Updated on: November 21, 2016

Planning for ICD-10 While Addressing Critical Industry Trends: Part 1

By Ken Bradley
Original story posted on: April 27, 2015

In the 1990s, health systems began tackling the game-changing implementation of technology such as hospital information systems (HIS) and the earliest electronic health records (EHRs) to automate administrative and business processes. In the early 2000s, they prepared for HIPAA regulations and developed strategies to reduce medical errors, again with the help of technology systems. Now, in 2015, our industry is addressing a host of new trends and demands. Most of these directly result from healthcare reform and the technology needed to meet its requirements, which is changing nearly every facet of healthcare delivery.  

In this three-part series, we’ll look at three top trends and challenges faced by today’s healthcare leaders: patient collections, value-based reimbursement, and collaborative care. We’ll examine how these trends will be impacted by ICD-10 and vice-versa – and how you can proactively tackle associated challenges in a way that will propel you toward success.

Patient collections would likely be a provider concern even in the absence of healthcare reform; however, the passage of the Patient Protection and Affordable Care Act (PPACA) has certainly made it more challenging. Financial responsibility of patients is rising on all fronts and across all types of insurance plans. In fact, research has shown that 30 percent of a healthcare organization’s revenue now comes from patients versus insurers. According to the 2013 census, 15.5 million Americans have high-deductible health plans. The Kaiser Family Foundation indicates that the average deductible for all employer-sponsored health plans increased 47 percent from 2009 to 2014. The millions of newly insured Americans under the PPACA face high deductibles, too: the average deductible for an individual Bronze plan is nearly $5,200.

The bottom line: As the cost of healthcare rises, patients are taking on a larger portion of these expenses. Factors such as the economy, individual financial difficulties, and attitudes regarding medical bill payment, or even unfamiliarity with health insurance, can make patient collections especially challenging. With ICD-10 and insurance market changes quickly approaching, optimizing patient payments becomes an even more vital strategic initiative due to two factors:

  • Claims payments may be delayed during the initial ICD-10 transition, which can translate to sluggish cash flow and lost revenue. Based on studies authorized by the Centers for Medicare & Medicaid Services (CMS), rejections and denials may increase by 100 to 200 percent following the ICD-10 transition date. This represents a substantial increase, which is why ensuring and maximizing patient collections can help keep your organization financially healthy during this critical period.
  • Staff must be completely aware of patient benefits coverage, responsibility, and participation in payer networks prior to ICD-10. Collecting from today’s patients requires new, automated, more proactive processes. By better understanding patients’ benefit coverage and leveraging tools to provide estimates for care at the time of service, staff can improve patient collections and ensure accurate payments by payer networks. The time to implement payment changes is now. All staff, especially your front office, will need time to get accustomed to new activities. On the other hand, they’ll probably be able to stop engaging in time-consuming activities such as sending statements, fixing payer errors, and posting payments that arrive via mail.

You may be thinking “we don’t have the time to change our patient collections process before ICD-10,” but consider this: Today’s best practices from industry experts are well-documented with proven processes coupled with mature and improving advances through widespread adoption of technology and standards. Adoption of these best practices has proven to be cost-effective and produces better results, also giving staff more time to spend on other revenue-producing activities.

The following three steps can help increase and accelerate payments in any situation, but they’re especially important in light of the impending ICD-10 transition:

  1. Automate eligibility – By automating the eligibility process, you’re giving front-office staff the tools they need to verify eligibility, provide a written estimate for patient signature, and either collect payment or make arrangements for future collection (for example, through a recurring payment plan or online payment portal). You’re also eliminating the errors and delays inherent in a manual eligibility check. Especially with CMS’s estimation of drastically increased denials and rejections during the initial period following the ICD-10 transition, having accurate data can help ensure clean claims. Eligibility also will provide details about what is covered, helping providers avoid costly denials.

  2. Collect at time of service – Aside from collecting co-payments, many organizations don’t make it a priority to review patient financial responsibility and take payment (or make arrangements for future payment) at the time of service. Because providers may be faced with a reduction in claims revenue during the initial ICD-10 transition, collecting patient payment at the time of service is important to your organization’s financial health. If the patient will owe more than a co-payment, ask to place his or her credit card information on file to be charged up to the amount of the estimate. Most patients, especially when they understand the security measures protecting their card information, do not mind this practice. 

  3. Offer automated payment plans – Through automated payment plans, the patient agrees to be billed for a predetermined amount until his or her balance is paid in full. The credit or debit card provided is charged at agreed-upon intervals, without any further action required. This type of payment plan ensures that the bill is paid in full without requiring any additional work from busy staff. Especially during ICD-10 implementation, staff will be busy coping with a myriad of changes. Taking post-service collections off their plate can give them more time to focus on the important ICD-10 tasks at hand.

When evaluating what can go wrong with ICD-10, a cash flow problem tops every provider’s list of concerns. Putting technology and processes in place to increase and accelerate patient payments can set up your organization for long-term financial health while helping sustain your cash flow in October 2015.

About the Author

Ken Bradley, vice president of strategic planning and regulatory compliance and one of Navicure's founding members, is responsible for assessing markets, monitoring government regulatory requirements, and providing competitive analyses to develop strategies and solutions that ensure Navicure’s and its clients’ continued success in an increasingly complicated business environment.

He is responsible for all Navicure industry transitions, including ICD-10 and 5010. He has given educational presentations and written several articles on 5010 and ICD-10.

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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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