When any business is involved with a major system conversion, at risk is the potential disruption to cash flow, resulting in a negative impact to the bottom line. With the current ICD-10 implementation deadline of October 1, 2014 quickly approaching, medical organizations need to be well prepared to handle the financial risks associated with this initiative. In order for medical organizations to effectively mitigate the risks involved with ICD-10 implementation, it is imperative for them to include a thorough review of potential cash flow risks as part of their overall ICD-10 planning.
A component of a sound holistic risk mitigation strategy includes providers understanding their current revenue stream and be able to forecast possible changes to cash flow before, during, and post ICD-10 implementation. Medical organizations who proactively engage in advanced planning to protect revenue loss will also experience the unique opportunity to evaluate and improve their overall business operations, maximize operational efficiency, enhance their revenue stream, and control costs on a global scale.
While it is expected that reimbursements will initially decline with ICD-10 conversion, providers should now be engaged in aggressively taking advantage of the time remaining to diagnose and put in place a risk mitigation plan that will address any cash flow fluctuations from moving to ICD-10. To help medical organizations and providers prepare to make the transition to ICD-10, consider the following nine best practice action items when preparing a risk mitigation plan:
1. Explore and determine budgeting avenues for additional cash reserves if material delays in payment occur resulting from the transition to ICD-10.
2. Perform a comprehensive review of all managed care contracts to potentially negotiate protective language relevant to reimbursement in the event payment shifts occur that could have a negative impact to cash flow and subsequently the bottom line.
3. Conduct a series of financial modeling to better understand the financial implications of moving from ICD-9 to ICD-10 and forecast the revenue impact by provider or facility, line of business, and geography.
4. Proactively engage with high-volume payers to assess their readiness level to process claims in the ICD-10 compliant format.
5. Develop a strategic plan for the coding, billing and claim backlogs processes to minimize disruptions and maximize cash flow.
6. Conduct clinical documentation improvement reviews with all stakeholders using the ICD-10 code set.
7. Develop a strategy and process for managing claim denials pre and post ICD-10 implementation.
8. Review audits currently occurring that may be impacted in the future by compliant use of the ICD-10 code set.
9. Perform ICD-10 readiness level assessments of all external vendors who support the coding, billing, follow up, and denials functions.
As the United States moves closer towards the deadline for this important classification conversion, top priority for both payers and providers should be on what IT systems will require retooling, what workflows will require reengineering, and budgeting for any infrastructure investments. Medical organizations and providers who proactively develop strategic and risk mitigation plans will be best positioned to experience a smooth transition to ICD-10.
Frank J.Rosello is CEO & Co-Founder of Environmental Intelligence LLC.
Environmental Intelligence LLC is a Complete Outsourced Health IT Company providing End-to-End meaningful physician workflows consulting, integration, and implementation in (EHR) Electronic Health Records, Image Management Systems and Practice Management to private and public medical practices and facilities differentiated by our experienced, physician driven administrative staff and dedicated Health IT professionals.
To learn more about our Physician Focused – Patient Driven approach to EHR & Health IT Visit our website: http://www.goeillc.com
