ICD-10 IMPLEMENTATION – ARE YOU WHERE YOU NEED TO BE? Maureen Doherty, CPC, CPC-H EisnerAmper Healthcare Services Group June 2012

Overview of Topics ICD-10 Definition Who Is Affected? ICD-9 CM Volume 3 vs. ICD-10 PCS Implementation Phases Cost Impact Are You Where You Need To Be? 2

ICD-10 Definition ICD-10 –The International Classification of Disease tenth revision (ICD-10) is a system of coding created by the World Health Organization that notes various medical records including diseases, symptoms, abnormal findings and external causes of injury. –Created in 1992 as the successor to previous ICD-9 system –United States ICD-10 System to begin October 1, 2014 ICD-10-CM – Clinical Modification – Outpatient Diagnostic Coding ICD-10-PCS – Inpatient Hospital Procedure Coding 3

ICD-10 – Who Is Affected? –Clinicians Documentation improvement to capture specificity of ICD-10 –Ancillary Departments Documentation to capture specificity of ICD-10 –Health Information Management (HIM) ICD-10 CM and PCS structure and coding guidelines –Patient Registration Documentation Impact on Medical Necessity and Present on Admission (POA) 4

ICD-10 – Who Is Affected? –Patient Financial Services Impact on grouping and payment Denials Management –Utilization Management Documentation to capture specificity of ICD-10 Impact on reporting and databases –Managed Care Contracting –Compliance Staff ICD-10 CM and PCS structure and coding guidelines Proper documentation 5

ICD-10 – Who Is Affected? –Information Technology Interface and internal systems impact –Quality Management Impact on reporting, databases and cost accounting –Accounting and Finance Impact on reporting, cost accounting, grouping and payment 6

ICD-9-CM VOLUME 3 vs. ICD-10-PCS ICD-9-CM Volume 3 –4,000 Procedure Codes –3 to 4 Digit Codes –Numeric Codes with Decimal Point –Includes some diagnosis information ICD-10- PCS –72,000 Procedure Codes –7 Digit Codes –Alphanumeric Codes with No Decimal Point –No diagnosis information 7

Overall Implementation Process Plan Development / Impact Assessment Implementation “Go Live” Post-Implementation 8

Implementation-Phase I Implementation – Phase I – Key Players –Senior Executives –HIM Management Team –Coding Staff –Medical Staff –Financial Management (Accounting/Billing) –IT Personnel –Clinical Department Managers –Quality Management, Utilization Management, Case Management –Business Associates System Vendors, Providers, Payers 9

Implementation-Phase I Implementation – Phase I –Identify business impact areas Educational session with key stakeholders Create steering committee and assign project manager –Utilize internal and/or outsourced resources –Establish Implementation Timeline Conduct the following assessments: –Onsite impact assessment of all business impact areas »Identify all impacted people, processes and systems »System remediation and/or replacement »Education and training needs »Budgetary needs 10

Implementation-Phase I –Conduct the following assessments: IT Assessment –Product upgrade timelines –Hardware impact –Testing timelines –Costs associated with system remediation/replacement efforts –ICD-9-CM to ICD-10/ICD-10 to ICD-9-CM translation methodology –Inventory of Reports and Interfaces »Confirm number of reports and interfaces »Determine continued need/efficiencies that can be realized »Remediation effort 11

Implementation-Phase I –Conduct the following assessments: ICD-10 reimbursement and coding/documentation impact analysis –What is the magnitude of the impact ICD-10 will have on your revenue »DRG weights »Conditions/services at high risk »Able to generate additional revenue from implementation –MS-DRG assignments based on ICD-10 denominated MS- DRG v28 R1 grouper »CMS releasing MS-DRG v29 grouper for ICD-10 »Spring 2012 –Deficiencies in coding/documentation for ICD-9 –Education/training and Documentation Improvement 12

Implementation-Phase I –Clinical Data Quality Assessment Inpatient Data Quality Assessment –Coding/MS-DRG assignment –Code validation –Present on Admission (POA) status/discharge –Review of ICD-9-CM documentation »Clinical data – time of admission »Attending physician – plan of care »Patient’s course of care »Physician orders, labs, radiology, consultations »Discharge summary 13

Implementation-Phase I –Clinical Data Quality Assessment, continued Electronic Health Record (EHR) Review –ED documentation –Physician documentation »Encounter »H & P »Procedure/Operative Reports »Pathology, Lab, Imaging Reports »Nursing flow sheets, wound care, respiratory, PT/OT, etc. Encounter Forms –Technical and professional –Diagnosis codes 14

Implementation-Phase I –Clinical Data Quality Assessment, continued Clinical data quality assessment Risk assessment Vendor and Payer readiness assessments –Timetables –Impact to current contracts –Develop ICD-10 education and training approach ICD-10 workflow to readiness 15

Implementation-Phase I –Create Budget Software Modifications Software/Hardware Upgrades Staff Training/Materials Testing-Related Costs Temporary/Contract Staffing Consulting Services Development of New Reports Data Conversion 16

Implementation-Phase 2 Implementation – Phase 2– Key Players –HIM Management Team –Coding Staff –Medical Staff –IT Personnel –Quality Management, Utilization Management, Case Management –Business Associates 17

Implementation-Phase 2 –Project Governance –Implement education and training program Staff and providers Policies and Procedures Software Upgrades ICD-10 CM –Anatomy & Physiology –Specificity Requirements –Implement clinical documentation improvement program –Technical resources 18

Implementation-Phase 2 –Testing, design and management Implement systems changes Internal/External Testing –Operational and systematic workflow –ICD-9-CM to ICD-10/ICD-10 to ICD-9-CM mapping and translation 19

Implementation-Phase 3 Implementation – Phase 3– Key Players –HIM Management Team –Coding Staff –Medical Staff –IT Personnel –Financial Management –Business Associates 20

Implementation – Phase 3 Implementation - Phase 3 – “Go Live” –System Vendors Changes & Upgrades Are Completed –Complete Internal Testing –ICD-10 Transaction Testing –Review/Test Contingency Plan for Continuing Operations –Coding Staff Training Six months prior to “Go Live” –Documentation Assessments 21

Implementation-Phase 4 Implementation – Phase 4– Key Players –HIM Management Team –Coding Staff –Medical Staff –IT Personnel –Financial Management –Business Associates 22

Implementation – Phase 4 Implementation - Phase 4 – Post Implementation Monitoring and Improvement –End-state measurement and documentation –Implement review and improve process Denials Coding/Documentation Accuracy –Update compliance program 23

Cost Impact ICD-10 Budget Costs –Large hospitals $2 - $5 Million –Large Systems Up to $20 Million Reimbursement Issues –Coding Backlogs –Changes in DRG Weights –Changes in Case Mix Index –Changes in Reimbursement Schedules –Changes in Payment Policies –Delayed Payment and Claims Adjudication 24

Are You Where You Need To Be? Phase I – Plan Development/Impact Assessment –First Quarter 2010 – Second Quarter 2012 Phase 2 – Implementation –First Quarter 2012 – Second Quarter 2014 Phase 3 – “Go Live” –First Quarter 2014 – Third Quarter 2014 Phase 4 – Post Implementation –Fourth Quarter 2014 – Fourth Quarter

Contact Information –Contact Information Maureen Doherty, CPC, CPC-H EisnerAmper, LLP, Manager, Healthcare Services Group CEU CODE 26190PHDBB 26

EisnerAmper LLP is an independent member firm of PKF International Limited