The Business Impact of ICD-10 Jessica Williams, Greater Louisville Medical Society

Overview Coding is the currency of your business – preparation is essential Effective planning and education will guarantee a smooth transition

The 6 steps to ICD-10 implementation 1. Planning 2. Communication & Awareness 3. Assessment 4. Operational Implementation 5. Testing 6. Transition

Where to start?

The CMS ICD-10 Implementation Guide for Small and Medium Practices Free resource guide that includes step-by-step checklists and timelines to complete the ICD-10 transition

Step 1: Planning Ensure top leadership understands the significance of this transition Establish project management structure Establish decision-making authority Contact external vendors to determine their implementation plans and timeframes Create a well-defined timeline and create accountability

Step 2: Communication and Awareness It is critical that everyone in your organizations realizes what ICD-10 is, how it will affect the practice and staff members individually Start now and start slowly! Staff meetings Departmental s Simple and repetition are the keys

Awareness Education Training plan for all stakeholder groups should include: High-level introduction to ICD-10- CM/PCS Key differences between ICD-9 and ICD-10 Impact on documentation

Education for coding staff Perform detailed assessment of the current knowledge of your coding staff especially in Anatomy & Physiology Start with taking high volume codes and having coders code using the ICD-10 book Closer to the implementation date, intensive coding training will be required

Education for clinical staff Assess Quality of Medical Record Documentation Evaluate samples of various types of medical records to determine whether documentation supports level of detail found in ICD-10 Start with a focus on the codes with the greatest potential impact (e.g., high volume, high revenue, top service lines) Implement documentation improvement strategies where needed

Step 3: Assessment Collect information on current use of ICD-9 and a list of every staff member involved in the process Identify the range of impact a code change will have on staff members/departments Focus on high volume / high revenue codes first Evaluate the effect of ICD-10 on other planned or on-going projects (EHR adoption, Meaningful Use, PQRS)

Vendors, Payers and ICD-10 What are they doing? Believe it or not, vendors and payers are really working behind the scenes to insure smooth transition Organizations have to make sure there systems work with both ICD-9 and ICD-10 codes Vendors and payers biggest concern is that the physician practices will not be ready

Vendors- what to ask Will the application or replaced? Can we see a demo? What is the timeline for go-live? Will there be a new service level agreement? Will we have to sign a new contract? What, if any new fees will be assessed? Make a spreadsheet of your vendors to keep track of their answers

Payers- What to ask When will testing begin? How will the referral / authorization process change? Will contracts change? How will medical policies be affected? What maps / crosswalks will be used to convert ICD-9 to ICD-10?

Budget Planning – Budget neutrality does not exist Create a multi-year ICD-10 implementation budget Consider: System, software, hardware and maintenance fee upgrades Communication Training Outsourcing / consultant fees Temporary staffing needs Data conversion Report design and reprinting paper forms Systems testing

Budget Planning Hardware / Software Vendor contractual fees (software upgrades) New templates and pick lists in EHR systems Testing applications some software changes might require hardware changes Communication New forms that will need to be created Internal communications External communications with vendors Tracking mechanism

Budget Planning Cont’d Training Assume at least 20 hours of initial, additional education per coder Ask staff members who need education on how best they learn and calculate costs based on their input Online courses On-site education Test environments

Budget Planning Cont’d After implementation budgeting: Monitoring for code compliance Additional, ongoing education Staff time to analyze / monitor revenue stream after implementation

Loss of Revenue / Productivity ICD-10 Implementation will result in an initial loss of revenue Chart coding takes longer, slowing productivity Slower claim adjudication and higher claim rejections should be expected

How to prepare for ICD-10 cash flow delays Examine payment schedules with vendors and ask to pre-pay if possible Focus on cleaning up your AR and make sure you are managing your charge-offs and denials Make sure to collect all co-pays and deductibles at time of service Speak to your bank about increasing your credit line now, ahead of the transition date

Step 4: Implementation Phase Once you have completed the assessment of your practice’s ICD-10 transition needs and planned for the tasks required to complete this transition, the next step is to determine what changes you need to make to your operations and systems in order to limit business risks and take advantage of opportunities. Most physician practices depend on their vendors to provide support for the ICD-10 transition. However, you should not assume that your vendors would address the effects of the ICD-10 implementation on key functional areas, including: Patient registration Clinical documentation/health records Referrals and authorization Coding Order entry Billing Reporting and analysis Other diagnosis-related functions, depending on the nature of the practice

Implementation Activities The operational implementation phase of the ICD-10 transition process includes the following key activities: Determine if/how your practice will work with vendors for implementation Coordinate with vendor the update of the internal policies affected by ICD-10 Coordinate with vendor the update of internal processes affected by ICD-10, including clinical, financial, actuarial, and reporting functions Finalize system/technical requirements Identify test data requirements as outlined in the Scenario Based Vendor Assessment section Update approved code design to remediate system changes and updates Coordinate update of code with vendor to remediate system changes/updates Coordinate and conduct testing with partners based on updated system logic

Step 5: Testing Testing—the process of proving that a system or process meets requirements and produces consistent and correct results—is critical to successful implementation of ICD-10. Testing will ensure ICD-10 compliance across internal policies, processes, and systems, as well as external trading partners and vendors. After making ICD-10 changes to systems, your practice will need to complete several types of tests. First, you may decide to complete individual component unit testing, system testing, and performance testing. Many of these tests will be similar to ones performed for other IT changes. Second, you will need to complete specific ICD-10 end-to- end testing as described in the ICD-10 Final Rule.

