ICD-10, transformation of revenue cycle

Healthcare providers are expecting some form of slow down in accounts receivables immediately after the ICD-10 conversion in October 2014 – but less than one year from the deadline, it remains uncertain how significant these may be.

“It will put pressure on providers to watch their revenue cycle performance and if it's deteriorating try to figure out why, get a root cause, whether it's on their side, the health plan side or it might be shared,” said Kaveh Safavi, managing director, North America Health Industry Lead at Accenture.

Indeed, the concentration on revenue cycle will likely center on mitigation in the days after Oct. 1, 2014, but the first step providers can take right now is to map out the revenue cycle against the anticipated changes.

“There are many parts of the revenue cycle that are touched by the conversion to ICD-10 and providers need to figure out what changes need to be made from a process, people and technology perspective throughout that continuum,” said Christine Armstrong, principal, Deloitte and a member of the firm's ICD-10 conversion team.

This survey needs to start right at the admissions desk and run all the way through the organization to patient discharge, Armstrong added. It should include finding out how the provider is capturing a code, whether it is done electronically or via a charge ticket or other method. Once organizations understand all the touch points of coding on the revenue cycle, they may choose to make changes now to improve performance.

“You need to determine whether [how you capture ICD-9 codes now] can be done differently and if you can add a technology solution and somehow embed this into your electronic health record,” Armstrong said.

Nav Ranajee, vice president of sales for revenue cycle company Pyramid Health Solutions, suggests providers should consider “dual coding” in the lead up to ICD-10.

“Dual coding is a very resource-intensive process,” Ranajee said, “because you are taking a patient record and not only coding it in ICD-9 but also in ICD-10. Dual coding can help identify, early on, what some of the issues may be. But it is also good practice: not only can it identify potential problems, but also opportunities.”

Testing and Benchmarking

Testing, too, will play a large role in how well a company is able to preserve its current cash flow after Oct. 1, 2014 and providers should also take the opportunity to reach out to their roster of payers for more than just testing that addresses the technical aspects of ICD-10.

“One of the things we are doing with our clients today is working on collaborations to exchange that claims data set between the providers and the health plans,” said Melinda Reno, principal, Deloitte. “That enables the providers to natively code these claims, using a medical record similar to how they will do it on Oct. 1, 2014, and the payer will adjudicate them and provide the response back to how they would have paid that claim.”

Engaging in this process should give providers a clearer picture of the pends and denies – which are a big worry after the switch over – as well as pricing pends. The result, Reno noted, is a clearer view of how a provider's contracts with payers will operate in an ICD-10 world.

Finally, providers will want to create benchmarks based on their ICD-9 coding proficiency to use as a comparison once ICD-10 coding begins. Using their ICD-9 benchmarks, providers should also plan for ongoing monitoring of the coding operation from day 1 of ICD-10 with an eye on performance.

“The first question you'll need to ask on October 1 is: ‘Is it still working?’ You probably didn't test for everything, so you just need to make sure that all of your systems and processes are at least working in some sense,” said Stanley Nachimson, the principal with the health IT consultancy Nachimson Advisors.

That means taking an immediate survey to ensure that coders are still coding, that management systems are still working as needed and that claims are getting out the door to payers. If not, Nachimson says providers need to have personnel in place to quickly fix any problems that may have significant impacts on revenue.

“You might see that revenue has dropped 50 percent and you can send a report to the CFO,” Nachimson said. “That information is nice to have, but if you don't have a response team in place you are in big trouble.”