Windham Brannon's ICD-10 Webinar

TIME IS RUNNING OUT – ARE YOU READY FOR ICD-10?Valerie F. Barckhoff

December 2014

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What’s going on with ICD-10?

• With the Texas Medical Association leading the charge, physicians across the country were pleading with Congress to delay ICD 10 until 2017– The goal was to add the delay to the $1.1 trillion

spending bill on December 11, 2014• But no language was included in the bill that would

delay the implementation of ICD 10• So, will October 1, 2015 be the compliance date?

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What’s going on with ICD-10?

• Your guess is as good as mine– Physicians will continue to challenge the 2015 date– Hospitals and Payers will continue to support the 2015

date– And we all have to make decisions on how to proceed!

• Here’s what we can tell you:– You can’t afford to not prepare!• But, we’re going to share with you what we’re

advising our clients to do….

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But First, Let’s Talk About the State of Readiness

• In September, 2014, WEDI released the results of it’s ICD-10 Industry Readiness Survey – So, who did they survey?• 324 Providers• 87 Vendors• 103 Health Plans

Source: Workgroup for Electronic Data Interchange (WEDI) ICD-10 Survey Results; September 2014

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ICD-10 Readiness: Vendors

• Who were the Vendors in the survey?– Clearinghouse services– Electronic health records– Coding Service– Revenue Cycle Services– Products

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ICD-10 Readiness: Vendors

• Two-fifth’s of vendors have completed their ICD-10 product development– Another third are at least three-quarters complete

• Two-third’s of vendors indicate that their ICD-10 products are already available to customers

Overall Assessment: Made progress during one year delay with slippage only related to testing

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ICD-10 Readiness – Health Plans

• Who were the Health Plans in the Survey?– Blue Plans– Commercial Plans– Federal Plans– State Agencies

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ICD-10 Readiness – Health Plans

• Nearly three-quarters of health plans have completed their ICD-10 impact assessments

• Three-quarters of health plans have started internal testing

• Over half of health plans have begun external testing

Overall Assessment: Made progress during one year delay

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ICD-10 Readiness - Providers

• Who were the Providers in the Survey?– Health Systems/Hospitals (1/2 of providers surveyed)– Physician practices (1/3 of providers surveyed)– Respondents were equally distributed across the

country• Slightly more urban respondents than rural

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ICD-10 Readiness - Providers

• Only half of providers have completed their ICD-10 impact assessment (no improvement from previous year)

• One-third of providers have begun external testing.• Over half of providers indicated that they did not

expect to begin external testing until 2015

Overall Assessment: The delay has negatively impacted readiness for providers (providers either slowed-down or halted efforts)

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Why Should You Care if Providers Aren’t Ready?

• We all know Coder Productivity will go down – Estimates are between 20% and 60% decrease in

productivity– This will negatively impact an organizations DNFB!

• The financial risk is HUGE– CMS estimates that Accounts Receivables will increase

between 20% and 40%– And that can have a dramatic impact on your Days

Cash on HandIncrease

20% 40%Days AR 45 54 63 AR $ 40,137,000 $ 48,164,400 $ 56,191,800 Days Cash on Hand 125.9 116 106 Days Cash Reduction -9% -16%

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It gets worse….

• CMS also expects rejections/denials to increase between 100% and 200%!– A hospital with an average 10% rejection/denial rate

can see a dramatic impact when ICD-10 goes liveIncrease

100% 200%Net Patient Revenue $ 293,000,000 Rejection/Denials $ 29,300,000 $ 58,600,000 $ 87,900,000

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What Now?

• Do you spend hundreds of thousands, even millions, on ICD-10 readiness?

• Do you wait and hope for a delay?• What is the best strategy with all this ambiguity?

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WB Recommendations

• We believe that the majority of ICD-10 readiness activities should be handled by an internal project team.

• We also believe that, because of the heavy financial and compliance issues related to ICD-10, that you should have an independent, 3rd party evaluate your readiness activities

Let’s discuss these two items separately

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Handle ICD-10 Internally as a Project

• First, let’s talk timeline and where you should be NOW!

Revised CMS Hospital Implementation Timeline (www.cms.gov/icd10) Spring 2013 Summer 2013 Fall 2013 Winter 2014 Spring 2014 Summer 2014 Fall 2014 Winter 2015 Spring 2015 Summer 2015 Fall 2015

Impact Assessment

Implementation Plan

Vendor Assessment

Initial Budget Training and Education

Internal System Design and Testing

Internal Testing Implementation of ICD-10 remediation project plan External Testing Intensive Training for Coders

Transition ICD-10 systems to production

Full Compliance Today Full Compliance

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• We know from the WEDI survey that 50% of the providers have not completed an impact assessment.

