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ICD-10 Benefits for Healthcare Providers

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healthcare on January 23, 2014 - 3:22 pm in Economics

ICD-10 brings several benefit opportunities for healthcare providers across multiple categories which include Reimbursement, Information Technology, Clinical Coding, Quality Measurement, Monitoring & Performance, and Relationship Opportunities.

Reimbursement

The shifting from ICD-9 to ICD-10 code sets will benefit the healthcare provider in the form of more accurate payments for new procedures, fewer rejected claims, fewer improper reimbursement claims and greater efficiency in the billing and reimbursement process.

The increased auto adjudication of claims due to increased granularity of ICD-10 code will help in reduced number of claims being investigated or rejected due to insufficient information. ICD-10 will solve the problems caused due to lack of detailed information contained in the diagnosis and procedure code assignment. Fewer rejected claims will reduce the amount of rework for providers leading to an efficient reimbursement process which in turn will lower the provider administrative costs.

A reduced claims cycle coupled with lowered administrative costs will help the providers shift the excess resources in improving patient care. ICD-10’s improved precision in documentation of clinical care will greatly improve the likelihood of submitting accurate claims the first time around and receiving reimbursement for a range of procedures. As a result, there is a reduction in adverse impacts to provider revenue cycle.

The ICD-9 code set has now been exhausted and new codes cannot be added which limits the ability to code innovative procedures. Treatment techniques and methods have evolved over time. The limitation on expanding ICD-9-CM is the reason why few new procedures have been approved. Not all advanced treatments can be coded using ICD-9 accurately.  With ICD-10-PCS, the number of procedures for which new codes are likely to be granted will rise. If many more separate procedures can be coded, a differentiation between the simple and complex procedures will be possible.

Healthcare IT

A significant amount of assessment, remediation planning and effort will be required to prepare for the ICD-10 implementation. However, ICD-10 opens up opportunities for healthcare providers in the form of Legacy Modernization, and adopting new technology.

For example, SNOMED-CT and its integration with EHR Implementation can be achieved while migrating to ICD-10. ICD-10 remediation is also being looked upon progressively to make necessary framework so that future upgrades are swift, (example making support for ICD-11 migration.) These are some of the key initiatives that are not justified from ROI perspective but will have lasting effects.
Will Y2K problems ever occur again? No, because IT systems are capable to handle Y2K changes now. But will ICD-11 transition cause concern? NO – if ICD-10 transition is done thoughtfully and with innovative approach and YES if done from compliance perspective. But the basic difference lies in the fact that Y2K was IT impact while ICD-10 is both a business and IT impact, which is a reason of concern and what makes the impact huge.

ICD-10 is a good opportunity to phase out aging and inflexible systems or to modernize legacy systems. Consolidation of redundant applications and code sets on to a single enterprise-wide platform is the need of the hour. Moreover this gives an opportunity to look for new platforms and vendor solutions which can be used across the enterprise.

Many companies have grown via acquisitions and mergers and hence have multiple claims adjudication systems and multiple instances of various systems doing the same function. This will make ICD-10 impact more dreadful if remediation has to be made because it has to be done on several systems, which make IT budgets sky rocket, when there are conflicting priorities in terms of meaningful use , such as EMRs.

The shift to ICD-10 will help the healthcare providers assess whether the current platform will be able to accommodate the new opportunities that ICD-10 brings to the table or whether it will be cost effective to align the legacy platform to the new business model. Reduction of operational costs, risks and improved productivity is achievable through an increased and efficient spending in IT infrastructure. Key concerns for the CIO is allocating budgets, because ICD-10 is not a paid mandate at first and secondly it doesn’t give clear ROI in short-term. It’s a long term process.

Clinical Coding Opportunities

ICD-10 changes are broadly being looked upon as coding changes; why is biggest myth . Although it has significant impact on coding, the impact is far reaching in the business processes and IT infrastructure. Coders will code in ICD-10 which is a simpler method.  Planning for productivity loss by proper training will ensure a smooth transition for coders.

The new code set helps in improved population identification & severity stratification due to ICD-10, and specificity enhances disease and case management, as well as wellness programs. Utilization management can be improved by application of IC D-10 codes which leads to increased efficiency in the exchange of patient profile information, treatments across the care process and hospital resource management.

Improved reimbursement rates due to appropriate payments of new procedures, and fewer miscoded and rejected claims due to greater specificity in ICD-10 codes. Accurate incentive payments for Pay for Performance schemes and in general accurate claims payment will help both providers and payers.

