October 19, 2015

Build an ICD-10 Rapid Response Team for Revenue Emergencies

By Warren Hansen

Now that ICD-10 is a reality in U.S. healthcare, providers are finding that Oct. 1, 2015 didn’t bring with it the doomsday scenario they thought it might – but they also know that ICD-10-related challenges that aren’t apparent now may manifest themselves in the coming months. 

The latest data from the Workgroup for Electronic Data Interchange (WEDI) showed that larger providers felt confident they would be ready for ICD-10; readiness, however, is a subjective term. No doubt most providers were ready to submit claims, but anticipating the denials and payor preparedness yet to come constitutes another level of readiness. 

ICD-10’s enhanced coding guidelines could lead to a higher incidence of denials due to coding errors. What is more likely is that ICD-10’s greater granularity will result in lower reimbursements if documentation doesn’t provide adequate detail to justify higher-severity coding and DRGs. 

Providers that were truly ready for ICD-10 have conducted end-to-end testing. This means they have submitted claims both based on ICD-10 documentation guidelines and native coding in ICD-10 and have received adjudicated claims from payors. They have analyzed coding effectiveness and clinical documentation adequacy, and where they found gaps, they provided coders with additional training and improved documentation. They found their risks, analyzed them, and addressed them. 

Do you need an ICD-10 rapid response team? For providers that haven’t been able to get to that level of preparation, the risk of significantly decreased cash flow exists. Such providers need a rapid response team watching for coding and documentation gaps and a plan to address those gaps as they are identified. The following are four essential steps that organizations will need to follow to build an effective ICD-10 rapid response mechanism:

First, make sure health information management (HIM) and revenue cycle data are easily accessible. Most organizations tracked and reported their top 25 diagnoses and top DRGs under ICD-9, and they need to be prepared to track and report the same data for comparison under ICD-10. Other important data points to track and compare include accounts receivable (AR) days, cash on hand, discharged-not-final-billed (DNFB), discharged-not-final-coded (DNFC), and case mix index (CMI). Organizations should create a dashboard to track each of these key performance indicators. 

Second, develop a team of experts that can identify risks using data. While a typical command center approach often seen with large rollouts of enterprise systems may not be necessary, having focused teams aware of key indicators of risk is a prudent strategy. Billing experts, knowledgeable coding staff, and denials management experts would be an ideal mix for a rapid response team. Additionally, ensure clear lines of communication with payors to facilitate remediation of unforeseen impacts to revenue. 

Third, determine the thresholds at which the ICD-10 rapid response team takes action. Facilities need to determine whether a metric fluctuation is an anomaly or true cause for alarm. Certain areas, such as claims data, coding audits, and case mix, may need 14-60 days of data to determine whether to take action. Other areas, such as clinical documentation improvement (CDI) queries and denials, may need only a few days of steady differences to identify if a problem exists.

Fourth, determine how the team will respond. With a rapid response team in place, data at its fingertips, and applications at the ready to identify risks, organizations can act in an effective manner. In general, prepare a dedicated workflow pattern to follow once an issue is identified. Identify key accountable individuals with the authority and ensure their ability to manage change.

No matter how rapid, the response must be right. With decision-makers in place,organizations should provide resources to dedicated denial management teams, clinical documentation improvement teams, and coding improvement teams in order to get their revenue back on track.

Rapid responses to manage denials: In the early days of ICD-10, it may be useful for organizations to review their top ICD-9 denial reason codes and the associated CCs/MCCs, and monitor these daily for trends of increased denials. A mix of people, processes, and technology is always in order when it comes to limiting denials. Organizations should ensure that they have adequate staff, efficient processes, and capable technology in place to address increased denials in a timely manner. 

Rapid responses to improve clinical documentation: In a perfect world, all physicians would be up to speed on ICD-10, and CDI specialists already will have worked on high-volume, high-impact DRGs that are affected by ICD-10. If that is not the case, CDI activities can serve as validation to providers about the education they have received. They may fall into old documentation habits, but physician queries and discussions with physicians about documentation concurrent with a patient stay can educate physicians in real time about new documentation guidelines for certain DRGs. 

Rapid responses to improve coder productivity: Coder productivity, typically measured by the number of charts per day an average coder can complete, must be tracked. Most organizations know what their baseline productivity is; if not, it can be calculated easily with data from most coding systems. Some organizations that have prepared for ICD-10 with dual coding saw minimal productivity loss, while others saw productivity hits similar to what was predicted: 20 to 50 percent. The hit to revenue caused by a 25-percent loss in productivity could be significant.

Hiring more staff coders will be difficult at this point, as will be securing contract coders. With the ubiquity of remote coding, organizations are competing regionally, nationally, and even internationally for qualified, experienced coders. One solution is to boot-camp train entry-level coders. Give them the training they need to code the simpler outpatient encounters such as labs and radiology, then shift more experienced coders into more difficult inpatient coding scenarios.

In conclusion, most if not all provider organizations could benefit from maintaining an ICD-10 rapid response group. By continuously analyzing data and deploying resources to plug revenue gaps, providers can remediate ICD-10-related challenges.

At the same time, don’t forget the “blocking and tackling” activities essential to ensuring accurate, timely revenue. One such activity is a documentation and coding review. Organizations should audit 10 to 20 percent of their charts over six months. Why six months? That’s when organizations should start seeing improvements. Another basic activity all organizations should engage in is reimbursement analytics. Comparing revenue by DRG, year-over-year, beginning with October 2015 by comparing it to October 2014, is essential. Doing so will help organizations find major shifts in reimbursement.

About the Author

Warren Hansen is an associate director of provider consulting at Optum 360. Warren was one of the principal designers of Optum’s ICD-10 Consulting solution. His extensive and diverse healthcare background includes IT management, revenue operations, HIM, and project management.

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