July 18, 2016

Report Shows Little Financial Impact from ICD-10 Implementation

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Last fall’s implementation of ICD-10 throughout the nation’s healthcare industry did not produce the dire financial impacts many had feared, according to new data recently unveiled by Crowe Horwath LLP.

“The conversion … was expected to have far-reaching effects. Anticipated impacts included delays in billing and coding, the potential for increased payer denials and accounts receivable (AR), and the possibility of decreased cash collections for healthcare providers as a result of these effects,” the company said in a June 28, 2016 report posted to its website. “However, new data shows the Oct. 1, 2015, conversion minimally impacted (those metrics).”

The new data came from Crowe Revenue Cycle Analytics (Crowe RCA), a benchmarking system that compiles and organizes a daily feed of transactional-level data from the patient accounting systems (PAS) of nearly 600 hospitals. These reports outline findings based on an assessment of key performance indicators (KPIs) related to billing and coding, AR, and denials, the company explained.

The updated data covers the time frame extending from implementation through March 31, 2016. And while the impacts for the aforementioned metrics were described as “minimal,” it wasn’t all good news.

“There were delays in inpatient billing and coding. This resulted in a 10.1 percent increase in inpatient discharge and not final billed (DNFB) days from October through December 2015, compared to the same period a year earlier,” the report read.  “Although inpatient DNFB days in January 2016 were only slightly elevated from the January 2015 level, average DNFB days for February and March 2016 continued to deteriorate and were 6.2 percent higher than the average levels from the same months a year earlier.”

The data also showed an increase for a significant number of hospitals in denial claim adjustment reason code 11, which indicates that a diagnosis is inconsistent with a procedure.

“Providers need the tools to perform root cause analysis and understand (that) the true financial impact of denials to their organization, beyond assessing trending by payor and denial category,” said Brian Sanderson, managing principal of Crowe Healthcare Services. “Prioritizing denial prevention efforts depends on accurately calculating the financial impact, including the resource costs of resolving existing denials and preventing future denials.”

For more information or to download a copy of the Crowe RCA Benchmarking Analysis, go online to www.crowehorwath.com/benchmarking-release.

About the Crowe RCA Benchmarking Analysis
The Crowe RCA Benchmarking Analysis includes 597 distinct hospitals classified as acute, critical-access, rehabilitation, psychiatric, or cardiovascular care facilities. The database contains information from hospitals in 42 states, with 20 or more facilities represented in Colorado, Florida, Illinois, Indiana, Kansas, Kentucky, Ohio, South Dakota, Texas, and Wisconsin.
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. 

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