Two years to go. That's how much time the health care field has before it must switch to a vastly more sophisticated medical coding system that determines the substance of claims submitted for most services performed, as well as the detailed picture of clinical care necessary for, among other things, operating under models of payment based on quality performance.
In the 32 months since final regulations were published, providers already should have assessed all information systems for using billing codes in diagnoses and procedures, known by their acronym ICD-9, and devised a timeline for upgrading them to produce the heftier ICD-10 codes in cooperation with the vendors of those systems, says Nelly Leon-Chisen, director of coding and classification for the American Hospital Association. "By September, if they haven't even started — good luck to them," she says of the many months necessary to tackle that assessment phase and get their IT systems in order.
But for all the time and effort that such a technological find-and-remediate marathon represents, it's just the start of what health care executives must make sure happens by the regulatory deadline of Oct. 1, 2013, according to experts trying to communicate the gravity of the situation to the health care field in time.
"I don't want to minimize the information systems in preparing for ICD-10, but that's not enough," says Paul Weygandt, vice president of physician services for J.A. Thomas and Associates. Communicating health care services as discrete codes involves many on the payroll — health information management professionals, clinical documentation specialists, DRG groupers and others — but most importantly, the raw material traces back to what physicians and other front-line clinicians give them.
"The problem is not in bringing systems to ICD-10 compliance — that's cake, that's not the challenge," says Mike Davis, managing director of the Advisory Board Company's applications and technologies collaborative. "The challenge is the physician documentation to represent the specificity needed by the coders to accurately code ICD-10."
The support and infrastructure mustered around the use of the technology is just as critical as the technology itself. "The message to the CEO might be that if you do everything properly for IT preparation, but you don't address the human element — the personnel, the staffing, your plan for infrastructure — you'll not be successful under ICD-10," Weygandt says.
Fundamentally, though, the opening impact assessment and a plan to respond to the IT upgrading workload identified by that assessment will be what puts organizations in position to get their coding practices in shape — or, if put off, leave them flirting with disaster, says Jon Melling, a consultant with Top Tier Consulting. And he's concerned that the miscalculation of time required is widespread.
"We're on the verge of going from a search-and-rescue mission to a search-and-recovery mission," Melling says. "The ability to identify all the changes that are needed — people, processes, systems — is getting so tight now in terms of the ability to remediate everything that you find on the other end of the assessment that you may or may not be able to get ready in time."
Other experts stress that it's still not too late for organizations that haven't begun the process; they'll just need to work harder and at a faster pace in the time left.
And they note that smaller, stand-alone hospitals with fewer patients, smaller staffs and fewer IT vendors have a less complex row to hoe.
Covering All the Coding Bases
Prowling through software systems in search of ICD-9 codes could be a minor excursion or a major journey with many legs, depending on the size and attributes of a hospital or health system and the extent of automation and technology. "For some of them it is very simple; others, if they get deep into it, they're getting scared by how much work there is to be done," Leon-Chisen says.
Academic medical centers are more likely to use diagnosis codes in research and teaching as well as in patient care and reporting of quality metrics, and those that have done their inventory have turned up "anywhere from 50 to 400 different applications where these codes are," she says.
For larger organizations, just planning the rollout of the assessment is a job in itself. Banner Health, a Phoenix-based system of 23 teaching, community and critical access hospitals in Arizona and six other states, started planning its IT assessment and the governance of all ICD-10 preparations in November 2009, and it began the actual assessment work in May 2010, says Linda Martin, IT project management senior consultant.
"We took the approach that everything is suspect until proven otherwise," Martin says. That included software applications in not only the nearly two dozen hospitals, but also the outpatient clinics of more than 550 employed physicians, as well as surgical centers and other associated facilities and services. The process resulted in a working list of 275 applications to review, track remediation progress — including readiness of vendors — and ultimately declare as ready to go.
Despite the nearly two years of intensive advance work, there's a ton of preparation and implementation ahead, says Martin. "I would have loved to wrap up the impact assessment at the end of 2010, but we won't be able to finish it until we actually get the applications in place, because we won't be able to do our gap analysis in terms of what's changing between the existing and new version until we actually have our hands on them."
