Presented to you by The Cooperative of American Physicians, Inc.

ICD-10 Action Guide for Medical Practices PAGE 1 Presented to you by The Cooperative of American Physicians, Inc.

Table of Contents Introduction... 3 What Is Changing and Why?... 4 What Are the Main Provisions of the Change?... 5 When Does It Go Into Effect?... 5 ICD-10 and Your Practice... 6 What s the Potential Downside?... 6 What s the Potential Upside?... 7 Recommendations for Compliance... 8 Basic Recommendations... 8 Advanced Recommendations...10 Conclusion...13 ICD-10 Transition Checklist...14 PAGE 2 PAGE 2

Introduction The International Classification of Diseases (ICD) is a medical classification list by the World Health Organization (WHO) that is updated annually and used by more than 25 countries. The current ICD-9 code set is more than 30 years old. Many consider it to be outdated, as it does not reflect recent advances in medical technology and knowledge, and has an extremely limited ability to expand. On October 1, 2015, all medical practices will be required to adopt new ICD-10 coding. In this booklet, we will cover the new code s structure, its requirements, important dates, and all other information you ll need to comply with the. new standards. We hope you find this guide valuable as you transition to ICD-10. ICD-10 Grace Period The Centers for Medicare and Medicaid Services (CMS) announced on July 6, 2015 a one-year grace period for ICD-10 submissions that lack exact specificity. Medicare contractors will not deny claims based solely on the specificity of the ICD-10-CM code as long as a valid ICD-10 code from the right family of codes is used. Moreover, physicians will not be subject to audits as a result of ICD-10 coding mistakes during the first 12 months following ICD-10 implementation. Physicians will not be penalized under the various CMS quality reporting programs (PQRS, MU) for errors related to the additional specificity of the. ICD-10-CM code, as long as a valid code from the right family of codes is used. If Medicare contractors are unable to process claims within established time limits because of ICD-10 administrative problems, such as contractor system malfunction or implementation problems, CMS may in some cases authorize advance payments to physicians. In order to be reimbursed, you must STILL submit using ICD-10. You cannot submit using ICD-9. Therefore, we strongly advise you to be fully prepared for the October 1 implementation. PAGE 3

What Is Changing and Why? ICD-10 consists of two parts: ICD-10-CM (Clinical Modifications) diagnosis coding, which is for use in all. U.S. health care settings. ICD-10-PCS (Procedural Coding System) inpatient procedure coding, which is ONLY for use in U.S. hospital settings. When most people talk about ICD-10, they are referring to ICD-10-CM, which is the primary focus of this guide. The ICD-10 code set reflects recent advances in medicine and uses current medical terminology. It also provides greater detail and more specific information about the diagnoses, along with the flexibility for future expansion that the current ICD-9 lacks. Note: This is not an issue for traditional Current Procedural Terminology. (CPT) or Healthcare Common Procedure Coding System (HCPCS)-based reimbursements, since these codes are not part of ICD-10 and are not scheduled for change at this time. ICD-10 provides much more granularity of detail than ICD-9. While ICD-9 CM has 14,000-plus codes, ICD-10-CM has more than 68,000 codes. The transition from ICD-9 to ICD-10 is different in that the structure of the codes will also. be changing. While there is no simple one-to-one match between ICD-9 codes and ICD-10 codes, there are general equivalence mappings (GEMs) available to assist in translating data from ICD-9 to ICD-10. Keep in mind that, like mastering a foreign language, true fluency in ICD-10 is more complex than just trying to cross-map elements from one system to the next, because many codes will not directly translate or could have multiple translations. Therefore, it is important that all staff understand how to natively generate and utilize codes under ICD-10. PAGE 4

