Mitigating cash flow risks during the ICD-10 transition & beyond
Preparation and dedication are essential for setting and achieving goals in all walks of life. From football players on the night of a big game to business professionals the morning of a presentation, most people would agree that at some point it’s time to switch gears from planning to action mode. The same can be said for ICD-10 planning. While ASCs should by no means abandon ICD-10 plans, they can make the most of this critical time by switching gears from full-scale preparations to focused risk mitigation planning.
For 51 percent of ASC leaders in America, reimbursement is the biggest challenge they face. Because of this challenge, it’s important to think of ways to streamline operations, especially when it comes to the big transition to ICD-10. Organizations’ risk mitigation strategies will largely depend on what they’ve already accomplished in their ICD-10 preparations. Depending on the ASC size and available resources, ICD-10 planning efforts have varied widely. Every provider, however, will likely experience some level of productivity loss, especially in the first few weeks of October. Many expect claim denial rates will greatly increase during the early stages of the ICD-10 transition.
With ICD-10 coming up very soon, it’s a good time to stop, take stock in your organization’s ICD-10 readiness and determine what actions you should take before October 1. As a result, you can prioritize critical activities to mitigate cash flow risks with these steps:
1. Identify potential weaknesses and develop appropriate contingency plans. Your organization’s areas of weakness will correlate directly with how much ICD-10 preparation you’ve already done. If you haven’t had the time or resources to devote to initiatives such as role-based training, for instance, you'll have more potential problems on October 1. Consequently, you may want to consider retaining back-up coders or hiring an extra set of eyes to review clinical documentation. ICD-10 impacts myriad processes - and by reviewing your team’s strengths and weaknesses, you’ll be able to determine which of these many processes may cause the most problems.
Even organizations that have adhered to a comprehensive ICD-10 transition plan may want to consider contingency plans—especially for external factors out of their organization’s control. Even if ASCs have tested all processes internally, they can’t anticipate how payers will respond to ICD-10. All organizations, even the prepared ones, may want to consider obtaining a line of credit from their bank. Even if it’s unnecessary, the additional funding can provide peace of mind.
2. Go the extra mile: perform a final gap analysis and "pressure test" your processes. If your ASC has a comprehensive ICD-10 transition plan and stuck to it, you’re undoubtedly well-prepared. Even so, high-pressure situations (such as important presentations and championship football games) tend to yield the one situation we didn’t anticipate. Applying this lesson to ICD-10, go back through your gap analysis one final time and make sure you’ve addressed every key process. This gap analysis will identify any risks or problem areas (gaps) that could potentially occur in various departments due to the transition.
Along these same lines, pressure testing is also a helpful tool. Even if you've tested your new ICD-10 processes, do another round of testing. Pick an ICD-10 day, and for a specified time, use your post-October 1 technology and processes for any relevant activities such as referrals and prior authorizations to really get a feel for what the post-transition period will be like in the days and weeks immediately following implementation.
3. Regardless of your level of ICD-10 preparation, take steps to increase patient payments. During this period of lost productivity and increased denials, one source of revenue will remain the same: patient payments. Therefore, you can mitigate ICD-10 cash flow risks by optimizing patient collections. If you don’t have patient payment technology to automate collections, you may still have time to find a solution. If not, you can take these steps to improve this process:
a. Build eligibility and verification into front-end processes. Front-end processes that include eligibility and verification will help prevent errors that lead to denials, an important benefit for ASCs already coping with ICD-10-related denials. In addition, it will arm front office staff with information regarding patient financial responsibilities, thus preparing them to collect payments at time of service.
b. Modify your patient financial policy to encourage payments at the time of service. It’s far easier to collect from patients while they’re face-to-face with your front office staff; therefore, at a minimum, ask all patients to pay their copayments and balances at the time of service. In addition, consider offering early payment or payment-in-full discounts as part of your ongoing financial policy.
c. Train front office staff to collect at point of care and make arrangements for payment in full. All front office staff should be trained to request payment at time of service. For some organizations collecting copayments and balances may be all that’s required. For others, coinsurance, unmet deductibles and deposits may be required as well. If the patient can’t pay the entire amount, staff can take a partial payment and make arrangements for the patient to pay the remainder of the balance via a payment plan. Automated recurring payment plans are great for this scenario. This method enables organizations to securely store a patient’s credit or debit card information and automatically charge the card for the agreed upon amount on the day that works best for the patient. This continues until the balance is paid in full.
Through these steps, ASCs can mitigate cash flow risks during the critical first weeks of the ICD-10 transition. As organizations create contingency plans and implement risk reduction strategies, they’ll not only be preparing for Oct. 1, but they'll also be making enhancements that can improve cash flow and increase revenue in the long term.
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