For providers working on the move from ICD-9 to ICD-10, the governments October 2015 compliance deadline may still seem far off. But it's not.
"Many of you may think, 'Well, I have another year to go,'" said Denesecia Green of CMS' Administrative Simplification Group during a Medicare Learning Network webinar. But time is of the essence, Green said.
Granted, in December 2014 there were some indications that another attempt would be made to legislatively extend the deadline. But the fact remains that many providers have so far made little progress in preparing for the medical code switchover, according to the results of a late September survey from the Workgroup for Electronic Data Interchange.
Part of the problem has been attributed to CMS's announcement in August, following legislation passed by Congress last spring, that it was pushing an earlier ICD-10 compliance deadline from Oct. 1, 2014 to Oct. 1, 2015. In a letter to Health and Human Services Secretary Sylvia Mathews Burwell, WEDI said the delay "negatively impacted provider progress, causing two-thirds of provider respondents to slow down efforts or place them on hold." Among the pre-work that suffered was testing.
However, there are at least anecdotal signs that providers are ramping up testingsuch as acknowledgement testing, also known as historical validation testing, and end-to-end testing-with insurers.
Under acknowledgement testing, a provider submits a claim to a payer, which checks the claim for appropriate HIPAA 5010 transaction standard edits, ICD-9 and ICD-10 edits, and transaction dates, with the goal of verifying that the payer can accept the claim. But this test does not tell a provider how an ICD-10 claim will adjudicate, so providers won't know if the resulting reimbursement will be revenue neutral or otherwise.
That is important because many payers may accept an ICD-10 claim, but their adjudication logic for member benefits, medical policies, referrals, pre-authorizations and other functions may react differently in ICD-10 based on how a payer has redefined the functions in ICD-10 or "cross-walked" (mapped) them to functions in ICD-9. Another factor in payment will be how payer systems process diagnosis-related groups in ICD-10, with some plans stepping down transactions from ICD-10 to ICD-9 for payment while the majority implement new ICD-10 versions of the groups that may introduce variability.
End-to-end testing is, theoretically, where payers will learn how ICD-10 claims are being adjudicated and providers will learn the effect on reimbursement. The final result should be the production and transmission to the provider of electronic remittance advice. End-to-end testing involves clinical information on the patient, how information is converted into ICD-9 or ICD-10 codes, and the methodology adjudicated. Inpatient claims adjudicated on DRG methodology are impacted significant while outpatient claims adjudicated on fee-for-service methodologies are much less impacted.
In early 2014, with last year's Oct. 1 ICD-10 compliance date looming, many providers were conducting tests with their insurers with mixed results. In general, most payers were doing acknowledgement testing, which confirms that their information systems can receive ICD-10 coded claims. Some payers were doing end-to-end testing, under which the claim is adjudicated and-ideally-generating electronic remittance advice and sending it back to the provider. But the capabilities of insurers were hit-or-miss. Some could do only acknowledgements and some offered end-to-end testing but failed to generate remittance, while a few went all the way, with tests ending in a remittance.
By late last year, however, providers appeared to have ramped up testing, and as this year's Oct. 1 deadline looms, the urgency to accelerate testing is becoming increasingly evident.
Ready, set, test
Medicare is offering end-to-end testing in January, April and July 2015, letting about 850 providers participate during each round, and the agency expects to generate remittance. Forms to participate are on regional contractor websites. Last fall, Medicare was finishing end-to-end testing with Denver Health, sending the payer 25 facility and 25 professional claims. All the claims were accepted, says Anita Shabazz, applications analyst, who was waiting on a report from Medicare for further details. Denver Health expects to test with Medicaid in January, she says.
Lori Logan, senior vice president at the Provider Solutions clearinghouse unit of payer software vendor TriZetto, believes more insurers are ready for end-to-end testing than they have indicated, but they did not want to bother with it in 2014. Like providers, they used the compliance delay to finish other priority projects.
Logan says TriZetto has done testing with 177 payers, mostly acknowledgement testing, and she expects both acknowledgement and end-to-end testing to increase in the first quarter of 2015.
Some providers are dual-coding dummy claims to test with payers while others are sending live ICD-10 claims for real patients; it depends on the wishes of both the provider and the payer.
University of Utah Health Care learned that using live ICD-10 claims gives a provider real-time data without using an ICD-10 era production environment, which most providers don't yet have. "That was the only way we could be sure the end result was what we really would see if we were live," says Connie Tohara, the provider's HIM director.
The more coders dual-code, the more they will feel like it is their regular work pattern and become very proficient, says Mary Beth Haugen, CEO of Haugen Consulting Group. Coders in the ICD-10 era will never get back to their productivity levels under ICD-9, she cautions. But the more proficient coders become, the lower the productivity hit will be-maybe 20 percent instead of 60-70 percent. Consequently, dual-coding throughout 2015 will give organizations a good idea of the productivity levels they can expect and aid in setting appropriate coder staff levels.
Interestingly, Denver Health has not been dual-coding live claims because its insurers want primarily claims they have seen before-recoded in ICD-10-to check their eligibility systems, says applications analyst Shabazz. Denver Health sends ICD-9 claims to Haugen Consulting, which uses 3M Health software to translate them into ICD-10 and then sends the claims back to Denver Health, which submits them to clearinghouse MedAssets to transmit to insurers for testing. Shabazz expects to use this approach until March, when she anticipates the coding staff will be proficient in dual-coding.
Denial of claims
TriZetto also sees a dramatic increase in denials of claims being tested for adjudication, Logan says. The company will focus during 2015 on the need for denials management processes so that, come Oct. 1, payers are not denying claims that should be approved and providers aren't experiencing an overload of denials.
At a recent conference, Logan asked an audience of about 150 physician practice administrators how many were knowledgeable about denial management and 20 percent raised their hands. That has to change quickly, she warns, noting that Medicare has said rejections and denials may increase 100-200 percent, and days in accounts receivables could rise 20-40 percent. A rejection is when a claim is not accepted by an insurer because something is wrong with the claim, she explains; a denial means an insurer has accepted the claim but the provider gets only partial or no payment, for any of a number of reasons, such as the insurer believing some of the charges were not medically necessary.
High rejection and denial rates are a worry for many providers, Logan says.
TriZetto recently launched a new denial management dashboard that shows the level and trends of denials and how to address them. The dashboard serves as an awareness initiative, so if providers find they have a denials problem, there is time to fix it before October.
But October is closer than providers may realize.
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