Updated on: February 6, 2017

ICD-10’s Impact on Critical Access Hospitals

By Janelle Ali-Dinar, PhD
Original story posted on: November 9, 2015

It has only been a month since ICD-10 has officially been implemented, and there is clearly much at risk for rural health entities that deliver healthcare services for more than 72 million people.

I believe that at least half of the more than 1,300 critical access hospitals (CAHs) and 5,000 rural healthcare (RHC) programs have been proactive over the course of 2014, when ICD-10 initially was going to be implemented.

I further believe that Nebraska, where I reside, has been particularly diligent and proactive via a variety of cross-functional trainings and plans. The plans I am referring to entailed coding education, batch testing, ongoing education offerings, a needs assessment plan, a financial risk mitigation plan, leadership physician engagement, and support training for physicians, as well as CEO consistent communication, rounding, managing up, and building team accountability. 

The two critical areas in which ICD-10 is impacting cash flow are:

  1. Lack of accuracy creating denials; and
  2. Lack of ongoing leadership and training support for physicians.

So, recognizing that there isn’t much financial room for margin of error, if I were to put my CAH CEO hat back on, for me success in ICD-10 boils down to strategy and sustainability in six key areas:

  1. Coder productivity – cross-matching between ICD-9 and ICD-10 and the time it takes to accurately provide this reconciliation process is key. Cross-training is also an important element for accuracy/checks and balances and building more robust team support.
  2. Physician documentation, so that queries and denials aren’t encountered. 
  3. IT errors; make sure that electronic medical record (EMR) and billing software are in sync.
  4. Addressing payor issues, revenue cycle, and cash flow – CEOs and CFOs have been addressing all areas necessary operationally to increase cash flow to cover up for an additional 90 days on top of normal expected reserves. Other steps to consider: shore up billing processes and back-office errors, establish a line of credit (LOC), work with vendors for payment arrangements, and create foundations for assistance when and where appropriate based on business designation.
  5. Working with governance structure – connect the board of directors and/or board of trustees in communication and support with on-the-ground staff so that they can better understand the changes that ICD-10 potentially could have on cash flow, cash reserves, physician engagement, training, and potential increases in vendor charges, as well as community communication, including patient feedback impact.
  6. Assessing models to see if ICD-10 is even appropriate for physician, patient, and cost structure needs – some providers are looking at a direct primary care (DPC) model, for which ICD-10 wouldn’t have to be implemented because you aren’t coding from reimbursement. Physicians are beginning to show interest in this in 15 states already. They don’t want to feel encumbered by the codes and demands and just want to practice medicine. 

On a final note, I think there has been excellence in early training support via conferences, webinars, and other online and tool kit resources via six key institutions:

  1. The National Rural Health Association (NRHA)
  2. State rural health associations (the Nebraska Rural Health Association hosts several webinars, holds a mid-year conference for ICD-10 training/preparation, and publishes a monthly newsletter) and RCH constituency groups
  3. State offices of rural health
  4. State hospital associations (CAHs are members)
  5. FLEX and SHIP monies for programmatic activities supporting ICD-10 readiness, as appropriated via Congress.
  6. Critical access hospital networks and ICD-10 task forces that help providers cross-train and problem-solve.

Time will tell about overall positive or negative impact of ICD-10 implementation, but in the meantime there are some especially vulnerable CAH and RHC operations to monitor and support.

Advocates like myself and others at HSC are on board to help address immediate needs and best support other passionate healthcare leaders so that the rural sector doesn’t just survive, but thrive.

About the Author

Janelle Ali-Dinar, PhD has more than 15 years of experience as a chief executive offier, chief operations officer, and vice president and regional executive working within the ranks of multi-billion-dollar health systems, and 10 years of experience in rural healthcare. Appointed to the National Rural Congress via the National Rural Health Association/NRHA in 2013, Dr. Ali-Dinar is a frequent visitor to Capitol Hill. She is a frequent national speaker and panelist addressing a variety of rural health topics.

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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.

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