Health Providers on Budget for ICD-10 Transition, Finds Survey
Nearly 95 percent of healthcare organizations are at or below budget for the October 1 ICD-10 transition, with the variance between budget and actual expenditures ranging from 5 percent to 15 percent, according to early results of an online ICD-10 readiness survey released by The Advisory Board Company.
Nearly 95 percent of healthcare organizations are at or below budget for the October 1 ICD-10 transition, with the variance between budget and actual expenditures ranging from 5 percent to 15 percent, according to early results of an online ICD-10 readiness survey released by The Advisory Board Company.
In addition, 77 percent of respondents indicated that they have comprehensive budgets with specific line-item allocations. However, The Advisory Board Company notes that "with six months still to go in the process and many tests yet to run, budgets are likely to change with last-minute enhancements" and "while organizations agree on maintaining a strict budget, there's no consensus regarding how to transition across systems."
In more than half (56 percent) of the organizations, respondents indicated that the chief financial officer is ultimately responsible for the ICD-10 code switchover, followed by the vice president of finance (16 percent) and chief information officer (15 percent).
While organizational leadership responsibilities are well defined, other areas of ICD-10 planning and preparation remain undecided. The survey revealed that 95 percent of respondents will code charts using both ICD-9 and ICD-10 codes to prepare for the new system, but providers disagree on the percentage of charts to be dual coded--and one-third say they simply dont know. Though many providers have proactively negotiated terms that minimize reimbursement risks associated with the ICD-10 transition, 56 percent of respondents indicated that they have not renegotiated payer agreements.
"Most surprising, over 40 percent of respondents have not yet modeled the expected impact of the transition on accounts receivable (AR) days," states The Advisory Board Company. "According to previous research, it will take months, not weeks, to restore AR to pre-ICD-10 levels, while spikes in Discharged Not Final Billed (DNFB) can significantly disrupt cash flow. This impact is compounded by the fact that 30 percent of organizations are not building up cash reserves to prepare for financial disruption."
In addition, 77 percent of respondents indicated that they have comprehensive budgets with specific line-item allocations. However, The Advisory Board Company notes that "with six months still to go in the process and many tests yet to run, budgets are likely to change with last-minute enhancements" and "while organizations agree on maintaining a strict budget, there's no consensus regarding how to transition across systems."
In more than half (56 percent) of the organizations, respondents indicated that the chief financial officer is ultimately responsible for the ICD-10 code switchover, followed by the vice president of finance (16 percent) and chief information officer (15 percent).
While organizational leadership responsibilities are well defined, other areas of ICD-10 planning and preparation remain undecided. The survey revealed that 95 percent of respondents will code charts using both ICD-9 and ICD-10 codes to prepare for the new system, but providers disagree on the percentage of charts to be dual coded--and one-third say they simply dont know. Though many providers have proactively negotiated terms that minimize reimbursement risks associated with the ICD-10 transition, 56 percent of respondents indicated that they have not renegotiated payer agreements.
"Most surprising, over 40 percent of respondents have not yet modeled the expected impact of the transition on accounts receivable (AR) days," states The Advisory Board Company. "According to previous research, it will take months, not weeks, to restore AR to pre-ICD-10 levels, while spikes in Discharged Not Final Billed (DNFB) can significantly disrupt cash flow. This impact is compounded by the fact that 30 percent of organizations are not building up cash reserves to prepare for financial disruption."
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