A tight time frame also hovers over St. Luke's Health System, a network of five hospitals in Idaho and 300 employed physicians in 90 locations throughout southwestern Idaho and into Oregon and Nevada. A high-level assessment of application inventory in June 2010 resulted in a decision a month later that it was strategically wise — and more practical — to replace and standardize the entire foundation of technology than to remediate a tangle of IT inherited from several years of health system expansion, says Adrienne Edens, St. Luke's system vice president and CIO.
The replacement encompasses revenue cycle, registration, scheduling, hospital billing, inpatient medical records, and ambulatory electronic health records and practice-management systems, all from a single vendor.
That investment of $110 million over seven years in total capital and operational costs will avert what would have been a race against time to upgrade and integrate eight different EHR systems and 14 separate practice-management systems among the employed physicians, plus three different inpatient EHRs, Edens says. But it substitutes a different time-related challenge: getting the implementation completed in time for both the optimal ICD-10 testing period and for other preoccupations of senior executives such as qualifying for the Health Information Technology for Economic and Clinical Health Act's meaningful use incentive payments.
Plans are for the revenue cycle replacement to be finished by March 2012 and for physician practices to implement the upgraded EHR applications in four waves between November 2011 and September 2012. By making the replacement decision early enough, St. Luke's avoided what, for many, will be a mad scramble to get on ICD-10 implementation schedules.
"You've got to make sure you're in the queue with your vendors, that you've got your place," says Edens. In addition, "If you don't get your plans in place and can't keep to your live date — if you're not ready for your upgrade when it's scheduled — you could have some real problems, because your vendor might not be able to accommodate that slippage, depending on how many other upgrades they have scheduled."
Goal Is Not Just Compliance
Providers generally need to think through the amount of time they should reserve to test systems live, says Douglas Gentile, M.D., chief medical officer of Allscripts Healthcare Solutions, a health IT vendor. If that period is nine months, it requires all system changes to be implemented by the beginning of 2013. Implementation then takes the timeline back however many months earlier depending on the complexity of the IT systems and how long upgrades normally take. "They need to start planning today, because it's not that far away," says Gentile.
But getting to that testing point is just the necessary setup for the bigger challenge, which is operating well enough under the new rules of billing and reimbursement to survive the first year, says Jim Lazarus, managing director of revenue cycle solutions at the Advisory Board Company. "ICD-10 compliance does not equal ICD-10 success," he says.
"What's at stake for hospitals here are literally millions of dollars, in poorly invested ICD-10 efforts to begin with — not investing appropriately — and ultimately in lost revenues and declining reimbursement once they move forward into ICD-10 in October of 2013," Lazarus says. An Advisory Board analysis projected that net revenue of a typical 250-bed hospital will decline by $1 million to $2.5 million in 2014 because of erroneous coding, payment errors and denials, and inadequate mapping to DRGs in contracts. The analysis puts the three-year impact at a loss of $2.5 million to $7.1 million in net revenue.
Even organizations that start preparing early can be on a path to revenue loss if they focus too much on coding processes and IT systems at the expense of physician education, clinical documentation improvement and business operations, Lazarus warns.
One client, a 315-bed hospital in the Midwest, began ICD-10 transition efforts early in 2010 but had to start over a year later when the chief financial officer recognized that it failed to engage physicians, overlooked key tasks related to avoiding denied claims, and did not catch that the state Medicaid program — 25 percent of its payer mix — planned to be "ready" but that meant processing ICD-10 claims by mapping backward to ICD-9, a red flag for conflicting calculations of payments.
For the most part, the root cause of this impending hit on financials is the substantially higher level of detail on every act of patient evaluation and care that the new coding system will require in documenting the diagnosis and resulting procedures, and then turning that documentation into clean physician claims or the most appropriate and justifiable hospital DRGs, coding experts say.
So while the organization is busily assessing and remediating IT systems for coding accuracy, a parallel assessment of documentation abilities among physicians, documentation specialists, coders and billing staff should be well underway by now, Weygandt says. "If the performance is not good under ICD-9, it will be worse under ICD-10; that's clear," he says.
