When it comes to describing ICD-10's impact on the revenue cycle, Rich Silveria paints with a broad brush. "The impact will be pervasive," says Silveria, corporate director of revenue finance at Partners HealthCare System, Boston. "It touches all the information systems within a provider, except maybe payroll and accounts payable. It is an enormous amount of work, a large complicated project. And my intuition is that most providers have underestimated the effort to get it done."

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.

A feature in the September issue of Health Data Management, available here, explores the cash-flow challenges that come with the changeover to ICD-10.

 

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