September 17, 2013

New Series Explores I-10 Doomsday Scenarios

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Popular culture is rife with doomsday scenarios for the end of the world, ranging from televangelist Pat Robertson, who predicted the end of the world in the 1980s, to the Heaven’s Gate cult followers in San Diego, who predicted of demise of the world when the Hale-Bopp comet appeared and they subsequently committed suicide.

 

Could there be a possible doomsday scenario in store for healthcare providers when, at the stroke of midnight on Sept. 30, 2014, all their systems are not fully in place for the mandatory conversion to ICD-10? Could there be a ripple effect when claims are rejected, revenue from reimbursement slows and cash trickles and doesn’t flow?

“We have been concerned that a number of providers will not be ready and will not have all their systems in place — fully tested — by Sept. 30,” Chuck Buck, publisher of ICD10monitor, said. “Sure, there is a group that I call A students, namely the major health systems and teaching facilities, that seem to be on schedule, but then there appears to be quite a few C and D students, and that is what is concerning.”

“Because of enormous financial implications riding on the successful implementation of ICD-10, we wanted to explore ‘what-if’ scenarios from the perspective of a chief financial officer,” Buck added. “We asked Gregory M. Adams, a former hospital CFO, and, most recently, the national chair for the Healthcare Financial Management Association, to develop a ‘what-if’ series for Talk-Ten-Tuesdays.”

Entitled “After Midnight,” the series, which debuts today on Talk-Ten-Tuesday at 10 a.m. EDT, will focus on systems integration.

“The subject of system integration will ask this: What if your multiple information systems (HIM, PFS, lab, ER, radiology, QA, etc.) are not able to handle changes resulting from the transition to I-10?,” Buck explained. “Adams will report that on top of this, not only do the systems need to be modified individually to accommodate ICD-10, but the various interfaces between each system have to work too, and this will require extensive system testing.”

Other subjects in the series include the following:

  • Organizational education: Primary (coders), secondary (registrars), tertiary (billers), user employees, independent practitioners, ACO partners.
  • Value-based payments: Bundled payments, shared savings, capitation, etc.
  • Quality and clinical outcomes: Measuring quality improvements under different coding systems.
  • Healthcare analytics: Validity and consistency of data, data management, population health, etc.
  • Evolution of care model: Shift from IP to OP and preventative care, along with the coding implications for OP care.

Here’s how Adams, now the president of the consulting services division of Panacea Healthcare Solutions, is expected to explain the overarching financial implications that these doomsday scenario portend:

Revenue

If coding is inaccurate, it can impact quality metrics, resulting in reductions in revenues (payment denials) due to incorrect quality metrics. If there’s the perception of poor quality, that in turn can reduce revenues through loss of contracts with payers. The complexity of ICD-10 coding may delay coding, which, in turn, delays billing.

Cash Flow

If internal IT systems are not interfaced properly, billings can be delayed, reducing cash flow. If external systems (claims scrubbers, billing vendors, etc.) are not prepared, billings will be delayed. If payers are not prepared, payment for claims will be delayed.

Access to Capital

Providers should be proactive in increasing sources of working capital (lines of credit, letters of credit, receivables financing, etc.) now, before they need it. As a result of poor profitability (due to reductions in revenue) and poor cash flow (per above), lending institutions may be hesitant to provide access to capital.

“Adams will explore these problematic areas that must be addressed before the stroke of midnight on Sept. 30, 2014,” Buck said.

 

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.
Mark Spivey

Mark Spivey is a national correspondent for ICDmonitor.com who has been writing on numerous topics facing the nation’s healthcare system (and federal oversight of it) for five years.