APR 27, 2012 10:56am ET

ICD-10 Chills and Thrills

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Last December, I prepared a cover story for our print magazine, “Here Comes Trouble,” that laid out the top ten fear factors facing the industry in the transition to ICD-10. After recently attending a leadership conference on ICD-10 sponsored by The Advisory Board Company, I could easily add another 10—or more—fear factors to the list. On the hospital side of the industry, the massive diagnosis and procedural coding system represents a change whose breadth is unprecedented. And as speakers at the summit pointed out, the new coding system—which is at the heart of hospital billing—has major financial implications. The financial risk resides not only in the cost of the transition, but in the eventual impact on service line reimbursement based on the way the government calculates its DRG groupings.

On that first topic, speakers from Mayo Clinic noted that the prestigious delivery system has identified approximately 200 different information systems that will need remediation under ICD-10. Judy Dokken and Christine Beckmann, both revenue analysts at Mayo, took turns describing the delivery system’s approach to preparing for the new code set—whose original compliance date of October 2013 is being pushed back a year, pending a final rule from HHS. Despite the delay, Mayo is pushing ahead with its own transition effort full speed ahead—a wise move no doubt. What do those 200 hundred systems do? They span a wide array of departments and services, both financial and clinical, Dokken told me. The number includes multiple modules under its core EHR system in addition to a number of home-grown systems. Keeping tabs on vendor readiness is a critical undertaking, and many CIOs have told me it is still unclear if ICD-10 remediation will fall under a standard upgrade, or be an additional charge.

Mayo’s impact assessment goes deeper than a systems inventory (a crucial first step many hospitals are just now beginning). With help from The Advisory Board, Mayo has begun to analyze the likely impact of ICD-10 on its own revenue picture. Several speakers pointed out that, in theory at least, the government is touting ICD-10 as “revenue neutral,” meaning the ultimate cash flow picture for the industry remains unchanged. Yet, when you dig into the details, ICD-10 will be anything but status quo—at least at the local level. For example, Mayo’s initial analysis with The Advisory Board shows that total orthopedics revenue at risk under ICD-10 will be more than $12 million annually, with total knee and total hip procedures accounting for much of the risk. Because it knows that its orthopedics line is vulnerable, Mayo is targeting early documentation improvement and coder training to physicians and coders in this area.

The Advisory Board Company also is working with Trinity Health in its ICD-10 transition. James Green, a senior principal at the consulting company, described Trinity’s governance structure in tackling the project, displaying an organizational chart that had more than two dozen departmental boxes with a project leader for each. Trinity kicked off its program with a massive retreat involving 200-plus staff, Green said, a testament to the breadth of ICD-10’s impact.

Although it is based in Michigan, Trinity runs nearly 50 acute care hospitals in multiple states, so it has to manage the project nationally. Trinity shared its own internal ICD-10 communications posters. For a corporate environment, these posters are remarkably straightforward, sporting titles like “Preventing the Flight of Talent during Transition” and “What Will Providers Ask During ICD-10 Transition?” The posters are designed to keep the topic front and center, particularly among physicians—a group critical to the success of the transition, but one often skeptical of its value.

Mayo and Trinity are good examples of health systems attempting to stay on top of ICD-10. But they do not necessarily typify the industry. By many indications, the industry is well behind in its preparations for ICD-10—a fact the government recognized when it announced intentions to delay the compliance date. If there was a common theme to the Advisory Board meeting, it was the need to continue to press forward in the transition despite the delay. Several speakers described even a one-year delay as little more than breathing room for a long, tangled, and perhaps quite costly effort.

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