Monday, November 14, 2011

ICD-10 Financial Neutrality – Questions and Comments

As someone once said: “$#!& rolls downhill and is occassionally thrown back up.” How do you think the ICD-10 mandate will impact your organization? Will you be uphill, downhill, or tossing it back and forth with your business partners?

Considerations for Both Payers and Providers

It doesn’t matter if you’re a payer, an institutional facility or a physician, you WILL BE IMPACTED by ICD-10 in less than two years. All constituents – payers, facilities and professionals have skin in the ICD-10 mandate.

1. Y’all need to understand the Medical Concepts, Clinical Scenarios, Contracting Agreements and how Patient Benefits are impacted by the ICD-10 mandate.

2. How do you independently verify and validate (IV&V) that your business processes and IT systems have been appropriately remediated?

3. Where are your vendors in their process to remediate the software you bought from them? What do you need to make yourself comfortable with their progress and official delivery dates? Assuming they’ve stated anything solid?

4. Do you have a plan to edge-test your major business processes to confirm your integration points will work as expected?

5. What does “operational neutrality” mean to you and how will it impact your financial neutrality? See here for a previous post about Operational Neutrality.

Considerations for Payers
Understanding ICD-10’s impact helps payers and large self-insured employers redesigning their medical policy, benefit plans and payer contracts; and – if payers have some level of transparency, should help providers anticipate and plan for potential shifts in reimbursement.

1. How are you going to handle translation of claims with 10-codes into 9-codes for your data warehouse and analytic reports?

2. Should you use native processing of both code sets? Or should you use crosswalk? How might a ‘purpose-built’ map based on a combination of native processing and crosswalks be your best remediation approach?

3. Whichever approach is followed, what methodologies and techniques will help ensure enterprise-wide consistency?

Considerations for Providers
The provider side is still governed by medical necessity and appropriate documentation to support diagnosis coding. Since ICD-10 allows for greater specificity - in theory - providers who care for the sickest - and do a good job - may see their reimbursement increase – if they get the coding right.

1. How can you mitigate potential revenue impact to existing contracts that include diagnosis or diagnosis-related components?

2. How will your ability to properly code your services increase your reimbursement levels under the inevitable pay-for-performance and quality-based programs being bandied about?

3. Have you identified the top 10-20 diagnoses you service? By dollar amount and volume? How might some effort to model these outliers under the ICD-10 scenario help you understand where your revenue will be impacted?

In another post I’m going to offer up some approaches and ideas I’ve learned and developed that can help payers and providers perform the financial and operational modeling to help them gauge the impact of ICD-10 on their bottom line.

For more information on ICD-10, you can follow me on Twitter @ShimCode. You’re also welcome to link up with me.

How can I help?
Steve/ShimCode

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