ICD-10 Where Do We Go From Here? The Anticipated Impact on Reimbursement February 24, 2015
Introductions Cortnie R. Simmons, MHA, RHIA, CDIP, CCS Managing Director of Education Services Brad Justus, Strategic Account Executive, tweet @brad_justus #ICD10 2
Before everything else, getting ready is the secret of success. Henry Ford 3
Objective Discuss and provide insight into the new ICD-10 System Review strategies and tactics to best prepare Discuss impact on coding and reimbursement Address questions and concerns for ICD-10 Statement of Confidentiality This webinar contains proprietary information and is the property of himagine solutions, Inc. ( himagine solutions ). ICD-10-CM Official Guidelines for Coding and Reporting 2014 4
The Delay ICD-10 will not be adopted on October 1, 2014 ICD-10 will be adopted no sooner than October 1, 2015 CMS estimates that the one year delay of ICD 10 would cost between $1 billion and $6.6 billion 5
The Delay: Pros vs. Cons Pros Cons Improve ICD-10 coding skills Cost/Re do Cost Improve Physician documentation Loss of momentum Time for report and process modification Skepticism Time to work with trading partners 6
ICD-10 THE NEW SYSTEM!!!!! 7
What is ICD-10? A new diagnostic coding system intended to improve coding by increasing the level of specificity in diagnostic codes ICD-10 will enhance the efficiency of clinical data collection, improve treatment outcomes measurement as well as the quality of administrative data 8
ICD-10 Adoption Worldwide 9
ICD-10 CM The most significant difference between ICD 9 and ICD 10 is the size and composition of the new codes ICD 9 is five digits where ICD 10 is 7 alphanumeric characters Re-structured classification Specificity and detail have been expanded ICD 10 better describes acuity, complexity and laterality of the patients under your care 10
ICD-10 PCS ICD-10 procedure codes will require additional and significant detail in surgical reporting Key ICD 10 characteristics ICD -10 is a dramatic departure from current practice Surgical codes lack decimals The new code set will allow for incorporation of new procedures and technologies Terminology is precisely defined and used consistently across all codes 11
What Do We Know!? More Details More Specific More Codes Increased Documentation Needs for ICD-10 12
Key changes Documentation will need to support the higher level of specificity found in ICD 10 to include: Laterality Stages of healing Trimesters in pregnancy Episode of care (ex. initial, subsequent) Paper superbills will need to updated to ICD 10 or converted to an electronic format Prescriptions that have re-fills, that will cross the cutover date, may require additional information or intervention from the provider Did you know that auto insurance and worker s compensation claims aren t required to move to ICD 10? 13
Key changes Services that will cross the cutover date, may also require additional information or intervention Medical necessity and pre-authorization for services on or after October 1, 2014 will require ICD 10 codes QUESTIONS!!!!! What forms or cheat sheets do you utilize that contain ICD codes? What technology updates will be required to become ICD 10 compliant? Outpatient and physician office coding will continue to utilize ICD for diagnoses and CPT for procedures 14
ICD-10-CM Code Structure Alpha (Except U) 2-7 Numeric or Alpha Additional Characters. AMS X X0 X2. X6 X5 X AX Category Etiology, anatomic site, severity Added code extensions (7 th character) for obstetrics, injuries, and external causes of injury 3 7 Characters ICD-10-CM Official Guidelines for Coding and Reporting 2014 15
Specificity looks like this S72301A Unspecified fracture of shaft of right femur, initial encounter for closed fracture S72301G Unspecified fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing ICD-10-CM S72322A Displaced transverse fracture of shaft of left femur, initial encounter for closed fracture S72322G Displaced transverse fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72326A Nondisplaced transverse fracture of shaft of unspecified femur, initial encounter for closed fracture S72326G Nondisplaced transverse fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing ICD-9-CM 821.01 Fracture of femur, shaft, closed S72302A Unspecified fracture of shaft of left femur, initial encounter for closed fracture S72302G Unspecified fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72309A Unspecified fracture of shaft of unspecified femur, initial encounter for closed fracture S72309G Unspecified fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing S72321A Displaced transverse fracture of shaft of right femur, initial encounter for closed fracture S72321G Displaced transverse fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72323A Displaced transverse fracture of shaft of unspecified femur, initial encounter for closed fracture S72323G Displaced transverse fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing S72324A Nondisplaced transverse fracture of shaft of right femur, initial encounter for closed fracture S72324G Nondisplaced transverse fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72325A Nondisplaced transverse fracture of shaft of left femur, initial encounter for closed fracture S72325G Nondisplaced transverse fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72331A Displaced oblique fracture of shaft of right femur, initial encounter for closed fracture S72331G Displaced oblique fracture of shaft of right femur, subsequent encounter for closed fracture with delayed healing S72332A Displaced oblique fracture of shaft of left femur, initial encounter for closed fracture S72332G Displaced oblique fracture of shaft of left femur, subsequent encounter for closed fracture with delayed healing S72333A Displaced oblique fracture of shaft of unspecified femur, initial encounter for closed fracture S72333G Displaced oblique fracture of shaft of unspecified femur, subsequent encounter for closed fracture with delayed healing Many possible codes 16
Areas of Impact: Everywhere! Disease Management Financials Reimbursement Reporting Health Policy Test Ordering Billing Quality Measures Registries Pharmacy Research & Studies Identifying Fraudulent Practices Clinical Decision Making Scheduling Payment Systems & claims Processing Physician Documentation Encoding Software Registration Case Management Coding 17
Who Does ICD-10 Impact? The impact of the transition to ICD-10 is far reaching Physicians Hospitals Health Plans & HMO s - Electronic Health Records - Practice Management Systems - Billing - Accounts Receivable - Productivity Loss - Patient Access (Inpatient Ambulatory and Clinics) - Lab/Radiology - Other Ancillary services - Pharmacy - Physician Order Entry - Image Management - Supply Chain Mgmt - HIM/Utilization Review - Bar Coding - Billing - Claims - Fraud and Abuse - Customer Service - Reimbursement - EOBs/ EOCs - Network Contract - Actuarial - Rating - Underwriting - Membership - Utilization Review - Benefits - Contracts - EDI - OCR - ERA / EFT - Reporting - Data Warehousing Federal Government Programs - Medicare - Medicaid - Plus Health Plans functions minus Network and Rating - Data Warehousing for statistical reporting Specialty Providers Supplemental Health Industry Organizations Major State Government Programs Health Care Tools & Decision Support - Veteran s Hospitals - Federal Hospitals - Nursing Homes - Home Health Providers - DME Providers - Hospice - Mental Health Providers - Substance Abuse Providers - Physical Therapy Providers - Drug Manufacturers - Supply Chain Companies - Third Party Administrators - Workers Comp - Auto Liability - Self Admin Employers - Clearinghouses - Programs that address health needs of the poor and uninsured - University Medical Centers - Children s Health Programs - Student Health Programs - Department of Corrections - County and Rural Health Programs - State Public Health Agencies - State Funded Medical Schools - State Employee Health Programs - Predictive Modeling - Health Coaching - Personal Financial Tools, e.g. FSA, MSA - Federal, State and local authority collection of diagnosis data from Clinical provider for epidemic and new disease analysis 18
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ICD-10 Prepare by PLANNING 20
Questions for You!!!!! Have you budgeted for the ICD-10 transition? If you don't have a budget are you behind? Have you determined your risks? Have you conducted any training? himagine 2015 21
ICD-10 Transition Risks 22
Do You Have a ICD-10 Preparation Checklist? Create a education plan for all stakeholders Start and complete Education and Training activities Complete plans for parallel/dual coding Complete staffing analysis/time Study Determine need for additional resources Conduct education and training validation activities 23 23
