November 14, 2011

ICD-10: Assessing Readiness to Avoid Revenue Disruption

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The best-prepared healthcare organizations are those that actively are assessing and interacting with their affiliates to ensure readiness for the upcoming ICD-10 transition.

For payers this means all affiliates, not just those that submit directly. For providers this means your internal departments, staff and all of those affiliated with your institution. The reason is simple: it is in no one’s best interests to see claims and billing process disrupted at the time of transition. Assessing readiness is the first step in that process, and it should extend to tracking progress and taking action when problem areas are identified. This is the only way any organization can ensure a successful transition that does not affect revenue adversely.

Testing is Critical

Most payers have affiliates that submit claims directly and others that submit through clearinghouses. Since testing will be critical to a successful transition to ICD-10, this rightfully is getting a great deal of attention. For 5010, testing can be limited to those that submit claims directly; however for ICD-10, it will be necessary to test with all affiliates, including those that submit through clearinghouses. One large payer told me that they have 10 times as many providers who submit though clearinghouses. It is this increase in the scope of this task that garners significant attention.

Affiliate Engagement

However, payers have more than just testing with which to deal. There are three major components to affiliate engagement:

  • Communication: Any complex process like the ICD-10 transition requires extensive communication. Recognize that you will need to make it easy for people to get information they need. Using a combination of e-mail and online resources will be essential to make sure that people are alerted to new information and have easily identifiable places to get any necessary policies, procedures, forms and the like.
  • Testing: Testing is the core of the transition process. Ensuring the accuracy of the content of electronic transactions is essential. That is why payers need to work with all of their providers, not just those that submit directly. Again, this will represent a much broader effort than the 5010 Level II compliance testing currently in progress. Several payers have told me they want to begin testing as soon as possible because they recognize that time will be needed to fix problems and retest. This will mean a great deal of interaction with providers to identify issues and track these tasks to completion.
  • Business Issues: Contracts will need to be updated to account for ICD-10. Payers will experience a substantial surge in terms of document flow with all of their affected providers. Setting up a system to track status will be essential.

People and Systems

The most significant source of complexity for providers is that ICD-10 affects people as well as systems.  Coders, physicians and other staff must be trained, and it is critical to monitor and track their progress, as revenue neutrality will depend on these people. Payers recognize that it is in their interests to ensure that their provider affiliates are ready, and institutions should treat their own affiliates the same way. If your physicians have severe problems at the transition, it will have an adverse effect on the hospital even if the physicians are not employees. Hospitals must be in a good position to assist when appropriate and maintain a vested interest in their affiliates’ success.

I have heard concerns about how Stark Law may affect this process. At a minimum, hospitals and other providers need to understand where their affiliates stand in terms of readiness. This will be essential for hospitals’ abilities to develop their own plans, including contingency plans.

Ultimately, testing will be critical to ensure a successful transition. As WEDI notes:

“External testing may involve coordinating with a large number of entities. Careful planning is needed to ensure that there will be adequate time for testing, remediation and re-testing with trading partners.”




You will need to exchange a great deal of information with your affiliates, ranging from test data to contracts to training status. Both payers and providers recognize that this has the potential to be one of the most labor-intensive processes connected to their respective ICD-10 programs.

About the Author

Hugh Kelly is the
 Vice President of Marketing and Sales for Avior Computing. 

Mr. Kelly has more than 20 years in the software and technology business at organizations ranging from start-ups to publicly traded companies. Mr. Kelly has been involved in all aspects of marketing and sales, with considerable focus on channel development.  During his executive tenure, his organizations have raised over $200M in external capital.  He is a venture partner at Ascent Ventures.

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