opposing ‘lenses’

While not discounting the 2013 deadline, payers aren’t as stressed about being ready because “they have been working on ICD-10 for several years already,” said Ken Fody, Dell’s ICD-10 payer consultant. The level of preparedness depends on the size of the organization, with major companies like United Healthcare, Aetna and the Blues already well situated for the change. “The larger the payer, the earlier they got started,” he said.

Combined payer-provide organizations like Kaiser Permanente, UPMC and Geisinger face a more difficult task, however, said Fody, because both ends of the claims pipeline “are like lenses with the wide end facing away from each other.”

‘Snippets’ of progress

Margaret Gaskill, billing and EMR systems manager at Mercer Medicine in Macon, Ga., is heading up the ICD-10 project for the 40-physician clinic and says she is moving it along in “little snippets” to keep it manageable. The heavy lifting will start this year, however, as the process of educating the doctors on the new format begins in earnest.

“This year will include training about the type of documentation we need in the billing department for simple office visits, which isn’t too difficult because there isn’t a whole lot of difference between ICD-9 and ICD-10 on this,” she said. “We won’t start coding for doctors until next year.”

Once physician training begins, Gaskill and her team will need to instruct her pupils on the “micro information” that comprises the ICD-10 lexicon. Because the clinic physicians cover a broad spectrum of specialties from psychology to infectious disease to nephrology, all will have to be taught the new nuanced coding for their disciplines. Internal medicine and family practitioners will have the most codes to know and therefore have the biggest learning curve.

While Gaskill realizes the vast scope of her ICD-10 responsibilities, she maintains she is keeping a cool head throughout it all.

“I don’t let the big number scare me – I have broken it into pieces and am building it slowly, piece by piece,” she said. “When the deadline comes, my company will be ready.”