Is That a Light or An Oncoming Train? ICD-10 1 Presented by: Lyman G. Sornberger Chief Strategy Officer Capio Partners President & CEO LGS Healthcare Consulting For over 29 years Mr. Sornberger lead revenue cycle activities for The Cleveland Clinic and UPMC and has consulted with the largest health systems in the country. Those healthcare organizations have revenues that exceed $12 billion. He has authored over 2,200 articles for HFMA, AAHAM, and other leading healthcare publications and has been a featured speaker at over 125 healthcare revenue cycle industry events. 2 1
Agenda Why Did We Do This ICD 10? What Did We Hear Prior to the Delay? What Was The Risk? What Is The Reality? What Does The Future Hold? 3 ICD-10 Transition ICD 10 DELAYED GOOD 4 2
Why ICD-10? ENHANCED IMPROVE REVNUE BUDGET CARE CYCLE NEUTRAL 5 ICD-10 - Painful Project Education and Awareness Leadership & Board Readiness Technology/Revenue Cycle/Clinical Documentation/People Impact Analysis Financial/Performance/Risk Mitigation/Strategies Implementation Strategy/Planning, Program Charter/Budget Estimates Timeline & Dependencies 6 3
7 Operational Gap/Risk Example 300 Bed Hospital $3.5M Missing Doc s $3.5M Doc Improvement $500K Contracting $600K Denials Payment Errors $200K Coding Errors 8 4
Remediation Timeline ICD-10 Rem mediation Progressio on Major Remediation Activities Today Computer assisted coding evaluation Project management/governance IT remediation sign-off Remediation workgroups established Finalize ICD-10 training sessions roadmap and timeline ICD-10 Testing Partnerships Test application and interface changes ICD-10 Upgrades Generate test scripts Application interface and use cases upgrades Retest and obtain Establish PMO Ongoing Training for sign-off staff & physicians Establish project charter, work & communication plans Identify ICD-10 super users Workgroups sessions Ongoing staff & physicians ICD-10 training Go-Live & Post ICD-10 Support Execute change management plan Go-live Prep and execute Ongoing staff and physician ICD-10 training Post Optimization Post Monitoring Managing cost Denial Management 9 ICD-10 Analytics Providers overwhelmed about effort for the ICD 10 transition A data driven approach helps providers conserve resources and limit compliance costs minimizing disruptions 10 5
ICD-10 [What Risk?] Increased Denials Increased Days in Receivable Underpayments Aged AR Decreased Cash Increased Cost 11 Reality Check Rejected Claims Slightly Above Historical Baseline 99.9% of Claims that Should be Coded in ICD 10 are Accurate Coder Productivity Decline is Less than 10% or No Change at All Resources: Emdeon, Modern Health, Mayo, CMS, and AMA 12 6
Reality U ncovered Underpayments are Less then 1% and the Blues Slightly higher, and CMS are at 7% Provider Satisfaction is Up Medicaid Rejections Average is 12% Higher but a Reflection of ACA, Contracts, and Benefit Design Resources: Emdeon, Modern Health, Mayo, CMS, and AMA 13 Smaller Hospitals 100 300 Beds Inadequate System Commitment Training Documentation Funding Preparation Registration and Orders Challenges Resources: Emdeon, Modern Health, Mayo, CMS, and AMA 14 7
Future of Healthcare Beyond 2015 What s next? 15 RCM & HIM Evaluations Not a 30 Day Cycle Assessment Assess reimbursement shifts Coding, Denials & Contracting Engage providers in trends Assess revenue risk Promote strategies to mitigate risk Identify revenue maximization opportunities 16 8
RCM & HIM Evaluations Remember the Evils RAC Medicaid Audits Two Midnight Rule LCD and NCD Edits Underpayment After ICD 10 ACA and Benefit Design 17 RCM & HIM Evaluations Remember the Evils Medical Necessity, Auth s and Certs Engage providers in trends Assess revenue risk Promote strategies to mitigate risk Identify revenue opportunities 18 9
DRG s at Risk Orthopedics Yes No Maybe 19 Partnership Strategy In house Outsource On/Off Shore Dual Workflow 20 10
Fourth Quarter Lessons Learned from Risk Mitigation Verify Revenue Impact Memorialize Future Training Seek Improvement Opportunities: Denial Management Coding CDI, CAC, NLP Automated Coding, etc. 201 5 21 2016 Benchmark Peer Performance Verify Revenue Impact Benchmark Seek Additional Improvement Opportunities 22 11
2017 Establish Performance Targets Verify Revenue Impact Seek Additional Improvement Opportunities Manage Against Reimbursement Changes 23 Questions? Feedback? 24 12
Contact Lyman Sornberger Chief Healthcare Strategy Officer lyman.sornberger@capiopartners.com c: 216.337.4472 o. 440.546.0947 www.capiopartners.com 25 13