Do you Need a Budget? A budget is always important Complete after key decisions/planning May also require some assumptions Assumptions to consider: How many and what resources will participate? When will they participate? How Long? How much time is required? What reviews are needed? Who will do them? How much time will they take? 24
Training Considerations HOW? In-house programs Vendors AHIMA approved trainers WHO? Coders Billing/compliance Physicians Data users WHEN? Now Prior to Dual Coding WHAT? Diagnosis coding Procedure coding Documentatio n changes 25 25
ICD-10 Education and Training Create a education plan(s) for your organization Education will be extremely important Allow ample time to conduct and validate education 26
Engage and Retain 27
Potential Impact to Coding and Reimbursement 28
How Does ICD-10 Impact Reimbursement? Here is what we know today: The ICD-10 version of MS-DRGs posted on the CMS website replicates the ICD-9 version of the MS-DRGs. (subject to change between now and 2013) The posted version of ICD-10 of MS-DRGs is unlikely to cause a significant redistribution of payments across hospitals Once sufficient data code in ICD-10-CM/PCS becomes available, CMS will likely use the increased specificity of ICD-10-CM/PCS to enhance the MS- DRGs If hospitals are losing money in current MS-DRG s with ICD-9-CM coding and the lack of higher specificity/documentation, then they will continue to lose money under ICD-10-CM/PCS 29
Future of ICD-10 This transition is NOT just for reimbursement for hospitals The data collection taking place over the next 2 years -- as well as 2 years following implementation -- will feed initiatives impacting: Measurement of patient care outcomes Quality of care initiatives Healthcare policy development Research related to profiling providers of healthcare Pay for performance initiatives Justifying medical necessity 30 30
Code Mapping & I-10 Implementation Mappings will be used to convert and test systems link data in long-term clinical studies develop application-specific mappings analyze data collected during transition period and beyond 31
Code Mapping is... an attempt to translate equivalent meaning from source to target one source system code linked to one or more target system codes if the differences were not significant, no incentive to change 32
ICD-10-CM General Equivalence Mappings Presents all reasonable correspondences between the two code sets Consists of two general equivalence mappings (GEMs) ICD-9-CM to ICD-10-CM ICD-10-CM to ICD-9-CM Each file contains code pairs one code from each set Source or target system code may be used more than once Additional information specified using flags 33
DRG-Based Net Revenue Analysis For the first half of FY2012, total net revenue was $665M of which $320M (48%) came from inpatient services with $288M (90%) of inpatient billing tied to DRG-based reimbursement; MHS will need to discuss with payors who have been reimbursing by DRGs to determine mapping strategies and potential impact to case mix Payor Payor Mix for Inpatient Services Net Inpatient Revenue (FY12 Q1 & Q2) DRG-Based Net Inpatient Revenue* Percentage of Total DRG-Based Net Inpatient Revenue Medicare $63,421,708 $63,421,708 19.8% Regence $40,924,256 $40,924,256 12.8% First Choice $44,705,443 $38,893,735 12.2% Medicaid $33,902,674 $33,902,674 10.6% Premera $32,043,295 $32,043,295 10.0% Molina - HO $18,618,157 $18,618,157 5.8% Other Government $33,647,265 $26,452,973 11.7% Other Commercial $49,341,082 $34,031,419 17.1% Total $319,516,667 $288,288,218 100% * Assumes consistent proportion of inpatient revenue between TGAH/GSH (87%) and MBCH (13%) based on split of total revenue for FY12 Q1 and Q2. Key Findings 43% of MHS total net patient revenue is tied to DRG-based reimbursement and exposed to increased risk during the transition from ICD-9 to ICD-10 Although outpatient reimbursements are not always tied to DRGs, outpatient net revenue may be impacted if payors plan to change their approaches to benefit neutrality and medical policies with the transition to ICD-10 There will be no equivalent to AP-DRG upon completion of the transition to ICD-10; MHS should work with AP-DRGbased payors to determine the post golive transition approach MHS should continue to proactively collaborate with payors regarding their individual use of diagnosis crossmapping tables prior to the ICD-10 transition 34
