March 28, 2016

Survey Says: “Mostly Good News” for Providers Transitioning to ICD-10

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They were three simple words that surely represented a collective sigh of relief among the several dozen providers to participate in a recent AppRev survey comparing hospital financial metrics of the last quarter that ICD-9 was in use with those of the first quarter of ICD-10.

“Mostly good news,” AppRev President and CEO Seth Avery said during last week’s broadcast of Talk Ten Tuesdays, ICD10monitor’s weekly Internet news broadcast.

Results of the study were first shared during a HFMA meeting on Monday, March 21 before Talk Ten Tuesdays listeners heard more the next day, Avery noted.

Calling it a “look back” at the ICD-10 implementation that took place on Oct. 1, 2015, Avery said that approximately 40 hospitals had responded with data.

“The results of this study will assist hospitals in understanding how ICD-10 has impacted their denial rate, along with other financial metrics, and allow them to compare them to similar facilities,” Avery said. “Working with several of our hospital customers, we developed a simple set of metrics to start the discussion on ICD-10’s impact.”

Those metrics included days’ cash on hand, discharged-not-final-billed (DNFB) cases, net days in accounts receivable, and initial denial reasons such as authorization and medical necessity.

“When we looked at the results for days’ cash on hand, whether it’s a surprise to you or not, it was interesting to (us to) find that we saw almost no change across all hospitals,” Avery reported. “Results for the discharged-not-final-billed showed a small spike in October, but by December (they) had returned to pre-ICD-10 levels. Many of the experts we talked to expected a larger backlog in the coding increase that would drive DNFB.”

Similar results were seen in days cases spent in accounts receivable and authorization denials. But it wasn’t all good news.

“This was an entirely different story,” Avery said of medical necessity denials. “(They) were up across the board, with several hospitals reporting as much as doubling of these denials.”

Avery attributed that trend in part to errors associated with national coverage determinations (NCDs) and local coverage determinations (LCDs). The AppRev CEO, who has worked in the industry for 25 years and is a certified coder himself, also noted that the positive news regarding the other metrics could be attributed in part to “cooperation between providers and payors in transitioning authorizations that originally were granted in ICD-10 … (and) allowing them to still be valid after Oct. 1.”

Avery further noted that AppRev will be publishing articles on the survey results on its website, www.apprev.com, and also continuing to take a closer look at how the transition to ICD-10 has affected providers.
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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