ICD-10 & PATIENT
FINANCIAL SERVICES
Stacey L. Harper, RHIA, CPC, CPMA
Senior Manager, WeiserMazars LLP
Agenda
2
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Introduction

ICD-10 Overview

Impact of ICD-10 to Non-HIM Areas

Hidden Costs for ICD-10 Transition

Preparing for the Transition
ICD-10 Overview
What is ICD-10?
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4
ICD-10 is a diagnostic coding system
implemented by the World Health
Organization (WHO) in 1993 to replace ICD9, which was developed by WHO in the
1970s. ICD-10 is in almost every country in the
world, except the United States.
Introduction to ICD-10
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ICD-10 is the new coding set that replaces the current set, ICD-9
ICD codes are used to assign diagnosis and procedure information to claims
in order to generate reimbursement
ICD-10 is the biggest change in standard coding systems in over 30 years
Conversion from ICD-9 to ICD-10
(Approximate number of codes)
ICD-9
ICD-10
72,000
69,000
Deadline for compliance:
October 1, 2014
13,000
Diagnosis
5
11,000
Procedure
Implementation on October 1, 2014

ICD-10-CM: Diagnosis coding
 Used
for inpatient and outpatient
 Used by providers, coding and other clinical/operations
staff

ICD-10-PCS: Procedure coding
 Used
for inpatient only
 Used primarily by coding
 CPT© codes will continue to be used for outpatient
procedure coding
6
ICD-9 vs. ICD-10
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ICD-9 vs. ICD-10
8
ICD-9 vs. ICD-10
9
ICD-10 Procedures
10
Key Notes on the ICD-10 Transition
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A substantial percentage of ICD-9 codes do not map one-to-one to
ICD-10 codes; this requires human intervention to determine the
correct code
The codes do not map the same ‘forward’ (ICD-9  ICD-10) as they
do ‘backward’ (ICD-10  ICD-9)
Although CMS has published a translation tool, it has left the specific
determinations up to each of the individual payers to derive how to
interpret the codes and the mapping
DRG reimbursements to Hospitals are based on ICD-10 groupings
and will change
The code change effective date is based upon discharge date;
consequently, there will be a large window (~3 years) in which both
ICD-9 and ICD-10 codes will need to be accepted (dual processing)
Source: HIMSS Virtual Event 2011
11
Benefits of ICD-10
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Greater coding accuracy and specificity
Higher quality information for measuring healthcare service
quality, safety, and efficiency
Improved efficiencies and lower costs
Reduced coding errors
Greater achievement of the benefits of an electronic health
record
Recognition of advances in medicine and technology
Source:
HFMA
Benefits of ICD-10 (cont.)
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Alignment of the US with coding systems worldwide
Improved ability to track and respond to international public
health threats
Enhanced ability to meet HIPAA electronic transaction/code set
requirements
Increased value in the US investment in the SNOMED-CT
Space to accommodate future expansion
Source:
HFMA
Specificity looks like this…
One-to-Twenty-Four Mapping
ICD-9-CM
821.01
(Fracture, femur, shaft,
closed)
14
ICD-10-CM
S72.301A
S72.301G
S72.302A
S72.302G
S72.309A
S72.309G
S72.321A
S72.321G
S72.322A
S72.322G
S72.323A
S72.323G
S72.324A
S72.324G
S72.325A
S72.325G
S72.326A
S72.326G
S72.331A
S72.331G
S72.332A
S72.332G
S72.333A
S72.333G
S72.326A Nondisplaced
transverse fracture of shaft of
unspecified femur, initial
encounter for closed fracture
S72.326G Nondisplaced
transverse fracture of shaft of
unspecified femur, subsequent
encounter for closed fracture
with delayed healing
Key Areas of Impact
Source HIMSS Virtual Event 2011
15
How does ICD-10 affect your facility?
This coding change affects the entire Health System including revenue cycle, medical operations,
payers and other vendor contracts and a significant number of information systems
CLAIMS
SYSTEMS
PEOPLE
VENDORS
 Every claim
generated by each
facility will be
affected
 Numerous
information
systems will
require remediation
prior to go-live
 Thousands of staff
directly impacted by
change
 The majority of
payors in the nation
will be required to
convert to ICD-10
 Payer contracts will
require review
 Improved
documentation will
be required to
support coded
claims
16
 Includes core
billing systems
 Each system
change will require
testing and training
by IS and the endusers
 Clinical providers,
coding & revenue
cycle staff will
require in depth
training
 Staff will need to be
involved in
integrated testing of
system changes
 Payer systems will
require updates and
testing
 Other vendors are
also affected by the
change (i.e.
registries, clinical
outcomes data)
Impact of ICD-10 to Non-HIM Areas
Who Needs to Understand ICD-10?

