There is no doubt that the U.S. healthcare system will transition to ICD-10. Whether it happens in 2011, as proposed by the Centers for Medicare & Medicaid Services (CMS), or at a later date, it is coming.
The potential benefits for ASCs from the transition to the expanded code set are fairly significant and include more accurate payments, fewer rejected or improper claims and better understanding of new procedures. However, to realize those benefits, ACSs will need to invest heavily in systems and training.
For those ASCs that lack formal coding processes or systems to fall back on, the transition will be that much more complex. That is why you need to be aggressively proactive in planning for ICD-10, in part by implementing the following 10 steps to ease the pain of the transition and begin realizing the benefits of the new system more quickly.
1. Establish a transition team
Because of its granular nature, the move to ICD-10 will affect more than just your coding and billing staff. That is why it is imperative to put together a well-rounded transition team made up of representatives from coding, clinical, finance and information technology. The team should have a working knowledge of ICD-10 and how it differs from ICD-9, as well as the expected short- and long-term financial and personnel impact of the transition.
Communication is especially critical to a successful transition. As such, the transition team should commit to regular meetings, as well as establish communication channels to provide senior management and affected staff members with status reports to keep them updated on progress, next steps and any issues that arise throughout the process.
2. Develop a transition plan
The first task of the transition team is developing a transition plan and timeframes. The plan should identify specific actions and assign responsibilities and deadlines for achieving them, including any changes to processes, policies and procedures, as well as education needs. It is important to also identify any need for increased staffing or consulting services to assist with coding backlogs, monitoring of coding accuracy, etc., as well as system upgrades or changes necessary to accommodate the new code set.
The plan should establish a budget for accomplishing the transition and estimate the financial impact the expected loss of productivity and disruptions in cash flow will have. This is particularly important given the costs associated with completing the transition. Nachimson Advisors estimates that a small physician practice (three physicians and two impacted staff members) will spend more than $83,000 and a large practice (100 providers and 64 coding staff) will spend in excess of $2.7 million.
3. Identify the impact on key business processes
To understand the impact ICD-10 will have on key business processes, including health plan contracts and coverage determinations, the team should conduct a detailed assessment. This should identify any contract modifications that may be necessary to accommodate the greater specificity required for ICD-10 and any resulting adjustments to payment terms. Additional documentation requirements and new diagnostic codes may also cause revisions in coverage determinations.
4. Assess adequacy of existing documentation
Because of the higher level of specificity required under ICD-10, it is important to ensure your clinical documentation contains enough detail to support code assignment under the new system. This can be accomplished by evaluating random samples of medical records to identify areas where documentation is lacking, as well as diagnoses and procedures that will require a higher level of detail.
By assessing existing documentation, areas of weakness can be identified and addressed prior to the transition. The documentation improvement strategies identified in the assessment can also serve as the foundation of staff education programs.
5. Design staff education programs
The transition to ICD-10 is more than a simple code-set replacement. Because ICD-10 is more granular and detailed, even professional coders and billing specialists who are very comfortable with ICD-9 will require specific training to become proficient with the new diagnostic codes and documentation requirements. Further, because few ASCs have a dedicated coding staff, responsibility for ensuring accurate documentation and code assignment will typically fall to billing clerks who rarely have specific coding expertise, which makes training and education all the more critical.
However, education cannot focus solely on coding and billing staffs. If electronic documentation and coding systems are not utilized, physicians and nurses will need training on capturing the appropriate level of information in procedure documentation to support coding under ICD-10. The IT staff will also need to be educated on the difference between ICD-9 and ICD-10 to determine whether current systems and interfaces need to be built or modified in any way.
6. Meet with payers and billing vendors
Just like providers, health plans must also transition to ICD-10. In addition to upgrading their own systems to accommodate the new coding formats, payers will need to revamp coverage determinations and reimbursement rates. As such, it is important to sit down with payers early in the process to gain a clear understanding of what they will be looking for under ICD-10, establish when they will be ready to begin receiving claims coded under the new system and determine what, if any, interim plans they have.
