In the past six months, hospitals have considerably increased their internal training efforts in preparation for the transition to ICD-10, according to a survey conducted by the consulting firm Health Revenue Assurance Associates.
The transition from the ICD-9 code sets used to report medical diagnoses and inpatient procedures to ICD-10 is required for everyone covered by HIPAA starting Oct. 1, 2014. The HRAA survey — a follow-up to industry research HRAA conducted in April — found 78 percent of hospitals have begun ICD-10-CM training and 64 percent have started ICD-10-PCS training for their coding staff, up from 60 percent and 45 percent, respectively, in April.
However, although 71 percent of hospitals plan to submit ICD-10 coded claims to payers before Oct. 1, 85 percent said they don’t know if their payers plan to map claims using CMS reimbursement maps to group the claims to diagnosis-related groups.
A lack of communication and preparation between payers and providers before ICD-10 hits could lead to piles of denied claims and delayed reimbursements, says Dean Boyer, chief technology officer of HRAA.
“If [hospitals] don’t have their major payers lined up and the payers don’t understand how the hospitals are going to code using ICD-10, that becomes a recipe for miscommunication,” he says.
There’s no requirement saying hospitals and payers need to meet and work out how they will communicate using the new ICD-10 language, but he says it’s an important step in the preparation process nevertheless.
“This is not just a coding change,” he says. “We’re actually changing some of the ways in which we want to look at healthcare. From an actuarial perspective, on the payer side, this could have tremendous impact on how they manage their plans. This could change the way hospitals are reimbursed for the services they provide.”
Recognizing the risks of not discussing ICD-10 with payers, some providers are trying to get a leg up on the preparation process. “The potential challenge is the payers have limited resources, and I think the ability for every facility to test with every payer isn’t going to materialize,” says Chris Pass, senior vice president of revenue cycle at Walnut Creek, Calif.-based John Muir Health. “You need to get on the schedule early.”
Examine the hospital claims portfolio
When it comes to payer preparation, Mr. Boyer says hospital and health system executives should first focus on understanding what their portfolio of claims look like. For example, a hospital may realize it has one payer that deals with most of the claims concerning coronary disease.
“I would look at where my biggest financial impact is, and I would reach out to those payers very quickly,” he says. “Have them go through, adjudicate and tell you what they’re going to reimburse. Is it the same revenue you were getting with ICD-9?”
Figure out an approach for payer preparation
Once a hospital or health system identifies its key payers, it should start communicating with them about ICD-10 testing and work toward a revenue neutral exchange. “Payers are going to want to be open to that,” Mr. Boyer says. “If you’re the one handling the majority of their customers, they’re going to want to make sure they’re not denying claims unnecessarily.”