The basic structure of the ICD-10 code: Characters 1-3 (the category of disease); 4 (etiology of disease); 5 (body part affected); 6 (severity of illness); and 7 (placeholder for extension of the code to increase specificity). x x x x x x x i i i i i 1-3 4 5 6 7 Example: S 8 6 5 2 1 Z. ICD-10 does not directly impact provider use of CPT coding for outpatient procedures and physician services or HCPCS. WHAT ARE THE MAIN PROVISIONS OF THE CHANGE? ICD-10 is mandated for all Health Insurance Portability and Accountability. Act (HIPAA)-covered entities. Converting to ICD-10 is a HIPAA code set requirement. Most providers, including physicians, are HIPAA covered entities and must comply. WHEN DOES IT GO INTO EFFECT? Although the deadline has been extended twice previously, it is currently set for October 1, 2015, and is expected to take effect at that time. A one-year ICD-10 grace period was announced by The Centers for Medicare and Medicaid Services (CMS) on July 6, 2015. While the grace period does allow for some flexibility, you still must submit claims using a valid ICD-10 code from the correct family effective October 1, 2015. Hence, we strongly advise physicians to be fully prepared for the October 1 implementation. PAGE 5

ICD-10 and Your Practice WHAT S THE POTENTIAL DOWNSIDE? 1. Lack of payment. After the mandated conversion date, any ICD-9 codes used in transactions for services or discharges on or after the compliance date may be rejected as noncompliant and the transactions may not be processed. That could cause immediate cash-flow consequences for your practice. 2. Significant implementation costs. Most practices are expected to incur significant costs in terms of new software, training of staff, and initial reduced productivity as they make the switch to ICD-10. The AMA published a study 1 dated February 12, 2014 that found that small practices can expect to spend anywhere between $56,639 and $226,105 to fully implement ICD-10. Medium-size practices may need to spend more. While these numbers may seem high, what s important is that you assess what YOU might have to spend in each of the below categories to make a successful transition: Training Assessment. Vendor/Software Upgrades Process Remediation Testing Productivity Loss Payment Disruption 3. Potential cash flow problems. While the CMS one-year grace period allows for some flexibility in ICD-10 coding, you still must submit claims using ICD-10 codes in the correct family effective October 1, 2015. If you are not prepared to do that, it is still possible that you could face a short-term spike in delayed or denied claims. 1 AMA; http://www.ama-assn.org/ama/pub/news/news/2014/2014-02-12-icd10-cost-estimatesincreased-for-most-physicians.page PAGE 6

WHAT S THE POTENTIAL UPSIDE? 1. Better data. A higher level of detailed information. The additional specificity of data being recorded should, over time, allow health professionals to better track best practices across the United States. The deluge of detailed information that will be generated by ICD-10 is expected to create a gold mine of actionable data by researchers and epidemiologists. Individual practices should also experience long-term benefits thanks to improved metrics that: Measure their clinical performance relative to averages. across their specialty Spot patient trends Find areas of potential business and workflow improvements 2. More appropriate and streamlined reimbursement. The new, more granular coding system will allow physicians to report. more accurately the complexity of care they provide. Eventually, this will likely result both in lower reimbursements for more routine care and higher reimbursements for more complex treatments. The upside. potential in this regard is most significant for new procedures, since the current ICD-9 system cannot expand with new codes that reflect the cost of. cutting-edge procedures. The greater degree of granularity in reporting is also expected to eventually streamline reimbursement, as the code s high level of detail should allow for greater automation and less payer-physician inquiries. 3. Less fraud. Having more granular and accurate data. should allow payers to create more complex algorithms to detect and combat fraud. PAGE 7

Recommendations for Compliance BASIC RECOMMENDATIONS These are the steps you absolutely must take in order to ensure your practice complies with ICD-10 requirements. 1. Identify a team. Clearly designate an ICD-10 team leader who will be responsible for driving ICD-10 adoption in your practice. Remember, the ICD-10 leader does not have to be a physician. Assign someone (like a coder) who has both the interest and time to tackle this issue. Be sure to identify supporting team members and their responsibilities as early as possible. Ultimately, the conversion effort will likely involve every member of your practice. 2. Scope out impact. Identify every place your office currently uses ICD-9-CM diagnosis or procedure codes and determine the impact of conversion (e.g., EHR, billing, practice management, referrals, hospital interactions, public health reporting, applications, forms, records, contracts, etc.). Note that the impact often covers a larger breadth of the practice than initially assumed. Take the time to talk through the change with every applicable member of your team and every part of your workflow from clinical to back office. Don t forget to consider the effect of ICD-10 on other planned or ongoing projects (e.g., HIPAA, EHR adoption, etc.). 3. Talk to your software vendors. Contact your practice management, EHR, and other software vendors to find out when they will have ICD-10 updates available. Investigate training and installation options. Inquire if they offer training at no cost to the practice. 4. Talk to your clearinghouses, billing service, and payers. Determine when their ICD-10 upgrades will be completed and when you can begin testing with them. Keep a log of your conversations with all vendors and obtain everything in writing. PAGE 8

