Silveria speaks from experience. Partners is among only a handful of hospitals that have begun the transition work to the new coding and reimbursement nomenclature, which is mandated by the Centers for Medicare & Medicaid Services to take effect by in October 2013. A variety of industry surveys-from WEDI and other groups-suggests that the industry is falling behind the necessary preparation for the change, whose first step is implementing the HIPAA 5010 claims transaction standard.
Mandated by the federal government to begin January 2012, HIPAA 5010 supports the lengthier, alphanumeric codes of ICD-10, a system in wide use internationally. Sporting a five-fold increase in diagnosis codes, ICD-10 will require either an upgrade or outright replacement of any system using ICD-9. Yet the financial impact of the new coding system-which enables much more detailed descriptions of procedures and diagnoses-is largely an unknown.
That said, early movers like Partners-the eight-hospital system began its ICD-10 transition effort in April 2009-have outlined several key areas where financial operations will be affected. First, there will be transition costs, particularly on the information system side. Second, staff training and physician documentation expenses may become big items on the budget. Third, there's likely change in store for cash flow and financial operations.
The collective financial impact is anyone's guess. That's in part because of the many unknowns that encompass the industrywide transition, including payer readiness and response. In regards to response, many providers fear and expect that payers may alter-perhaps substantially-their reimbursement contracts.
Despite all the uncertainty, experts mostly concur on what the remediation steps should be-they just don't know how to get the industry's attention.
For physician groups, the transition costs to ICD-10 may prove staggering. According to an analysis compiled by Nachimson Advisors on behalf of the Medical Group Management Association and several other physician organizations, the total cost of ICD-10 would range from $83,000 for a small practice of three physicians to $2.7 million for a 100-physician group (see box, page 30). The analysis was conducted in 2008, eying the initial roll-out date of 2011-which CMS delayed.
If anything, the costs have gone up, says Robert Tennant, senior policy advisor at the Englewood, Colo.-based Medical Group Management Association, which lobbied for the postponement. "The impact on the physician group revenue cycle will be enormous," he says. "Software will need to be upgraded, but there is no industry money to do it." Tennant puts the expense issue in context of the meaningful use EHR incentives. "They provide $44,000 per physician over five years," he says. "You will use all the incentive money to cover the costs to move to ICD-10."
Increased documentation costs comprise a big chunk of the increased expense, according to the Nachimson analysis. Training is only the beginning, and many experts predict a marked decrease in the productivity of both physicians and coders, at least during the early phases of the ICD-10 conversion. "Everybody who interacts with the billing process needs to be trained," Tennant says. "If physicians don't understand the ICD-10 coding structure, they won't include in the documentation all the necessary information for the billing staff downstream to capture the capture the correct code. That means virtually every physician who sees patients will need to be trained."
'Help Wanted' sign
Mercer Medicine, a 35-physician multi-specialty practice based in Macon, Georgia, will begin training its coders in the new system next year, says Margaret Gaskill, billing/EMR systems manager. Coders will receive advanced training in anatomy, she says, pointing out that ICD-10 requires much more detailed knowledge of the body structure. "Physicians will also need to be trained," she adds. "They know anatomy, but they will need to know the changes in what information they need to provide. They've got to document 'upper right quadrant,' and can't just say 'back pain.'" In addition to the training, Gaskill plans to add two additional coders to her current staff of five.
As part of its transition plan, Mercer signed on with Navicure, its claims clearinghouse, to serve as a test site, first for the 5010 transactions standard, and later for ICD-10 claims. Mercer submits about 2,000 claims a month to Navicure, the primary source of electronic contact with the 100-plus payers with which the practice works. Gaskill is confident that her EHR vendor, e-MDs, Austin, Texas, will have its practice management module updated in time for 5010, which Mercer will test come January. "But any time there is a major change in software, or dealing with data, if somebody has the wrong information in the wrong spot, you're not going to get paid and you're going to have a dip in revenue. We're just trying to prevent it from becoming a sinkhole."
Some organizations are turning to I.T. to help with their training efforts. Lawrenceville, Ga.-based Gwinnett Hospital System, for example, plans to deploy a computer-assisted coding module this fall. The system, from A-Life, works in conjunction with the two-hospital system's McKesson EHR and Ingenix coding software, says Carol Fowler, director of health information management. "We will use the coding-assisted system as a training tool in a test environment," Fowler says. "It will be reinforcement to classroom training."
Gwinnett is in the early stages of its ICD-10 transition effort, Fowler says. "ICD-10 is not just about HIM, but the entire revenue cycle division," she says. Gwinnett has formed a multi-disciplinary group to monitor the transition, with representatives from information systems, patient accounting and revenue integrity, a department devoted to overseeing charge audits. "Revenue integrity is our first line of defense with insurance companies in case they are denying claims. But nobody can tell the potential impact on our revenue cycle from ICD-10 yet."
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