Further, for those ACSs that utilize a billing service or clearinghouse, it is important to meet with those vendors to ascertain their plans for rolling out ICD-10. Discussions should also focus on how billing vendors will support the ASC during the transition period.
7. Establish procedures to accommodate coding in both environments
Because it is very likely that payers will make the transition to ICD-10 at different paces, establishing a process to accommodate coding in both environments ensures that ASCs can submit claims and receive reimbursements in a timely manner. This will be a difficult manual process if you aren't working with some sort of electronic documentation system before the transition.
You'll need to determine the length of time both systems will need to be supported, and any additional storage capacity that may be necessary. For internal IT representatives, you'll need to know how long the ICD-9 system will be accessible and by whom. For example, anyone responsible for data analysis will likely require access to the old system for longer than coding and billing personnel. The billing department may also require longer access to ICD-9 to process older claims and for any re-billing.
8. Evaluate existing documentation, coding and billing systems
A thorough evaluation should be conducted of any IT applications that will potentially be impacted by the change to ICD-10, including practice management, scheduling, billing, documentation, coding and/or electronic medical record systems. In most cases, software modifications will be needed to accommodate format changes, new diagnostic codes, etc. For example, ASCs that utilize superbills will need to make significant changes to accommodate the expanded number of codes contained within ICD-10.
Software modifications will likely include expanding field sizes, changes to alphanumeric composition, decimal use, redefining code values and interpretations, edit and logic changes, table structure modifications, etc. It will also be necessary to determine if you'll need to modify or redesign any reports or forms, as well as to determine any changes to other applications that will be impacted by the new code set.
This step will consume a significant portion of the ICD-10 budget. According to Nachimson Advisors, changes to the superbill alone will range in cost from nearly $3,000 for a small practice to $99,500 for a large practice. IT system changes will range from $7,500 for a small practice to $100,000 for a large practice, while increased documentation costs will range from $44,000 for a small practice to nearly $1.8 million for a large practice.
That is why, for those ASCs that have not already done so, now is a good time to consider making the investment into procedure documentation and coding systems. Doing so will ease the transition to ICD-10 and allow ASCs to take advantage of the increased revenues and streamlined workflow processes made possible by automating these processes.
9. Meet with system vendors
Software vendors, particularly those whose applications link directly to the documentation, coding and billing processes, should play a key role in easing the transition for their ASC customers. In fact, system vendors should ideally take on the "heavy lifting" by providing clients with upgrades that allow them to automatically produce coder-ready documentation appropriate for ICD-10, and also to accommodate the dual-coding environment that will likely be necessary during the early days of deployment. However, not every vendor will be willing or able to do so. That is why it is important to meet with them early in the process to ascertain exactly what role they will play in the transition process, any support they can or will provide and any costs for them to do so.
Key issues to discuss include vendor readiness and timelines for upgrading software to new coding systems and whether or not upgrades are covered by existing contracts. It will also be necessary to coordinate any software or upgrade installations and testing.
10. Designate a monitor
CMS may have issued its mandate regarding the transition to ICD-10, but that does not mean there won't be rule changes between now and then. For example, will CMS fully embrace ICD-10, including both CM and PCS, or will they continue to utilize CPT codes? What are the HIPAA implications of ICD-10? By designating one individual to monitor any changes to the mandate, an ASC can ensure they are making the most appropriate use of resources to achieve compliance in a timely manner.
Making the transition to ICD-10 will be neither easy nor cheap. By getting a transition plan in place now and following the steps outlined above, you'll be able to move past the expected productivity and revenue losses far more quickly and realize a more rapid return on investment into the new systems and processes required to comply with ICD-10.
Sean Benson (sean.benson@provationmedical.com) is co-founder and vice president, consulting, with ProVation Medical (www.provationmedical.com), which provides procedure documentation and clinical decision support solutions for hospitals and ASCs. ProVation Medical is part of Wolters Kluwer Health, a leading provider of information and business intelligence for students, professionals and institutions in medicine, nursing, allied health, pharmacy and the pharmaceutical industry.