5. Identify the changes you need to make in your practice. For example, you may need to update diagnosis coding tools, super bills, public health reporting tools, workflows, forms, etc. 6. Identify staff training needs and resources. Consider your options, ranging from traditional classroom training to distance education to webinars. Your vendors and partners will have many valuable resources, as will your national or local medical societies, especially within your specialty. The Centers for Medicare and Medicaid Services (CMS), American Academy of Professional Coders (AAPC), American Health Information Management Association (AHIMA), Healthcare Information and Management Systems Society (HIMSS), and Workgroup for Electronic Data Interchange (WEDI) are all also good sources for both free and paid training. Crosswalk your current codes from ICD-9 to ICD-10 to become as proficient as possible before implementation. Understand that the medical documentation will need to be more specific when using the new codes. Give yourself time to learn what is required in your chart documentation. AHIMA estimates that coding staff working outside of a hospital inpatient. setting will require 16 hours of training. Don t plan to train your staff more. than six to nine months before implementation without a refresher course to ensure staff members retain the knowledge. 7. Conduct extensive internal and external testing. Conduct internal testing to make sure you can generate all your transactions with the ICD-10 codes. Conduct external testing with your clearinghouses. and payers to make sure you can send and receive transactions with the. ICD-10 codes. Be sure to double-check the accuracy of the resulting data for hidden bugs.. Don t skimp on this step or wait until the last minute! Finding out you have a problem the week before implementation will be incredibly stressful and it may be difficult to find required resources, as every other practice in the United States will also be scrambling to prepare for the same deadline. PAGE 9

ADVANCED RECOMMENDATIONS We recommend these additional steps to ensure a successful transition to. ICD-10. 1. Establish a budget. ICD-10 is not likely to be a trivial expense item in your annual budget, and you should actively consider how much resources (in both time and dollars) you will realistically need/can allocate. Communicate this figure to your ICD-10 team lead. 2. Develop a timeline. October 1, 2015 will be here before you know it, and this isn t a transition you can successfully cram into the last month. Plan backward from the adoption date and give yourself plenty of padding for unforeseen problems or delays. Remember, every practice in the United States will be trying to make the same deadline, so if you wait until the last minute, resources might not be available for training or problem solving. 3. Implement a tracking system. You can simplify this complex transition with the simple addition of your own customized checklist. This can be as simple as a spreadsheet that addresses every key component, change, training, and testing phase. Having a tracking system will give you peace of mind and insight into whether questions are being answered and timelines are being met. 4. Seek additional resources. Your vendors and payers will all likely have many resources available, from training to timelines. Seek them out early. For general but still detailed advice, CMS has many resources, including an excellent 56-page implementation guide for small and medium practices. PAGE 10

The AMA has the following resources available for purchase: ICD-10-CM Mappings 2014, linking ICD-9-CM to All Valid ICD-10-CM Alternatives Principles of ICD-10-CM Coding Workbook Principles of ICD-10-CM Coding Advanced Anatomy and Physiology for ICD-10-CM/PCS. (Note: All coders will need to. understand anatomy due to the. increased specificity of ICD-10) 5. Prepare for potential cash-flow problems. Consider setting up or expanding an existing line of credit to mitigate any cash-flow interruptions that may occur. 6. Prepare a Plan B if any vendors or partners look like they may not make the deadline. Don t wait for them to fail before coming up with your alternate plan. Missing the deadline is not a realistic alternative for your practice. The inability of any vendor or partner to smoothly make the transition to ICD-10 could be a warning sign about their overall competence. PAGE 11