ICD-10 Testing TypesDescriptionKey ICD-10 Considerations Unit testing/basic component testing Confirms that updates meet the requirements of each individual component in a system. Providers will first need to test each component updated for ICD-10. Unit testing should verify that: Expanded data structures can store the longer ICD-10 codes and their qualifiers Edits and business rules based on ICD-9CM codes work correctly with ICD-10 Since reports frequently use diagnosis and procedure codes, testing report updates are critical. Critical report elements to evaluate include: Input filters: Do all filters produce the anticipated outcome? Categorization: Do categories represent the user’s intent as defined by aggregations of codes? Calculations: Do all calculations balance and result in the anticipated values considering the filter applied and the definition of categories? Consistency: Do similar concepts across reports or analytic models remain consistent given a new definition of code aggregations? System testingVerifies that an integrated system meets requirements for the ICD-10 transition. After completing unit testing, providers will need to integrate related components and ensure that ICD-10 functionality produces the desired results. Plan to test ICD-based business rules and edits that are shared between multiple system components Identify, update, and test all system interfaces that include ICD codes Regression testingFocuses on identifying potential unintended consequences of ICD-10 changes. Test modified system components to ensure that ICD-10 changes do not cause faults in other system functionality. The complexity of ICD-9-CM to ICD-10 code translation may result in unintended consequences to business processes. Identify these unintended consequences through varied testing scenarios that anticipate risk areas.

Nonfunctional testing – performance Performance testing includes an evaluation 4of nonfunctional requirements such as transaction throughput, system capacity, processing rate, and similar requirements. A number of changes related to ICD-10 may result in significant impact on system performance, including increased: Number of available diagnosis and procedure codes Number of codes submitted per claim Complexity of rules logic Volume of re-submission due to rejected claims, at least initially Storage capacity requirements Nonfunctional testing – privacy/ security Federal and state legislation defines specific requirements for data handling related to 5 conditions associated with mental illness, substance abuse, and other privacy-sensitive conditions. To identify these sensitive data components or conditions, payers often use ICD-9-CM codes. Update the definition of these sensitive components or conditions based on ICD10-CM Internal testing (Level I)The ICD-10 Final Rule requires Level I compliance testing. Level I compliance indicates that entities covered by HIPAA can create and receive compliant transactions. Transactions should maintain the integrity of content as they move through systems and processes Transformations, translations, or other changes in data can be tracked and audited external testing (Level II)The ICD-10 Final Rule requires Level II compliance testing. Level II compliance indicates that a covered entity has completed comprehensive testing with each of its external trading partners and is prepared to move into production mode with the new versions of the standards by the end of that period. Establish trading partners testing portals Define and communicate transaction specification changes Determine the need for inbound and outbound transaction training Determine the need for a certification process for inbound transactions Determine the process for rejections and re- submissions related to invalid codes at the transaction level Determine if parallel testing systems need to be created to test external transactions

External Testing Your practice should create an inventory of external entities with whom you exchange data and the testing you will need to coordinate with each to ensure timely, accurate ICD-10 implementation. Examples of external testing areas include:

Testing with the Payers Payers are critical to the financial viability of your practice. Denials or payment delays may result in a substantial decline in revenues or cash flow. Payers may struggle with the ICD-10 transition due to the significant system changes needed to support policies, benefit/coverage rules, risk analysis, operations, and other critical business functions impacted by this change. Payer testing should identify and resolve any issues prior to go-live. Determine if the payer has educational programs and collaboration efforts to support providers through the transition Use the high-dollar, high-volume, high-risk scenarios that your practice has created to produce test claims Work with payers to develop test scenarios to conduct end-to-end testing, specifically identifying payment results Communicate coding practices and scenarios to payers to build better relationships throughout the testing and transition process Identify a key contact person at the payers to resolve any issues

Hospitals: Test information exchanges with hospitals to ensure appropriate handling. Health information exchanges: Test all information exchanges for critical operations to meet inoperability standards. Outsourced billing or coding: Test outsourced coding and billing operations with defined clinical scenarios to make sure these business operations continue as expected. Government entities: Local and national government entities may require reporting for a variety of purposes including: Public health reporting Quality and other metric reporting related to meaningful use Medicare and Medicaid reporting and data exchange Other mandated or contractually required exchange of information around services and patient conditions

Step 6: Transition Phase During the transition period, monitor the impact of ICD-10 on your business operations and revenue. Practices should be prepared to take corrective action. After “go-live” everything will rum smoothly….right? Wrong! Ensure codes are being reimbursed properly Random chart audits to ensure coding accuracy

Timeline Create a timeframe to start and begin projects Hold staff members accountable and reward for completion of activities

Don’t start from scratch Numerous resources are available to use, you don’t have to re-create the wheel Work together with similar practices to discuss training strategies, vendor status checks and cost-saving measures

Thank you If you have any questions, please feel free to contact me at