July 13, 2012
A comprehensive ICD-10 assessment
What do the Mayan
calendar and the ICD-10 transition date have in common? They both prophesize
the end of the world, and both deadlines have been extended past their original
date. OK, transitioning to ICD-10 doesn't mean the end of the world, but it does
represent one the biggest changes ever to hit the health care industry. So let’s
take a minute to revisit that foundational step in the preparatory process -
the comprehensive assessment of risks and impact.
Have you included all that
you need for a comprehensive assessment? A comprehensive assessment includes a
review of the impact of ICD-10 on operational workflow, technology and people.
It also includes how transition activities integrate with competing projects
that are likely on your road map. It might seem like a daunting task
considering the complexity of this change and the sheer number of processes it
will touch, but putting a comprehensive plan in place is the first step to a
successful transition. The goal of the
assessment is to identify gaps in operational and technical capabilities, current
readiness and potential risks. The assessment should provide the road map to
preparation for the proposed transition date of October
1, 2014. The three primary
focus areas for the assessment are operations,
financial and technology.
Let’s start with
operations. The operations assessment starts with a review of functional
processes such as clinical care, clinical documentation, registration, coding,
billing and payer relationships. The goal is to identify and inventory which
functional processes actively utilize ICD-9 today to determine if the enhanced specificity required for ICD-10
will necessitate a change in these processes. The revenue cycle process is the
area with the greatest impact, but don’t underestimate the impact that clinical
processes will have on your revenue cycle. A complete walkthrough from
registration and scheduling to the ordering processes, clinical documentation, coding,
billing and reimbursement is a critical element of the operations review. Anticipate
and plan for process improvement efforts over the next two years to ensure that
you are driving efficiencies in your organization and are prepared for the
productivity hit associated with the transition to ICD-10.
The financial review
will include a quantitative analysis of the impact on coding and reimbursement due
to ICD-10 coding. The financial impact analysis consists of reviewing claims
data to identify potential impact on Diagnosis Related Group (DRG) assignment,
diagnosis groupings, Case Mix Index and managed care contracts. A readiness
assessment includes reviewing revenue cycle metrics such as Discharged Not
Final Billed (DNFB), accounts receivable stats by payer and initial denial rate.
The expectation is that cash flow and collections will be impacted during the
transition, so it will be critical to assure that processes are in place to
actively report and manage the impact on revenue. It won’t be acceptable to
simply report at the end of the month that collections have been impacted. Prudent
management will require preparation, active management and timely intervention
to minimize the impact on cash flow.
The technology assessment
begins with the inventory of vendor systems and applications, as well as interfaces
and trading partners. The vendor inventory should include even those systems
that are not maintained by the IT group
including: small research databases, clinical registries and regulatory
reporting that may be present in your organization. Once you have an inventory
of the applications that are potentially affected by ICD-10, you will want to
reach out to your vendors to understand their level of readiness, including
what code level supports ICD-10, and if there is an upgrade required. It's also
important to determine configuration activities that may need to take place
leading up to the transition and the timing for when those changes should be
done. If there is one lesson to be learned from the 5010 transition, it’s that
there should be more emphasis on testing the system prior to the transition
date.
Last but not least, it
is imperative to assess the impact on people. Like Y2K, the ICD-10 transition happens
on the same date for everyone. Anticipate that certain resources, such as
coders, will become a scarce resource so your HR staff will need to have a
strategy in place to recruit and train staff. Unlike Y2K, the software
remediation process requires that staff with clinical knowledge be involved in
the software remediation effort. Therefore, clinical resources will need to be identified
and budgeted for early to assure that preparation is done correctly and testing
is thorough and complete.
Once you have
completed your comprehensive assessment for ICD-10, you should have a good idea
of the work effort that will be required over the next 2 years. Outcomes from
the assessment should include an initial budget, financial analysis, governance
structure and a detailed project plan. Also realize that you will likely
uncover additional requirements as you progress through you transition, so be
flexible in your approach and keep the plan updated along the way. October 1,
2014, seems like a long way away, but in reality, its right around the corner.
Randy
Hawk helps
position health care organizations to proactively respond to the current and
future health care economy. This includes providing education and comprehensive
strategies for surviving and thriving post American Recovery and Reinvestment
Act of 2009 and Patient Protection and Affordable Care Act of 2010. Hawk
joined the team after four years with Cerner helping to develop innovative
solutions for employers’ self-funded health benefit plans. Hawk coordinated the
business relationships with the national PPO networks, pharmacy benefits
management companies, regulatory compliance and claims clearinghouses. Hawk’s
experience prior to joining Cerner is a broad mix that includes positions in
hospital administration, medical group management and managed health care. His
managed care background includes senior leadership positions with several
regional health plans in California, New Mexico, Kansas and Missouri.