7. Consider likely financial impacts of ICD-10 reimbursements. Most payers will continue with current reimbursements schemes for now. However, at some point, it is likely that many will start to reimburse at a higher rate for more complex treatments and at a lower rate for less complex treatments, where previously these treatments may have reimbursed at the same rate when both were covered under the same ICD-9 coding. Note: This is not an issue for traditional CPT- or HCPCS-based reimbursements, since these codes are not part of ICD-10 and will not change. It is strongly recommended that the practice have a line of credit with its banking institution prior to the implementation of ICD-10. It is very likely that cash flow will be impacted. Establishing a new line of credit normally takes four to eight weeks to set up, so don t put this off. Share on: 8. Assess your staff s ICD-10 proficiency after implementation. Consider changes in workflow, additional training, software, or other resources to address weaknesses or inefficiencies. PAGE 12

Conclusion The transition to ICD-10 won t be cheap or easy. A widespread, comprehensive implementation of a new diagnosis code hasn t been done in more than a generation of physicians. While it s key to modernizing the way physicians practice medicine, the process can place a great deal of stress on you and your practice if you re not properly prepared. The Cooperative of American Physicians, Inc. (CAP) has supported California s best physicians for nearly 40 years with outstanding medical liability coverage. Our supplementary services are designed to help you and your practice thrive. That way, you can focus on what really matters quality patient care. This guide to ICD-10 is part of our effort to support physicians like you with resources that address their everyday needs. We hope you ve found it useful. Like what you ve read?. Let your colleagues. know about our. ICD-10 Action Guide. Share on: PAGE 13

ICD-10 Transition Checklist Follow the steps in this checklist for a smooth transition to ICD-10. Identify and establish an ICD-10 team and team leader for your practice Collect information on current use of ICD-9 and a list of staff members who need ICD- 10 resources and training Perform an impact assessment and identify potential changes to existing workflow and business processes, including the effect of ICD-10 on other planned or ongoing projects (e.g., HIPAA, EHR adoption, etc.) Contact systems vendors, clearinghouses, and/or billing services to assess their readiness for ICD-10, timelines, and cost estimates Estimate and secure a budget, including all costs associated with implementation, such as software and software license costs, hardware procurement, and staff training costs Identify training needs and resources Seek additional resources as needed Determine a business and technical implementation plan Determine and communicate timeline Develop a tracking system to monitor progress Consider financial implications of transition Prepare for potential cash-flow issues (if applicable) Prepare a Plan B for any partners or vendors who falter Complete system design and development Educate and train staff on workflow changes, ICD-10 system, and impacts Conduct internal testing Complete external testing with vendors, payers, billing services, and clearinghouses Transition ICD-10 systems to production Go live on October 1, 2015 Evaluate staff proficiency and workflow post-implementation. Make adjustments and/or provide additional training as needed For additional information about ICD-10, please visit http://www.cms.gov/icd10. PAGE 14

About CAP The Cooperative of American Physicians, Inc. was established in 1975 by a group of California physicians to manage the escalating cost of medical professional liability coverage. Two years later, CAP formed the Mutual Protection Trust (MPT), which has earned an A+ (Superior) rating from. A.M. Best since 2006. CAP now supports nearly 12,000 of California s finest physicians through offices in Los Angeles, San Diego, Orange County, Sacramento, and Palo Alto. Special Thanks CAP would like to express its appreciation to June McKernan, COO of Patient Preferred Dermatology Medical Group, Inc., and Mary Jean Sage, CMA-AC of The Sage Associates for their valuable contributions and expert review of this important guide. Learn more: 800-356-5672 www.capphysicians.com Share on: 333 S. Hope Street, 8th Floor Los Angeles, CA 90071 800-252-7706 www.capphysicians.com San Diego Orange Los Angeles Palo Alto Sacramento PAGE 15 A publication of the Cooperative of American Physicians, Inc. Copyright 2/11/2015