Beyond coders…
PFS leadership as payers may reject based on ICD -10
coding and medical necessary codes
 PFS leadership and contracting to ensure contracts can
accept both ICD-9 and ICD-10 on the UBs post go live
 Utilization review and all care management as payers will
need to be able to do pre-certifications and concurrent
review with ICD-10
 Decision support and all areas using ICD-9/10 coding for
tracking, reporting, etc. (Trauma registry, outcome
comparisons, contracting, etc.).
 IT leadership must be involved to ensure all impacted areas
are ready
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Other Non-HIM Uses for ICD-9/ICD-10
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Reimbursement by payers
Medical necessity screening
Quality of care indicators
Outcome measurements
Medical care review
Method to index medical records
Storage and retrieval of dx data
Other Non-HIM Uses for ICD-9/ICD-10
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Utilization patterns and review by payers
Research data
Statistics
Reasons for Denials
Monitoring and analyzing the incidence of disease
and other health problems
Identify health care trends
Future health care needs
Patient Access Impacts
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Systems
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Workflow & Process
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Core Financial System
Eligibility Systems
Patient Liability Estimation Systems
Case Management Tracking
Pre-authorization
Admissions
Preauthorization (278) & Eligibility (270/271) transactions
ABNs
Denials Management
Policies, procedures and job descriptions that refer to ICD-9 functions
Patient Access Impacts

Training
PAS & Pre-Auth Professionals
 ICD-10-CM Basics
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Resources
Testing and training resources as needed to upgrade
affected systems according to IS plan
 Resources to participate in payor testing as necessary
 Pre-authorization backlog prevention plan
 Potential slow down with payor processes post go-live
 Evaluate and pursue educational seminars and resources
relevant to PAS; i.e., NAHAM, HFMA, HIMSS
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Patient Financial Services Impacts

