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The US healthcare system will be converting to a new code set, ICD-10-CM, which will replace the current version ICD-9-CM. The transition to ICD-10 will require considerable changes in office processes and is expected to affect every aspect of business operations. The financial impact of ICD-10 conversion has been estimated to cost anywhere from $83,290 for a small group practice (3 providers), $285,195 for a medium-sized practice (10 providers), and as much as $2.7 million for a large practice (100 providers). Preparations should therefore include a line in the budget for planning and implementation expenses.
Aside from the significant financial impact, providers should also take into consideration the risks of non-compliance. Those waiting until the last minute for implementation will inevitably experience considerable adverse effects including authorization delays, claim denials, improper payment, and revenue stream interruptions. Lack of readiness will affect compliance with government mandates as well as national reporting and analytic standards.
While this may all seem quite burdensome, it is important to note that the transition to ICD-10 provides ample opportunities for improvement and transformational value to your practice. Expanded diagnosis and procedure specificity and granularity can have positive impact in areas such as patient care, operations, and information technology by providing a higher level of specificity and detail, and better flow of information across the care continuum. Taking a systematic approach to implementation will help facilitate the transition and simplify the many moving pieces that will have to be addressed during the planning stages, as well as pre and post implementation.
Preparing for ICD-10-CM implementation will require communication and significant collaboration across many physician practice areas. Selecting the right individuals for the job may depend on the size of your practice. Large practices may recruit individuals from different departments and areas of the practice to assist with implementation. Small practices may enlist one or two staff people who will manage the transition for the entire practice. Regardless of practice size, there are six major areas that will be impacted and as such, should be addressed in order to ensure a smooth transition to ICD-10.
Significant time and resources will be spent on training and educating both clinical and administrative staff. Learning the new codes will not mean a simple substitution from one code to another. Learning patterns and relationships among codes will require a steep learning curve for everyone involved. Small and medium-sized practices that do not employ professional coders will need significant detailed trainings that will cover key areas including, documentation of patient activities, coding of administrative and medical records, information technology integration, insurance transactions, and payer contracts. These key areas of training are also necessary in larger practices that have in house coders. It is also important to note that any administrative staff that help or manage practice data and reporting will also require a certain degree of education as the shift in coding will impact this area as well.
Creating an effective education plan begins with a thorough training needs assessment that will help you establish a solid benchmark with key focus areas. The education plan should spell out clear objectives, methods that will be used to accomplish the objectives, as well as an instructional design that can be applied to different training scenarios depending on the need. Creating a clear timeline for education rollout (it is suggested that in-depth training of coders should begin at least 3-6 months prior to implementation), and measuring outcomes are also important steps that should be taken into consideration during the initial education and training development process. It is estimated that staff education and training costs associated with ICD-10 would range from $2,405 for small practices to $46,280 for large practices.
An assessment of the impact of full scale ICD-10 implementation on business processes will need to be done in order to best understand the impact to your practice. The assessment should cover the impact on business processes, including changes to payer contracts and coverage determinations.
Payers may modify contracts to comply with the greater specificity that’s required with the ICD-10 mandate and payments will need to be adjusted accordingly. Understanding contract changes and the impact to reimbursement is important as it could mean shifts in revenue based on billed codes after implementation and understanding those shifts in advance is beneficial. If possible, review your contracts and work with the plans to add language that allows for reimbursement protection during the transition period. By taking such actions your office will experience less financial impact when it comes to reimbursement.
Coverage and benefits for patients will be another area that may change to fit the new diagnostic codes and documentation required to support a patient’s treatment plan. Increased specificity in the ICD-10 code set means that a general code that was sufficient for a patient to receive coverage under his or her plan may no longer suffice and benefits may shift based on the increased specificity. The significant resources associated with understanding and implementing the changes described is estimated to cost between $6,905 for small practices to $48,000 for large practices2.
Most physician practices will need to change their encounter forms (or “superbills”) to accommodate for the new ICD-10 codes, which contain five times as many codes as the previous ICD iteration. Significant changes will be required to existing encounter forms to specify the medical services provided. To start, identify which codes are most often used in your practice today and then take those codes and translate them to the ICD-10 format. While some EMR software vendors may help with this transition by providing coding system crosswalks that will automatically translate the codes, it is important for physicians and practices to take an active role to make sure that the “complete meaning” of the codes match as sometimes one ICD-9 code may translate to several ICD-10 codes. It is important for practices to make sure that all of the services they provide are appropriately represented on encounter forms or otherwise. It is estimated that the costs associated with updating encounter forms and superbills to ICD-10 range from $2,985 for small practices to $99,500 for large practices.
Software modifications to practice management systems and billing systems will be necessary to accommodate the new ICD-10 codes. All IT products will need to be reviewed and updated in order to ensure a smooth transition including, the practice management system vendor, the EMR vendor, the billing (third party biller) service vendor, and others. Checking with clearing house and billing service vendors early on to make sure they are compliant with ICD-10 standards will facilitate testing and other changes that have to take place well before the compliance deadline. Working with vendors to test transactions is extremely important in order to make sure information is flowing properly between systems. It is estimated that costs associated with transitioning all information technology to ICD-10 would range from $7,500 for small practices to $100,000 for large practices.
ICD-10 codes contain a much greater level of specificity and granularity. The additional documentation required to support the patient’s diagnosis is expected to increase drastically. Thus, training all coding staff or working with external coders to target and pinpoint existing areas of weakness under ICD-9 and training clinicians on proper documentation well in advance of the ICD-10 transition date is key. Encouraging proper documentation early on and familiarizing physicians with the new code sets will help to make sure all codes are properly supported during the documentation process.
Analyzing current documentation practices in order to identify weak areas and putting a plan into place in order to fix any weaknesses under the current system is important as those weaknesses will be magnified in an ICD-10 world. A documentation gap analysis should be performed in order to determine any areas of weakness and a plan for educating documenting clinicians and repeat reviews will help to minimize any financial loss associated with weak documentation. The Florida Medical Association provides ongoing educational opportunities as well as specialized services that are geared towards optimizing documentation practices in the ICD-10 world.
Performing coding and documentation audits prior to ICD-10 going live will prove to be time well spent as it is a necessary step to meeting documentation requirements and ultimately maintaining a solid revenue stream throughout implementation and post go-live. Costs associated with increased documentation standards are estimated to range from $44,000 for small practices to $1.76 million for large practices3.
Changes to payer reimbursement amount are expected to change as health plans alter their fee schedules to accommodate the new ICD-10 diagnosis codes. Changes in coverage based on severity of diagnosis will affect reimbursement patterns and will most likely disrupt provider cash flow during, and well after, the compliance deadline. Planning for this cash flow disruption in advance is extremely important and creating a plan with potential options to help accent cash flow disruption in support of financial stability during and after ICD-10 implementation is important. Options may include securing lines of credit or other methods of cash accessibility and budgeting for cash flow delay.
Additionally, knowing what the most frequently billed codes in your practice are today can assist in helping to monitor cash flow upon implementation. For example, knowing the top 10 codes currently billed and cross walking those codes to the new code breakouts can give you a better sense of the number of codes and type of codes you will expect to see under ICD-10. This will then help you to monitor expected revenue based on the code ratio post-implementation. It is extremely important to communicate with your payers and software vendors during the transition and post-implementation as issues come up so that they can be addressed as quickly as possible. Costs associated with disruptions to cash flow are estimated to range from $19,500 for a small practice to as much as $650,000 for a large practice3.
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