ICD-10 codes will help in reducing documentation due to its granularity. There will be improved clinical documentation and coding accuracy to enhance the assessment and monitoring of patient safety and quality indicators, as well as compliance with third-party payer coding and billing rules and regulations.

ICD-10 provides detailed data for medical management interventions. It helps in the precision of pre-authorization process and also enhances the ability of Electronic Health Records to fullest extent.

The shift to ICD-10 codes will increase the auto-adjudication of claims. This helps the providers lower the administrative costs, reduce the manual review of rejected claims and improve the revenue cycle.

Improved Patient Care

ICD-10-CM and -PCS offer greater detail and increased ability to accommodate new technologies and procedures. The codes have the potential to provide better data for evaluating and improving the quality of patient care. For example, data captured by the code sets could be used in more meaningful ways to better understand complications, design clinically robust algorithms, and track care outcomes.

Increasing the detail and better depicting severity will help clarify the connection between a provider’s performance and the patient’s condition. In addition, ICD-10-CM greatly expands the codes for medical complications and medical safety issues. Complete, accurate, and up-to-date procedure codes will improve data on the outcomes, efficacy, and costs of new medical technology and ensure fair reimbursement policies for the use of this technology.

Person health records (PHR) can go to a greater level of understanding and description with detailed levels of information present in coding. The patients’ understanding of the disease / diagnosis would increase awareness which eventually leads to better care.

Expanded detail will help payers and providers more easily identify patients in need of disease management and more effectively tailor these programs. Adoption of ICD-10-CM would also facilitate international comparisons of quality of care and the sharing of best practices globally. ICD-10-CM is more effective at capturing public health diseases than ICD-9-CM. It is more specific and fully captures more of the nationally reportable public health diseases and also enables international sharing of these details.

Monitoring and Performance

The upgrade to ICD-10 offers provider’s better data in support of their efforts to improve performance, create efficiencies, and contain costs. ICD-10’s increased specificity offers providers the potential for considerable cost savings through more accurate trend and cost analysis. It will improve providers’ ability to monitor service and resource utilization, analyze healthcare costs, monitor outcomes, and measure performance. Greater detail on procedure types will allow providers to evaluate their own performance relative to their peers.

Providers can use this information to reallocate resources and promote themselves to patients and referring physicians. Providers can expect a reduced need for supporting documentation under ICD-10. The lack of sufficient detail in current code assignments has led to increased requirements for documentation to support claims. ICD-10-CM and -PCS codes are expected to reduce that need.
Furthermore, if planned correctly, ICD-10 can act as a catalyst in achieving meaningful use and enabling interchange and interpretability of data.

Relationship Opportunities

ICD-10 upgrade provides healthcare providers a unique opportunity to improve relations with providers and vendors. Providers can partner up with payers for coding improvements. Both payers and providers could collaborate and streamline reimbursement processes and thereby improve revenue stream and satisfaction. Providers can gain expertise in outcomes reporting and leverage for quality and pay for performance schemes.

Motivation to Leverage the Benefits

ICD-10 changes are being looked upon as a compliance activity and not as an opportunity to leverage benefits, primarily because it is an unpaid mandate and has come at a time when there are multiple conflicting priorities.

Providers need to link Benefits to Provider Success factors. These success factors can be the differentiator and help providers maintain or gain leadership position. An example of this would be:

  • Detailed information of ICD-10 codes will help providers improve quality of patient care.
  • The detailed code sets makes it easy for patients to understand the disease coupled with improved information in EHR and PHR, which leads to better patient relationship.
  • Accurate payments, lower rejection rates, reduced administration cost and improved revenue cycle directly link to better financials, a key success factor for evaluating investments to be made for ICD-10.
  • Detailed ICD-10 code sets and better use of EMR leads to greater patient safety.
  • ICD-10 can act as a catalyst for implementing meaningful use because of its detailed information.

Key strategy to adopt ICD-10 for leveraging its true benefits, providers would identify the success factors they are striving for in the marketplace and link the ICD-10 benefits .This serves as the motivation for implementing and accepting ICD-10 changes and creates positive environment of change and acceptance of ICD-10.

All these benefits will materialize if the approach towards ICD-10 is based on collaboration and innovation and is not a pragmatic approach which focuses on just being compliant with the mandate. ICD-10 compliance gives multiple options to leverage the mandate and create valuable opportunities for the entire provider and payer community. Collaboration & innovation will be the key to successful ICD-10 compliance.

About The Author

Manish Nachnani has over 6 years of experience and works as a Lead System Analyst in the Health IT field. His areas of expertise include ICD-10 Impact Assessment and Remediation, HIPAA 5010 with interest in m-Health, e-Health, Health 2.0 and Health Innovations.

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