May 15, 2012

Being Neutral with ICD-10

By Dennis Winkler

The transition from ICD-9 to ICD-10 is big and complex - that's a fact, and it's nothing new. As the industry starts to realize how big and complex it is, though, we're starting to understand the impacts this transition will have on everything in our environment - and so some of our initial opinions are shifting.

For example, look at how the industry views what should happen when every provider begins to use ICD-10. At first, healthcare providers and payers thought they'd be able to start using the ICD-10 code set right away, taking immediate advantage of the new level of detail. After a closer look, however, most agree that in the short term, a successful transition is one that does no harm. In other words, the move to ICD-10 shouldn't significantly increase claim rejections and inquiries, or cause unpredictable fluctuations in payments or benefit rejections. We like to call this being neutral.

It sounds simple enough, but as you look at the details, it becomes clear that the concept of neutrality is just as complex as ICD-10 itself.

Different dimensions of neutrality

From a payer's perspective, there are many different ways to strive for neutrality with ICD-10. At Blue Cross Blue Shield of Michigan, each such way is called a "dimension," and we identified six dimensions of neutrality:

 

  1. Payment - This dimension is focused on the relationship between ICD-10 and shifts in the assignment of Diagnosis-Related Groups (DRGs) for certain claims. A shift in DRGs could mean a shift in payment.
  2. Benefit - Here we are focused on the ICD-10 impact to benefit application for members, as well as the assignments of copays and deductibles.
  3. Revenue - In revenue neutrality, we look at Medicare Advantage claims and try to predict if and how ICD-10 will adjust risk scores.
  4. Clinical - This refers to the number of people within our disease and care management programs, and if those numbers will change as a result of ICD-10.
  5. Operational - This focuses on performance indicators and servicing metrics (call volume, claims processing rates, etc.).
  6. Financial - This takes into account all financial variables and their fluctuations to identify an overall cost impact.

 

Defining the dimensions

Identifying these dimensions involved a great deal of work, but it's only a small part of the whole challenge.

Once we knew where we wanted to focus our attention - the neutrality dimensions - we needed to define a process for each. These processes had to identify baseline metrics  that lent themselves to comparisons between ICD-9 and ICD-10, also involving our overall approach, testing information and success criteria. In addition, any process we developed had to be clearly defined, measurable, driven by the business and agreed upon by senior leadership.

While this entire effort took time, we knew that one particular aspect of it, the testing, would require more attention than the others.

Testing is key

What we realized early on was that no matter how often we (as a payer) would test and evaluate claims, we could not accurately replicate a claim received from a healthcare provider. Similarly, the healthcare providers knew what code they wanted to send us, but they couldn't accurately predict our response. We knew that the only way to get that information was to bring all the parties together and have them compare data and test with each other. As a result, testing neutrality becomes a coordinated effort among multiple entities.

Overall, the neutrality work stream has taken us more than a year to develop, and the work will continue well into 2013. It's a big change from where we started, but as we learn more, we are becoming able to better focus our work efforts and keep reaching for better outcomes.

Work like neutrality may seem difficult or challenging, especially at first, but if we all can work together and avoid major system disruption, it will be worth it when it's done.

About the Author

Dennis Winkler is the Technical Program Director of Program Management and ICD-10 for Blue Cross Blue Shield. He is responsible for ICD-10 program direction and is the IT business partner for Medicare Advantage. Dennis graduated with distinction from the University of Michigan's Ross School of Business. He spent his first 11 years of his career with Anderson Consulting (now Accenture); specializing in large, complex system development projects. Winkler joined BCBSM in 1998 and since has been responsible for leading major enterprise programs including HIPAA 4010 implementation, Social Security Number elimination and the National Provider Identifier initiative, among others.

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Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.