Preparation for ICD-10 transition has been one of the most troublesome periods for the healthcare industry in 2015. Now, with less than a month left till Oct 1, healthcare institutions and physicians have a new issue to be worried about: Despite all their efforts, will their practice be able to survive the ICD-10 hit?
Industry experts and CMS have repeatedly advised institutions and private practices to start saving revenue as the ICD-10 Implementation may lead to a six month dark period of increased claim denials and revenue loss. There is no confirmation that this dark period will stay limited to six months. Experts even hinted that this dark period might be the end for some practices that are not financially strong yet, to withstand the ICD-10 hit.
This brings us to the next question that you might be thinking of right now: Is there any way to guarantee the survival of my practice in this dark period? There is no certainty that your practice will not suffer enough from the ICD-10 hit, but yes, there are some measures you can follow to ensure that your practice manages to last in the long run. Following are some metrics that can help you determine how prepared your practice is to take on the ICD-10 hit:
1. Preparation costs
As we already know, the new coding system will have a significant impact on different areas of operations for healthcare institutions, including clinical analytics, data warehousing and Revenue Cycle Management. The ICD-10 preparation phase has been so lengthy and complex that it has been hard to keep track of the various costs that have been implemented by the practice or institution. These costs vary from a few thousand to several million in different major areas of implementation, like EHR and software upgrades, ICD-10 pre-testing, staff training, clinical documentation etc. It will be a wise decision to keep track of each of these costs in order for the institution to understand where the money is being excessively spent. Being well prepared for ICD-10 is a plus point for all practices, but doing so while wasting practice revenue down the drain can financially affect the practice at a later stage. This metric will be well effective for small practices that have limited finances and need to spend considerably on every step, while preparing for ICD-10.
2. Coder productivity
Although complete and detailed clinical documentation is necessary for claim accuracy, coders play the key role in the successful submission of a claim. No matter how much effort a physician puts in his documentation, the practice cannot show productivity if the coder handling the claims is inexperienced. On the other hand, if the coder is experienced but is forced to spend additional time on rejected claims because of inaccurate ICD-10 codes or incomplete documentation, the productivity of the practice will be affected. All healthcare organizations require a balanced claim processing cycle to continue showing improved productivity, the chances of which are less post ICD-10. According to experts, all healthcare organizations and private practices can expect a 60 percent drop in their productivity during the dark period post ICD-10 implementation. The productivity decrease will end soon for practices that restore their claim processing cycle and have experienced coders to lower the Claim Denial rate. However, there is no telling how long the other practices can survive without a steady claim processing cycle.
3. Claim Tracking
The third metric that all practices should follow is the number of claims that are processed and the first pass claim rate. According to a report, an average claim spends at least 35 – 40 days in Account receivable (A/R) and 35% practices get a first pass claim rate of just 70 to 80 percent. As we already know, claim denial rate is expected to increase tremendously post ICD-10 implementation and reduce productivity by 60%.
By regularly observing the claim acceptance and denial rates, practices can better understand their revenue cycles and identify any hidden loopholes. Repeated end-to-end testing with payers can further help practices in making sure that they are including all the necessary claim elements, according to the ICD-10 standards.
CMS has already taken some measures to counter the mysterious dark period post ICD-10 implementation, like introducing the one-year Grace Period. However, these measures can only delay the expected outcome. To safeguard the future of their practices, physicians should start putting these metrics to good use and develop strategies accordingly, to ensure the survival of their practices in the long run.