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Research by Lee Ann Jarousse

The migration to a new version of the clinical codes used for hospital reimbursement, as well as quality and patient safety reporting has been discussed for more than 20 years. Despite last month's news that the Centers for Medicare and Medicaid Services will initiate rulemaking potentially to push back from the Oct. 1, 2013, compliance date, now is not the time to take your foot off the pedal. Transitioning to the new coding system is a mammoth undertaking, one that requires not just significant technology upgrades, but also thorough training of clinical, coding and financial staffs. Hospitals that fail to complete the overhaul to ICD-10 risk taking a sizable hit in reimbursements. The consequences for not complying include billing backlogs, cash flow delays, increased claims rejections and denials, unintended shifts in payment and costly back-end work to correct problems. Not including ICD-10 in your electronic health record plans will result in expensive retrofitting later.

The ICD-9-CM codes found in administrative claims data are the DNA of diagnosis-related groups used for hospital payment. In addition, many of the quality measures used to report on patient safety, health care-acquired conditions and value-based purchasing are driven by these codes. ICD-9-CM lacks the increased level of detail required for these emerging needs. A more robust and modern classification system is needed to identify new medical conditions and, more importantly, to recognize innovations in medical technology that are reshaping the way health care is delivered. There are several other benefits to providers as well, including the decreased need to include supporting documentation with claims, data for improved disease management to prevent readmissions, and better administrative data to evaluate medical processes and outcomes. Changing to a new coding system is challenging and requires careful timing as it overlaps with other national initiatives and requires prioritizing resources.

The final rule for ICD-10 implementation provided a nearly five-year implementation time frame. This is not merely about educating your coders, nor is it strictly an IT project, although there are significant information system issues. Every application in which diagnosis or procedure codes are captured, stored, analyzed or reported is affected. The transition to ICD-10 will involve executive leadership challenges across a wide range of functional areas, including finance, information services, decision support, compliance and the medical staff.

Health care organizations should have a carefully designed, integrated transition plan to address the new system's implications for timely reimbursement, information technology, decision support, quality and compliance reporting, staffing and training. That transition plan should involve a reevaluation of your clinical, financial and administrative work processes, which is why strategic planning and executive sponsorship are critical for success. — By Nelly Leon-Chisen

Case studies

Rady Children's Hospital | San Diego

Rady Children's Hospital began its ICD-10 planning in 2010. "So far, our experience has been one of steady work," says Albert Oriol, chief information officer. "We quickly got the organization's attention; we realize this is not just an IT initiative." Recognizing the importance of accurate documentation upstream, Rady launched a clinical documentation improvement program with support and leadership from key physicians. "If we manage this right, we can better document what's going on with the patient and get better data to improve how we manage their care," Oriol says. The organization also is upgrading its information systems and will begin testing this summer, with plans to be fully compliant by the summer of 2013. One of the biggest challenges, Oriol says, involves academic research. Many research projects rely on diagnostic and procedure codes and without the researchers' attention, it will be difficult to make the transition.

St. Luke's Health System | Boise, Idaho

A 44-page executive briefing on ICD-10 by the American Hospital Association caught the immediate attention of senior leaders at St. Luke's Health System. Following an assessment and implementation analysis, the organization realized it was better to start from scratch than to try to bring disparate systems up to speed. A new enterprisewide electronic health record and practice management system will replace individual systems still in place at individual hospitals. "We are a pretty new system," says Adreinne Edens, system vice president and CIO. "We were not operating at an enterprise level yet." She adds, "If we hadn't started this several years ago, we wouldn't have the plan and the capital in place to do this in time." One of the biggest challenges has been staffing the project, notes Edens. "We have to free up the right people. This is not a part-time project." St. Luke's hired a third-party consultant to assist with the project. "Having a third party involved will help identify things you haven't already thought of," says Jason Ewing, IT director of enterprise business services.

Avera Health | Sioux Falls, S.D.

As part of the ICD-10 assessment, Avera Health is trying to negate productivity and revenue losses following implementation. This includes regular discussions with the chief medical information officer and chief medical officers to map out physician training. "We know we need to provide various modes of physician training," says Kathy Dorale, vice president of health information management. "That's one of our biggest challenges — getting physicians to engage in the process and understand the change. Some will get it, some won't."