Percentage of Claims Impacted (%) 3M Key Findings - Percentage of Claims Impacted by ICD-10 Translation 100 90 80 97 96 90 81 88 78 70 65 69 60 50 40 30 20 10 7 6 5 7 0 Orthopedics Pulmonary Surgery Cardiology Clinical Specialty TG Hospital Good Sam Impact on Total Claims Key Observation: These four specialties account for a significant proportion (25%) of total impacted claims at Tacoma General and Good Samaritan Hospitals 35
What are the benefits of Dual Coding/Mapping? Provides data analytics/reporting Provide risk mitigation for: Financial Productivity Operations Provides practice Provides the ability to educate 36 36
What Does This Mean To You? 37
Questions for You!!!!! Do you participate in clinical trials? Have you looked at your current ICD-9 codes? Have you performed any mapping? himagine 2015 38
Drug Manufacturers Drug manufacturers may be behind the curve in planning for ICD-10 Recommendation that pharmaceutical companies address the need for indication language that can match up with appropriate codes in ICD-10 Coding and payment processes will suffer if existing product labels are unable to be matched with the more specific codes in ICD-10 39
New Code Identification If you get codes on orders from doctors. you will need to know that they are getting the right codes and documentation from referring physicians For Example: ICD-10 CM diagnosis specificity, especially for Orthopedic and Cardiology is significantly different 40
Potential Benefits Reduction of payment errors to providers for pharmaceutical and medical device products used in medical procedures Increased competitive advantage through the creation of comparative effectiveness analytics programs Improved understanding of payer strategies More profitable pricing strategies as a result of data mining more accurate information Access to population health data to guide future R&D efforts focused on either high volume low dollar or high dollar low value diagnosis groups 41
Things to Think About! Manufacturers with drugs in clinical trials will need to update protocols and ensure continuity of diagnosis coding in longitudinal studies across the switch ICD-9 to ICD-10 transition could impact product sales. Due to the increased specificity and number of codes used in ICD-10, coding diagnoses for claims may become more time consuming for providers, slowing the submission process Providers may initially code claims improperly, and payers may get backlogged dealing with incorrect claims. This could result in delayed reimbursement Together these factors could slow products sales after October 1 st 2015, as providers and payers experience increased workload and delayed reimbursement. 42
What s Next? 43
ICD-10: How Many Days Left? 44 44
Don t Stop Now! Addresses organizations weaknesses in preparation for ICD-10 Continue recruitment and retention initiatives Continue documentation improvement efforts and education Automate Processes Get rid of reports that are not being used Facilitate documentation capture from all credible sources 45
All the Right Reasons Reported data is studied & trended Benchmark and assist in improving quality of patient care Improve clinical protocols Develop evidence-based medical practices Provide risk adjustment/severity of illness stratifications Current reimbursement Basis for developing future CMS reimbursement programs 46
In Summary Planning is very important to success! Who? Who is involved? What? What do you want to accomplish? What do you need? Staff bodies (doers, managers and supporters) Resources (systems, materials, support) Currency (because it all costs SOMETHING, be it time or money) When? When do you want to get there? How? How do we accomplish it? 47 47
Remember! Review any ICD-9 codes that are currently being provided Review any clinical trials Determine any educational needs Decide the need for any mapping Plan! Plan! Plan! 48
A multi-disciplinary approach for achieving the best quality of clinical data produced by the assignment of the most specific ICD-10 codes based upon complete and accurate clinical documentation will have farreaching effects within healthcare organizations as well as the entire healthcare delivery system. 49
Questions? 50
Contact Us: Cortnie Simmons: csimmons@himaginesolutions.com Brad Justus: bjustus@himaginesolutions.com Tweet @brad_justus 51