Systems
 Coding/abstraction
software
 Core Financial Systems
 Bolt-on Financial Systems
 Billing Clearinghouse
 Denials Management Systems
 Payment Variance Software
 Patient Liability Estimation
 Reporting Databases
 Case Management Software
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Patient Financial Services Impacts
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Workflow & Process
 Integrated
testing & planning with payors
 Potential for slower and lower collections initially
 ICD code reports
 Changes in payor contracting language around ICD-10
compliance and how it impacts claims
 Denials Management
 Review & update policies, procedures, and job
descriptions as necessary
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Other clinical impacts
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Authorization & notification – services and conditions
that require prior/concurrent authorization or
notification on September 2014 will need to be
managed through transition
Utilization Management (UM) – services and conditions
that a health plan seeks to engage in UM activities will
need to be managed through and post transition
Post-Hospital Follow-Up Programs (i.e. CHF) – will need
to be identified for effective outreach and case
management through transition
Other clinical impacts
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Complex Case Management (CCM) – outpatient
conditions requiring concurrent case management
support need to be effectively identified and monitored
through transition to ICD-10
Disease Management (DM) – strategies for
identification and stratification for selection of DM
programs will need updated for ICD-10
HEDIS Reporting, STARS ratings and accreditation
documentation – these supporting data elements need
to be captured without gaps and effectively measure
historical trends
Hidden Costs of ICD-10 Transition
Financial Impacts
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Need to plan for decrease in productivity to prevent billing
backlogs during training and initial implementation
Other countries, including Canada, have reported an increased
number of days in coding turnaround in the immediate ICD-10
go-live period
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Based on actual data from a large urban community hospital in Toronto
Ontario Canada, staff productivity never rebounded to pre-ICD-10
levels for some patient types.
Financial Impacts
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New information demands to support the coding process could
result in potential increases in Accounts Receivable (AR) days,
increased rate of claim denials and lost/deferred revenue
AHIMA estimates that tertiary hospitals and hospitals with a
varied case load will have a greater lag time returning to
normal productivity than those hospitals whose case-mix range
is relatively small and well defined as the staff are introduced
to the wide variety of codes
Potential Hidden Costs
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Back log of uncoded claims with ICD-9 while trying to
get coders ready for ICD-10. Remote coding may need
to occur as well as OT.
Rejected claims from payers who are not ready to
accept UB-04 with ICD -10 PLUS ICD-9 as necessary.
Vendor software rejecting ICD-10 or edits not working
correctly thus slowing claim submission. Manual
intervention to ensure claims are submitted and
accepted.
New software if existing software for related ICD-10
work is not compatible.
More Hidden Costs
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Cost to conduct a ‘risk assessment’ to assess current
documentation patterns for providers and care
givers.
Cost to conduct training for providers and care
givers on enhanced documentation
Cost to review EMR or other software to adapt to
enhanced documentation requirements
Cost to conduct a ‘readiness assessment ‘ pre go live
to determine readiness of coders, documentation
and vendors.
More ….
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Loss of productivity – rebills, denials, rejections, EOB
work, medical necessity rejections/follow up
Loss of productivity – excessive physician queries, coder
slow down with new coding process
Growth in the discharged not final billed…
Potential impact to the Case Mix Index
Cost of implementing a clinical documentation
improvement program
Cost of EMR changes and training of all impacted staff
Cost of any changes to the functionality of the any
software and training costs
Preparing for the Transition
ICD-10 Goals: Organizing the Effort
GOALS
Seamless transition to ICD-10
(meet regulatory/payer requirements)
Support
physicians with
implementation
Provide thorough
education &
training
Maximize the benefits of ICD-10 transition
Enhance quality &
reimbursement
outcomes
Leverage
innovative
solutions/
technology
Coordinate
technology &
resource needs
IMPLEMENTATION APPROACH
Project Oversight
Benchmarking & Monitoring
•
Develop communication plans
•
Update and test systems
•
•
Develop direction, scope and outcomes
of work stream teams
•
Educate thoroughly; test and re-test
aptitude
Develop monitoring tools and
dashboards
•
Coordinate efforts & resources to
ensure appropriate project progression
•
Coordinate and team with payers
Determine benchmarks and post-live
goals
•
Revise policies, procedures &
workflows
•
Measure, measure, measure,
MANAGE
•
•
34
Remediation
Manage day-to-day activities and
challenges
Billing Cycle
Coded Data
HIM Coding
Coding
Issue
Resolved?
Bill Creation
and Editing
DRG Groupers
Coding
Specificity
?
Physician Query
Claims
Submission
Claims
Denial?
Bill Payment
Electronic Funds
Transfer
Physician
Documentation
Billing Loop
35
Coding
Loop
Payer readiness
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UB submissions with ICD-9 and ICD-10 - conversion
dates
Denials with new reasons –as ICD-10 is far more
specific
Contract language that addresses ICD-10
inclusions/exclusions
Claim scrubbers/payer scrubbers – ABN issues
(LCD/NDC dx codes/CMS), ‘if ‘ rules, edits
Pre-authorization process/coverage
Duality of Systems
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Will payers, vendors (claim submission and
scrubber) and other IT systems be able to handle
ICD-9-CM as well as ICD-10-CM and ICD-10-PCS
at the same time?
Rebills of pre-conversion, medical necessity
software, scrubbers, ensuring all payers are ready
to convert AND test with each payer = critical to
the successful conversion.
Don’t forget all payers (Medicaid, Worker’s Comp,
etc.)
Considerations for PFS
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Budget
Business Associates