• So, let’s focus on a rapid, catch-up plan– Step 1: Establish an ICD-10 Project Management

Structure and Governance• Don’t underestimate the importance of having an

effective governance structure in place

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Steering Committee

ICD-10 Program

Office

SC should include Executive and Functional Leadership (C-level and VPs)

ICD-10 PMO should include Business Owners, a Project Manager, Compliance

and other support

IS&T HIM/ Coding PFS Managed

CareEducation/ Training Finance

Important Note: It may be necessary to hire an experienced Project Manager for this project, depending upon the size of the

organization

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• Step 2: Complete an impact assessment that includes:– Key business processes– Systems and interfaces– Vendors, clearinghouses, and other business

associates– Identification of key metrics to monitor throughout the

implementation process

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• ICD-10 Impact Assessment ChecklistItem Assigned

To:Completion Date:

Create a list of all electronic systems that use ICD-9

Document all work flow processes that use ICD-9

Create a list of vendor contact information

Identify all departments/staff that work with ICD-9

Identify necessary work flow changes to comply with ICD-10Identify contact for all payers

Survey vendors to determine their ICD-10 plans

Survey Payers to determine their ICD-10 plans

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• Step 3: Develop an ICD-10 transition plan and budget– Policy, procedure and system updates– Training• Beyond Coding!

– Vendor tasks and monitoring

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• Step 4: Communication and Knowledge Sharing– If you do not actively communicate with your

stakeholders, they will fill in the blanks with the WRONG information

– Have a plan for:• Internal Staff• Contractors• Vendors• Other Key Stakeholders

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• Step 5: Risk Management– How will you track and manage issues?– At a minimum, you need to keep an ICD-10 issues log• Reviewed weekly at Program Office• Actively communicated to Steering Committee

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• Step 6: Implementation Management– Who owns each of the vendor contacts?• Want to make sure your vendors are ready for ICD-

10– Active management and progress of internal and

external implementation activities– Tracking and report on implementation progress• Do not be afraid to have a “red light” task

– Active issues monitoring and development of risk mitigation strategies

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• Step 7: Training– Should be role specific– Begin with a pre- and post-assessment– Have Knowledge champions

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• Step 8: Clinical Documentation Improvement (CDI)– Conduct an evaluation of your documentations

readiness for ICD-10– Identify improvement areas– Develop CDI quality monitoring and improvement

programs

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• Step 9: Testing/Readiness for go-live– Develop a clear test strategy and detailed test plan• Should go beyond technical testing, but include the

outcomes– Develop business scenarios• Focus on processes with the highest ICD-9 volume

and the greatest financial impact to the organization

– Conduct end-to-end testing• Full execution of a process with a business partner

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Engage a firm for ICD-10 IVV

• What is IVV?– Independent Validation and Verification

• Why is it important?– Provides an independent, 3rd party view of readiness

activities– It’s an important part of Risk Mitigation strategies– Provides the Board assurances that the internal

Leadership team and the Business Owners are focused on the right activities

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Engage a firm for ICD-10 IVV

• Executives should be concerned about their organization’s readiness for ICD-10– Will they be able to comply with the October 1, 2015 deadline?– Is the organization focused on the right activities to achieve

compliance?– Will vendors be able to comply with the October 1, 2015 deadline?– Will coders and physicians be ready for the documentation changes?– Will the business process break during the transition?– Will our patients be negatively impacted?– Will this be a revenue neutral event for the organization?– Are they prepared for the worst case scenarios?

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Our Team

• Valerie F. Barckhoff is a Principal in Windham Brannon’s Healthcare Advisory practice– Valerie has over 20 years experience in the

revenue cycle and compliance, both in consulting and operations. She has provided numerous clients support in ICD-10 readiness, and has served on Regional panels for HFMA on ICD-10

– Bachelors, Health Sciences – University of Kentucky

– MBA, Finance/Management – University of Tennessee

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Windham Brannon

Windham Brannon is proud to provide tax, audit, accounting and advisory services to the healthcare community. As a recognized leader in Atlanta and the Southeast since 1957, we are known for our technical expertise and commitment to the highest level of service. Our healthcare clients find a more proactive approach, more attention to their priorities, and more investment in their relationship with us to ensure their needs are anticipated – and met with confidence.

Contact information:3630 Peachtree Road NE, Suite 600

Atlanta, Georgia 30326404.898.2000 | windhambrannon.com

Windham Brannon's ICD-10 Webinar

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Transcript of Windham Brannon's ICD-10 Webinar