ICD-10 will have a negative impact on revenue, four out of ten believe
A new survey shows that more than one-third of U.S. healthcare organizations (34%) have not conducted an analysis of the impact of ICD-10 on the revenue cycle.
The 2015 ICD-10 Readiness Survey by the American Health Information Management Association (AHIMA) and eHealth Initiative also shows that nearly four in 10 respondents (38%) believe conversion to ICD-10 will have a negative impact on revenue during the first year of implementation.
Well, October 1 is coming fast, and whatever healthcare providers believe about how ICD-10 will disrupt revenue, if they haven’t done an ICD-10 revenue impact assessment, they’re asking for trouble. The Centers for Medicare and Medicaid Services (CMS) predicts that claims denials after the October 1 deadline for converting to ICD-10 could triple and lengthen accounts receivable cycles by an extra 40%.
Given the other seismic changes to healthcare revenue models as providers transition to value-based reimbursement from fee-for-service, failure to adequately forecast and prepare for revenue disruption caused by ICD-10 can jeopardize an organization’s operations, effectiveness and even its very existence.
There are a number of vendors offering health organizations revenue impact assessment software and services. Most will begin by analyzing the provider’s claims records for at least the past 12 months, categorizing and analyzing procedures and then modeling claims to determine which might be vulnerable to errors after conversion to ICD-10.
If providers can identify potential trouble spots beforehand – such as a specific diagnosis-related group (DRG), individual service lines and processes – they can focus resources on extra training and testing. It’s better to detect a potential revenue cycle disruption before it happens than deal with it after the fact (while continuing to lose revenue).
Even if the number of unknowns and variables makes it difficult to forecast the impact of ICD-10 on revenue, a thorough impact assessment will expose flaws in a provider’s coding, claims and billing processes that can be corrected. It also will provide the data on which to devise a revenue risk-mitigation strategy.
Some impact assessment vendors offer add-on services such as training recommendations for coders and physicians as well as reviews of managed-care contracts to ensure provider protection.
In recommending that healthcare providers conduct a revenue impact assessment, the AHIMA and eHealth Initiative survey report concludes, “It is important for organizations to anticipate the impact the ICD-10 transition may have on their revenue.”
That’s an understatement; intelligently assessing and preparing for ICD-10 revenue disruptions should be treated by healthcare organizations as a necessity and responsibility, similar to meeting compliance or audit requirements.
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