December 7, 2015

ICD-10 Impact on a Hospice: A Case Study

By Suzi K. Johnson, MPH, RN


Here are some lessons learned over the last year as we have prepared for an organization-wide approach to implementing ICD-10 across a very large health system in San Diego.

There are three specific areas that should be considered when  implementing a new coding process for hospice programs, which went into effect for all claims billed as of Oct. 1, 2015:

        1. Historical perspective
        2. Preparations for ICD-10 and compliance risks
        3. Operational considerations

Historical Perspective

Based on Centers for Medicare & Medicare Services (CMS) claims data, there has been a lack of consistency in the identification and coding of hospice-appropriate diagnoses, ranging from cancer to dementia and everything in between. Over the last 10 or more years, among Medicare beneficiaries there has been a shift on claims/billing to non-cancer diagnoses, specifically towards neurological disorders such as dementia and nonspecific terms such as “debility” and “adult failure to thrive.”  These terms quickly made their way to the top of the most common hospice diagnoses on claims, per CMS.

Additionally, some hospice programs were still behind the times by not having an electronic health record system in place, impeding progress towards compliance and reliability.

That being said, Oct. 1 has come and gone, and all hospice programs are required to comply with federal regulations.

Preparations for ICD-10 and Compliance Risks

Identification of roles, responsibilities, and coding authority of hospice staff has been of the upmost importance, especially in consideration of the issues previously discussed. Several strategies support correct coding, as several touch points exist in determining the correct hospice diagnosis. The initial touch point to coding begins with the intake process, and cases ultimately advance to the hospice admission nurse, eventually requiring the review and input of the hospice medical director for the final say. Increased communication between all hospice team members is required to ensure that the most appropriate ICD-10 code finds its way to the final billed claim.

In addition to the hospice diagnosis, another complicating factor is the requirement to list all diagnoses on the claim, related or not. This new requirement is adding a significant amount of utilization review of the clinical record to ensure accuracy and compliance. Hospice programs may need to consider hiring a trained and certified ICD coder to mitigate compliance vulnerabilities and risk presented by failing to code correctly and accurately.

Operational Considerations

Now that October has passed and hospice programs are close to dropping their first claims with the new ICD-10 requirements, astute administrators will have developed a contingency plan in case claims are rejected and/or denied for incorrect coding. The risk of reducing cash flow is high, the potential for lower productivity is high, and the risk of an unwanted organizational burden looms as hospice administrators learn the nuances of a new coding process. Hopefully, hospice agencies have taken the time to a) understand the new regulations; b) implement a proactive stance by preparing months in advance; c) practice in a test environment; d) train the staff well; and e) submit clean claims to Medicare.

About the Author

Suzi K. Johnson currently serves as the vice president of Sharp Hospice and Palliative Care, a program of Sharp HealthCare, located in San Diego, CA. Her responsibilities include strategic planning, business development, operational oversight, community outreach, and philanthropy.

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