June 6, 2011

Don’t Miss the Opportunity to Think Strategically about ICD-10


The compliance deadlines for 5010 and ICD-10 are approaching rapidly – Jan. 1, 2012 for the adoption of the Version 5010 legislated processing requirements and Oct. 1, 2013 for the ICD-10 code set changes. While HIPAA industry participants legally are required to switch to ICD-10, the mandate offers an opportunity to think about ICD-10 as more than a coding initiative and use it as a catalyst to implement process improvements that can impact profitability.

Organizations may be inclined to look to do the bare minimum in the face of government mandates to ensure compliance. On its own, ICD-10 will not change how care is documented nor how it is delivered. As organizations prepare for ICD-10, they should look beyond the mandate and consider the opportunities and strategic value created by the legislation. Using this time to develop a comprehensive assessment and strategic plan will help identify risks as well as opportunities for improvement.

An assessment is a critical component of plan development to ensure that ICD-10 delivers value and not just a change in how medical encounters are coded. By documenting current conditions and focusing on desired benefits from system upgrades and process changes, healthcare organizations can choose to promote better disease management, better reporting and analytics and streamlined claim processing procedures.

Strategic Considerations for Assessments

When developing a strategic plan, it’s important to get key stakeholders involved in order to offer a broader perspective on the potential scope and impact of the plan. This is because changes can have financial impact and affect operations and systems. With assistance from executive leadership, one of the first things to consider in moving to ICD-10 is whether your approach will be tactical (simply complying with the government mandate to use the new code set) or transformational (helping to improve processes and realize value beyond compliance).

Transformational process improvements involve modification of all processes and system touch points. The project also may involve interdependencies with other initiatives such as implementation of EHRs, consideration of how accountable care organization strategies are impacted and developing or changing system structures.

An assessment delivers value in plan development because it identifies strengths and weaknesses, enabling organizations to create a roadmap for the future. It also allows organizations to develop a multi-year plan for compliance and improvements.

Rather than thinking of ICD-10 adoption as a nothing-to-gain project, organizations should challenge themselves to find the return on investment in operations to fund the adoption plan and other initiatives. For executive leadership, it is critical to understand the magnitude of the change beyond a code set upgrade.

For example, CFOs need to be aware if there are shifts in payments and responsible parties in healthcare. They need to understand the impact as well as the effects of quality-based payment plans. They need to understand the risks involved in the ICD-10 adoption project and agree to support the opportunities that have upside potential while also demanding reporting on the potential financial impact to cash flows, pay-for-performance plans, bundled payments, payer contract terms and more.


CIOs need to evaluate and understand the complexity of technology issues in order to provide insight into changing systems, interoperability, testing timeframes and other system considerations such as natural language processing, documentation improvement programs and computer-assisted coding applications. Because changes in these systems potentially can affect both clinical and administrative practices, the CEO needs to understand data in order to drive greater analytics to support the strategic plan of the organization. He or she also must take advantage, to the greatest extent possible, of all the opportunities available with the new code sets.

Key steps to be taken when preparing for an assessment include:

*Evaluate current financial conditions and limitations to prioritize investments and inform decision-making.

*Garner input from the payer community to gather insight into rates and reimbursements in order to understand how commercial payers are changing their systems. This is critical because it can have a significant impact on an organization’s financial health and profitability.

*Think about the long-term impact of ICD-10 on coding staff and productivity. Will implementing sooner rather than later and having a strategic plan of action help avoid a dip in productivity during the transition or after Oct. 1, 2013?

*Take into account the impact of computer-assisted coding and how it will affect staff. Will coders need additional training to develop the skills to become auditors of automated processes?

*Make decisions now regarding new systems so your organization will have sufficient time for budgeting, procurement, implementation and testing. This also ensures that when a system change is necessary, your organization will not get closed out from working with a vendor of choice due to capacity constraints.

The Value of Outside Insight

Completing assessment work can be done with internal or external resources. The value of outsourcing the assessment is that you might uncover details you otherwise would miss. An outsourcing partner will have amassed experience from working with multiple clients and can share insight on industry best practices.

An outsourcing partner also will provide an independent view of the organization and ask key questions that internal representatives may overlook (or be too close to the information to identify as areas of improvement). As with any type of widespread organizational change, good change management processes are essential for success. Outsourcing can provide expertise in change and transition management to support adoption of new processes and systems.

While some organizations may have sufficient resources to conduct a strategic assessment on their own, this still shifts their focus away from core business priorities. Working with an outsourcing provider frees internal resources for other work.

Establishing a baseline assessment with a strategic view is a critical starting point in implementing a successful ICD-10 adoption plan. A strategic assessment will help healthcare organizations in developing a strategy, evaluating risks and prioritizing tasks before the impending deadline.


By identifying change opportunities early in the process (even now is almost too late) and thinking strategically with ICD-10, organizations can go beyond the legislated coding mandate to implement the new code sets and support strategic initiatives that will have an impact on the bottom line.

These initiatives should include validating coding and documentation processes for maximum compliance accuracy, revamping systems to take advantage of new technology, and monitoring system changes for compliance made by business associates such as payers, vendors and billing partners.

About the Author

Veronica Hoy, MBA, is vice president of SOURCECORP HealthSERVE Consulting, Inc. Veronica has been an operating executive for 10 years, focusing on providing strategic leadership and direction to healthcare professionals and organizations. She has more than 20 years of healthcare experience in business process outsourcing, accounts receivable management, coding, billing, release of information, consulting and systems implementation.

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Read 114 times Updated on September 23, 2013