May 14, 2013

Payers Start to Get “Testy”

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Perhaps the most intellectually challenging aspect of ICD-10 implementation is trying to determine how, when, what, and with whom to test. Most ICD-10 teams spend a lot of time identifying test strategies and arduously planning various aspects of testing.

Testing is critical because it is quite apparent that ICD-10 could cause a major disruption to claims’ life cycles, resulting in claim rejections, claims being processed incorrectly, incorrect payments, etc., also causing cash flow disruption. In order to avoid this, it is imperative for payers to test with as many providers as possible (and for providers to test with as many payers as possible).

Many industry groups espouse a form of testing often referred to as scenario-based testing as an optimal way for providers and payers to test collaboratively. Scenario-based testing generally involves the development of medically relevant scenarios that are given to providers to code in ICD-10.

The scenarios are based on real-world claims that previously have been coded and adjudicated in ICD-9. The ICD-10-coded claims can be adjudicated and the results (Did the claim process properly? Did the claim wind up pending? How did the claim price?) can be compared to the ICD-9 adjudication results. Scenario-based testing provides several benefits, including:

Examples of actual data and real-world scenarios;

  • Streamlining of processes to allow providers and payers to collaborate;
  • An increase in the likelihood of trading partner engagement; and
  • The avoidance of risk associated with using PHI during testing.

Several of our payer clients are moving forward aggressively with scenario-based testing processes, and providers can expect to be recruited to participate in such processes in the coming months. For professional (non-facility) providers, you can expect to see invites to websites that will allow you to view one or more scenarios (based on specialty) that contain a series of narratives, with the narratives describing actual medical encounters. You will be asked to enter the appropriate ICD-10 code(s) for each narrative and to submit the entire scenario for processing. The payers then will run back-end processes to adjudicate the inputs and to determine the accuracy of your responses and impacts on pricing.

Facility providers likely will see a slightly different approach. For facilities, the payers will collaborate with their larger providers to agree on specific claims of mutual interest (based on volumes, cost, etc.). The facility providers will re-code the agreed-upon claims in ICD-10 using the existing medical records. The providers will use a website or file-transfer mechanism to upload the re-coded claims for processing and the payers will group the claims to determine any potential issues (pends/suspends/DRG shifts, etc.).

Providers should be prepared to participate in scenario-based testing as their payer trading partners start to engage with providers in the coming months. In the pursuit of revenue and operational neutrality, scenario-based testing should provide an accurate view of the potential impacts of ICD-10.

We would encourage providers to take these efforts seriously, and to allocate appropriate coding resources to code/re-code narratives and/or historic claims.

About the Author

John Wollman is the Executive Vice President of Healthcare for HighPoint Solutions, a Management and Information Technology consulting firm focused on Healthcare and Life Sciences.  John is responsible for HighPoint’s Healthcare industry group, catering to Payers and Providers.  John is a recognized expert in several healthcare business domains (Reform, HIPAA 5010, ICD-10, Platform Strategy) and technical domains (Master Data Management, Analytics).  Since graduating from Duke University, John has held executive level positions at consulting and technology companies over his 25 years in business.

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Read 64 times Last modified on September 23, 2013