September 29, 2011

Analytics, Benefits of ICD-10 Outweigh Costs

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With ICD-10 on the horizon, there’s a lot to think about from a coding, reimbursement and compliance perspective. For a moment, however, let’s take a step back and a deep breath. Think big-picture: what is the goal of every healthcare provider?  Being an old vet myself, I know it’s to provide excellent, quality patient care. ICD-10 will get us there and give us the opportunity to measure how well we deliver care through the ability to focus on outcomes.

When you think ICD-10, think quality and meaningful use because it all ties together.

The Benefits

So, what do we need to think about? With the implementation of a new coding system, the first thing that comes to mind is money. Yes, there’s a cost to implementing ICD-10.  The Centers for Medicare & Medicaid Services (CMS), the World Health Organization (WHO), and the National Center for Health Statistics have collaborated for years to initiate ICD-10, as their focus always has been to put a system in place that improves outcomes.

Looking at the RAND Study, an ICD-10 study done for CMS in 2004, it becomes clear that the benefits of ICD-10 will outweigh the costs. As a synopsis of this study, RAND examined one-time and cumulative annual costs over 10 years. Costs included training of coders and physicians; productivity impacts on coders and physicians; and system changes affecting providers, vendors, payers and CMS.

The high-end costs averaged approximately $1.5 billion, according to RAND, but the benefits focused on outcomes; specifically, it indicated that ICD-10 will be a gateway to accurate payment for new procedures, fewer rejected claims, fewer fraudulent claims, better understanding of new procedures and improved disease management – with an estimated benefit of more than $6 billion to the healthcare industry during the aforementioned 10-year study period.

What can you, not only to be ICD-10 ready, but also to understand how you will be able to contribute to quality outcomes and excellent patient care? The answer: know your risk areas and, first and foremost, understand how you currently do business under ICD-9. This can be accomplished through analytics, specifically through analyzing your current business under ICD-9 by translating the codes to ICD-10. A few strategies would include looking at your areas of highest risk related to coding, reimbursement and compliance.

I-10 Strategies

Coding Perspective:

Look at your utilization under ICD-9. Specifically, look at the most frequently utilized ICD-9 codes at your facility. Start with the top 10percent (depending on the size of your facility, going up to 20percent). A few caveats would include that you need to understand the workflow in your organization specifically related to how ICD-9 codes are generated and to determine whether the codes are from encounter forms, order entry or HIM (just to name a few). Also, don’t forget to find out whether the interfaces are talking to one another (although, of course, that’s a completely different topic for discussion).

You can achieve understanding of your risk under ICD-10 through the CMS General Equivalent Mappings (GEMs) data. GEMs bridge the language gap between ICD-9 and ICD-10 CM and PCS to help providers understand, analyze and manage the process of moving to the new code sets. There are many translation tools on the market; just ensure that the translation tool you choose for your facility maps forwards and backward as well as offers the capability to analyze via reimbursement mappings.  Additionally, to expedite the process look for workflow tools that can batch 10-20 percent of the most utilized ICD-9 codes at your facility.

Reimbursement perspective:

Your next logical step is to analyze how you will be paid for those “most utilized” ICD-9 codes under ICD-10. This warrants gaining access to an MS-DRG grouper for ICD-10. Remember, the underlying mission for CMS was to create a system that is budget-neutral. Let’s not be foolish; do your homework. It is your fiscal responsibility to ensure that you get paid for that to which you are entitled.

 


 

This means looking at the highest-paid ICD-9 codes at your facility (and looking at the “most frequently utilized” codes doesn’t necessarily mean that they are the highest-paid). This can be accomplished by pulling your highest-paying DRGs with associated ICD-9 codes, then grouping the claims data and checking how those translate to ICD-10. This will help you understand the current case mix and also reveal a potential case mix you might want to go after – in addition to fostering understanding of your current inpatient surgical procedures and potential surgical procedures you may wish to perform at your facility in the future.

Compliance perspective:

To ensure that you stay in compliance and begin to look at the goal of quality outcomes, take the analytics a step further. Look at the most complex mapped ICD-9 codes in your current data. Alter your focus: there will be those that easily map as a one-to-one comparison via the GEMs. Instead, focus on the areas that have a one-to-many mapping to see the types of risks you are facing with ICD-10. And then, finally, focus on the areas of ICD-10 that were not present in ICD-9, which may give you the opportunity to capture great new analytics on patients by code. This includes identifying opportunities to track obstetric patient care and expenses by trimester; flagging patients who are suspected victims of domestic violence and may need additional intervention; and targeting conditions such as cardiovascular disease, cerebrovascular disease, cancer and diabetes – all conditions that are not intrinsically tied to underlying disease processes.

Analytics can be very powerful from a coding, reimbursement and compliance perspective. The specificity required with ICD-10 will allow us to better understand how we do business and give us the reporting mechanisms we need to better focus on quality and meaningful use. ICD-10 will be a financial investment, but the benefits will outweigh the costs when we have the opportunity to improve patient care through analytics.

About the Author

Maria T. Bounos, RN, MPM, CPC-H, is the Business Development Manager for Regulatory and Reimbursement software solutions for Wolters Kluwer.  Maria began her career at Wolters Kluwer as a product manager, responsible for product development, maintenance, enhancements and business development and now solely focuses on business development.  She has more than twenty years of experience in healthcare including nursing, coding, healthcare consulting, and software solutions.

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Read 84 times Updated on September 23, 2013
Maria Bounos, RN, MPH, CPC-H

Maria T. Bounos, RN, MPM, CPC-H, is the practice lead for coding and reimbursement software solutions for Wolters Kluwer.  Maria began her career at Wolters Kluwer as a product manager, responsible for product development, maintenance, enhancements and business development and now solely focuses on business development.  She has more than twenty years of experience in healthcare including nursing, coding, healthcare consulting, and software solutions.