• ICD-10 training specific to PFS staff
that falls outside of enterprise
offerings
• References, books and tools specific
to PFS for ICD-10
• Training time allocation for all
impacted staff receiving ICD-10
training
• Staff time allocation for relevant
system upgrades, i.e., testing
applications, training, etc.
• Estimate additional hours for PFS staff
for late 2014 and 2015 for the ICD10 transition due to negative
productivity
• Confirm the ICD-10 transition plan for
any affected third parties:
 Denials & Appeals agencies
 Eligibility software
 Worker’s Comp
 Outsourcing for follow-up functions
 Bad debt & early out functions
Considerations for PFS
Jobs & Competencies
Policies & Procedures
• Assess affected jobs and competencies
across the Department
• Review all existing policies and
procedures for department to
determine if any must be updated due
to ICD-10
• Evaluate and estimate impact to PFS
productivity/output for the initial
stages of the transition
 This area will be working in a 'hybrid'
environment of ICD-9/ICD-10 initially
• Revise impacted job descriptions to
incorporate ICD-10 skill set and
knowledge base
39
• Determine if any new policies and/or
procedures need to be created as a
result of the ICD-10 implementation
• Finalize all policies and procedures
related to ICD-10
Considerations for PFS
Reports & Data Extracts
• Confirm all active ICD code reports
for PFS
• Understand implications to reports
and data extracts for both internal
and external reporting as applicable
as a result of the ICD-10 transition
• Modify and test reports for the ICD10 world
• Consider capabilities when needing
to compare ICD-9 to ICD-10 state
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Systems, Applications &
Databases
• Solidify ICD-10 upgrade and
transition plan for all affected
systems, applications & databases:
 Core financial systems
 Interfaces
 Billing clearinghouse
 Reporting databases
 Eligibility software
 Case mix/DRG groupers
 Case management functions
 Patient liability estimation software
 Registries and external reporting
Considerations for PFS
Payors
• ICD-10 testing plans with payors
should be underway or commencing
shortly
• Develop payor report cards for
pre/post-transition to compare metrics
and performance
• Keep communication open during and
post-transition
• Potential errors!
 Payors (including Medicare/Medicaid) are
correcting medical policies (LCD/NCD, etc.)
which are diagnosis driven; this leaves
potential for errors and gaps that will need
worked out over time
41
Post Implementation Plan /
Evaluation
• Develop post implementation plan to
evaluate the following items:
 PFS staff adoption of ICD-10 education &
transition to determine if and where follow-up
training is needed
 Outcome of transition regarding system
changes and payor workflow
 Revenue & reimbursement impacts
 Denials rates
 Outcome of transition with Business Associates
 Budget impact
Performance Monitoring
Monthly
• Monitor revenue and
reimbursement metrics by
payor monthly
• Monitor case mix on a
monthly basis
• Perform reimbursement
service line reviews
monthly
42
Weekly
• Monitor physician
discharge performance
• Monitor physician
documentation weekly
• Monitor case mix weekly
• Monitor coder & biller
efficiency weekly
Daily
• Monitor financial metrics
(DNFB, A/R, Clean Claims
Rate, Final Billed Not
Submitted, Denials rates)
daily
• Set up dashboards with
drill-down capability to
service line and payor
Be prepared for…
43
Worst Case
Scenario
System Issues
• Create worst-case
scenarios for Revenue Cycle
impacts using forecasting to
determine cash reserves to
support revenue impacts for
at least 12 months
• Be prepared to have
dialogue with payors
regarding concerns over
claims adjudication, denials
rates, documentation
requests and billing
inquiries and claims
rejections
• No matter how thorough
testing, be prepared for
some health plans, external
vendors or internal systems
to be unable to accept ICD10 codes
• Be prepared to have
someone in the
organization “troubleshoot”
problems to determine
whether it is system,
interface, coding,
documentation or other
external issue
Non-System
Errors
• For the first 6 to 12 months,
expect significant amount
of human error related to
coding, documentation,
claims submission,
adjudication and denials
management
• It is likely that there will be
increased queries from
coders for documentation
and increased billing
inquiries from health plans
• Be prepared to assess
aptitudes and swiftly
retrain as needed
Driving Success Through Education
ICD-10 User Categories
Basic Users
Clinical Users
ICD Code Utilization
Aware of codes and use
them in some
application; only require
general understanding
More detailed
understanding of codes
and how they drive
reimbursement
Document to support
codes and may be
involved in their
selection
Involved in coding or
auditing services, or the
education and training
of such items
Example
Departments/ Roles
Patient Access,
Scheduling,
Registration, PFS, IS,
Senior Mgmt.
Data Analysts,
Research, IS (Clinical &
Revenue Cycle),
Quality, Mgmt.
MDs, Therapists,
CRNAs
Coders, CDI,
Registrars, Auditors,
PFS
Minimal
High-level
Detailed & targeted
Detailed coding & billing
training
Level of Training
Required
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Super Users
Planning for Education
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Documenters
Outline expected training and education requirements for each
user category and job code
Include training content, various teaching methodologies, and
estimated timeframes for education roll-out
Develop and roll out detailed training plan
Education Timeline
45
Questions & Discussion
Resources
AHIMA ICD-10-CM/PCS Resources
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48
ICD-10-CM/PCS Transition: Planning and Preparation
Checklist at
www.ahima.org/downloads/pdfs/resources/checklist.pdf
A Top 10 List: Phase I – ICD-10-CM/PCS Implementation at
www.ahima.org/icd10/preparing/aspx
Audio Seminars & Online Courses
http://www.ahima.org/ContinuingEd/
Communities of Practice http://cop.ahima.org/
Conferences & Events http://www.ahima.org/events/
ICD-10 Page www.ahima.org/icd10
Web Store www.ahimastore.org
Other Resources
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49
Making the Health System Work Better for
Everyone: The ICD-10 Collaboration Imperative;
OptumInsight
ICD-10 collaboratives best practices -- Published on
ICD10 Watch (http://www.icd10watch.com)
Provider-Payer Collaboration: Strategies to test
ICD-10 Provider and payer perspectives (AHIMA)
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Acceleration