A chart review of clinical patterns in a hospital could tip off executives as to the current level of ability and what the future holds, says Mel Tully, senior vice president of clinical services and education at J.A. Thomas. "The clinical documentation in the chart is what drives coding," he says. "So if you have puny or inaccurate documentation, the coders are going to code that to less-specific, lower-weighted, lower severity-of-illness codes. And the same thing will continue to happen in ICD-10, but probably at a worse level."
Getting Physicians Up to Speed
The physician education aspect is as crucial as it is delicate. "What you don't want to do is force the physicians to learn ICD-10; if you do, you lose," says Davis.
What they need is a range of human and technological support, guiding them to supply all the detail required to proceed with a claim.
The Banner Health effort included some of the network's chief medical officers and informatics physicians, says Jaime James, senior health information management systems director. "To understand what is happening, we definitely look to them to help us carry the message forward and determine how best to reach the physician."
Physicians "need to supply the specificity for the coder, but it's not their responsibility to know all the components that are necessary," Weygandt says. "That's why it's absolutely critical to have a clinical documentation specialist (usually a registered nurse) who will have worked in the clinical world and understands the basic systems necessary for coding." These specialists act as the bridge between clinician and coder to draw out the appropriate documentation when it's missing.
Hospitals of 300 beds or more probably will have to put computer-assisted coding applications in place — new types of computer programs that take information from lab, pharmacy, radiology and physician to develop a bill, Davis says. "Now, obviously, you won't do that with complex DRGs, but if that can take some of the overhead off the simpler DRGs, then that provides real support for the coder environment."
To make sure all this documentation infrastructure is operating accurately, "You better have every ICD-10-compliant version in place in a test system on Oct. 1, 2012," Davis says, "because it's going to take a year of testing all this documentation rolling into coding, then finding out how the groupers work with the DRGs, working directly to create the bills, working directly with the payers to make sure that what you expect is what they expect."
Protecting the Business
In the final analysis, the preparations come down to protecting a provider's most important lines of business, says Lazarus, including "those can't-mess-up, have-to-nail-it, have-to-get-it-right issues with ICD-10 — the physicians that they have to train first, the systems that absolutely have got to be rock-solid even before then." Executives "have really got to pick the right battles about where to invest money to be successful with
ICD-10, not just compliant."
Given the potential business implications of ICD-10, Davis says, "The executive that should be responsible for managing this project is the CFO. It's not an IT project, it's not a coding project. This event will have a significant impact on the entire enterprise, specifically on the financials."
It helps to break the ICD-10 preparation effort into subgroups around the many areas requiring concurrent focus, allowing subject matter experts to delve into details that might be overlooked in a large group, says Martin of Banner Health. Banner's transition initiative recently formed teams on documentation, education and training, budget, reimbursement impact, payers, and applications and interfaces. And it's talking about having a denials management team as the deadline gets closer.
At St. Luke's Health System, Edens expects to be ready nearly a year in advance to examine workflow and run scenarios to make sure codes are going through correctly, because "you can end up with a big coding backlog, which is going to mess up your revenue," she says.
As part of the testing scenario, Davis suggests taking the top 10 DRGs by revenue and the top 10 by volume, "and if you get those to a place where it's pretty stable, then it really reduces the amount of risk."
Even the well-prepared organizations will take a hit. "Everybody's going to have problems for the first year after this conversion," Davis says. "The issue is who has enough sense to set up the governance and the environment so that they can really address those problems early on and start to figure out how to resolve them, so that it doesn't take them a year to get to the point where they're back to at least 75-percent coding efficiency."
All the more reason to be among that group rather than the stragglers. "People see 2013 and that seems very far away," Edens says. "For those of us who actually see how big this piece of work is, just remediating the systems, testing to make sure everything works, making sure we didn't miss anything, and getting the system ready in time for all that training to take place — you can't go live in September of 2013."
John Morrissey is a freelance writer in Chicago.
ICD-10 Preparedness Resources
- The American Hospital Association’s Central Office serves as the clearinghouse on medical coding for hospitals and health systems
- "How ICD-10 Can Improve Patient Care" by Nelly Leon-Chisen, H&HN Daily
- The Centers for Medicare & Medicaid Services explains the transition from ICD-9 to ICD-10
- "From Finance to Data, ICD-10 Will Transform Your Hospital" by Adrienne Edens, H&HN Daily