Implementing ICD-10 and the New Administrative

1. Implementing ICD-10 and the New Administrative Simplification Standards: A Step by Step Guide for Medical Groups Robert M. Tennant Senior Policy Advisor MGMA Government Affairs rtennant@mgma.org

2. Step One: Understanding the What and the Why of ICD-10

3. Rule Development Timeline 1996 HIPAA includes ICD-10 placeholder 2003 NCVHS hearings 2005 Congressional hearing (HR 4157) 2008 NPRM • January 16, 2009-Final rule October 1, 2013 – Original compliance date for implementation of ICD-10-CM and ICD-10-PCS. October 1, 2014– Revised compliance date for implementation of ICD-10-CM and ICD-10-PCS. No grace period and/or extension per CMS!

4. The ICD-10 Challenge • ICD-10 is the biggest change in healthcare in over 20 yrs • The most significant overhaul of the medical coding system since the advent of computers • Implementing ICD-10 will impact every system, process and transaction that contains or uses a diagnosis code • Major changes of ICD-10 include: • Codes use alphanumeric characters • Combination of diagnosis/symptom codes • Laterality • Expanded potential digits

5. Why Replace ICD-9-CM? • Proponents argue that: • Almost 30 years old (outdated, obsolete codes) • Rapidly running out of space (more so in PCS than CM) • Evolving healthcare data needs • Comparison with international data is hindered • Increased sensitivity when refining grouping and reimbursement methodologies • Enhanced ability to conduct public health surveillance • Decreased need to include supporting documentation with claims

6. Misconceptions About ICD-10 Implementation Only a “back office” and coder issue Only an IT issue My PM and CH vendors will take care of this for me The compliance date now Oct 2014 – there is no rush ICD-10 will have little impact on my business processes There won’t be any impact on productivity or revenue If I ignore it…it might just go away

7. ICD-9-CM vs. ICD-10-CM ICD-10-CM • 3 - 7 digits or characters • 1st character is alpha (all letters used except “U”) • 2nd – 7th characters can be alpha or numeric • Decimal placed after the first 3 characters • 21 Chapters and V & E codes are ‘not’ supplemental • ~69,000 codes ICD-9-CM • 3 - 5 digits or characters • 1st character is numeric or alpha (E or V codes) • 2nd – 5th characters are numeric • Decimal placed after the first 3 characters • 17 Chapters and V & E codes are ‘supplemental • ~13,000 codes’

8. Crosswalks • Mapping codes between ICD-9-CM and ICD-10-CM • CMS General Equivalence Mapping (GEM)-not a 1 to 1 crosswalk from ICD-9-CM to ICD-10-CM • Mappings will be used to: • Convert and test systems and analyze data before and after • Link data in long-term clinical studies • Develop application-specific mappings • Analyze data collected during transition period and beyond

9. ICD-10: Still in Flux? • Of all the HIPAA/HITECH/ACA administrative provisions, ICD-10 is the only one where … • ROI for medical groups is unproven • Provider organizations have consistently raised concerns to CMS regarding cost, timing, alternatives, lack of resources, too much going on • Clinical staff will need to be engaged, trained • Clearinghouses cannot solve all claim issues • Why was the 2013 date moved? • Will Congress act?

10. Step Two: Determine the Potential Impact of ICD-10

11. Critical Impact Area: Changes to Software • EHR / decision support / other clinical systems • Practice management systems • Billing systems • Encoding software • Medical record abstraction systems • Scheduling and registration systems • Accounting systems • Quality management systems • Test ordering systems

12. Impact on Practices • Statistics / research / historical benchmarking • (Longitudinal data captured in ICD-9-CM) • Trend analysis / Utilization management • Disease management • HEDIS • Reimbursement and contracting • Fee schedules / contracts • Proprietary health plan payment policies could require time of service access to plan information

13. Impact Areas • Redesign of superbills (one AAFP test converted a one page superbill into 11 pages when moving to ICD-10 • Form Changes (CMS 1500, UB 92, X12 837, 270) • Workflow-data capture, data usage (claims) • Increase needed in system storage capacity

14. Impact Areas Need for greater coder understanding of anatomy and physiology by staff Transition period Potential for billing delays due to coding backlogs (internal/external) Dual use of ICD-9 and ICD-10 (WC?) Rejected claims (how can the required data be identified post visit?) 14

15. Determining the Potential Impact • Action plan: • Create internal ICD-10 Team (sr management, medical staff, billing/coding, information systems, reporting) • Create a spreadsheet/other way of tracking steps/issues • Identify the impact areas • Prioritize in terms of potential impact to staff, workflow and revenue (consider rating by impact: high, medium, low) • Identify internal and external contacts • Assign internal staff for specific duties

16. Step Three: Build Internal Awareness and Create an Implementation Timeline

17. Building Internal Awareness • Expect push back, especially from physicians (AMA HOD votes) • Explain new timing from CMS • Originally Oct. 1, 2013, now compliance will be Oct.1, 2014 • Explain consequences of inaction! • Potential of higher cost and/or disruption of claims revenue cycle • Potential of not identifying adequate coding support

18. Building Awareness /Establish a Timeline • Action plan: • Educate practice staff on the reality and impact of ICD-10 • Consider peer to peer communication • Create a reasonable timeline, include action steps and assign staff • Collect tools and resources • Include regular updates at staff meetings, internal communications • Network with your colleagues to identify and solve problems

19. Step Four: Conduct an Internal Systems Assessment

20. Conduct an Impact Assessment • Your internal analysis should review: • Practice infrastructure • Computer systems (core systems, key business area applications, non-essential) • All workflow processes that utilize codes • Information management (data, extracts, reports, etc) • Linkages to other business areas and external entities • Documentation issues • Code assignment processes

21. Impact Assessment Questions • Action plan: ask the critical questions • Which vendor applications do we use for these codes? • How are ICD-10 codes currently used in each information system? • What is the current character length specification? • How are the codes entered—are they manually entered or pulled in from another system? • Do we have or do we need to have the ability to maintain and utilize both ICD-9 and ICD-10 data? • Will we have the ability to implement an internal testing process? • Do we need outside help?

22. Step Five: Create an ICD-10 Budget

23. Estimated costs to move to ICD-10 • There are many estimates of the initial and ongoing costs to moving to ICD-10. • Rand Study (2002) • Conversion – $425M to $1.15B • $5M to $40M a year in lost productivity • BCBSA (2002) • Conversion – $5.5B to $13.5B • $150M to $380M a year in lost productivity • Both estimates presented to NCVHS • MGMA, AMA, 9 other organizations, commissioned a new study, released in 2008

24. MGMA Estimated Costs to move to ICD-10

25. Cost to upgrade or replace PM/EHR for a 10 FTE Practice = $201,690

26. Additional Areas of Potential Cost • Project cost (time NOT spent doing other productive activities) • Documentation review (additional person to review? • Mapping cost (consultant needed?) • Additional staff (temporary or contract) or overtime during learning curve • Revenue Impacts of specificity • Denials • Additional documentation production • Loss of productivity – rebills, rejections, EOB work, medical necessity rejections/follow up, coder slow down

27. Developing a Comprehensive Budget • Action plan: budget for the following: • Assessment costs • IT infrastructure (software/hardware) • Contract revisions (legal) • Super bill or other code assignment process • Staff time and clinician productivity losses • Consulting services • Cash flow disruptions and contingencies (line of credit, $ reserves, postponing of capital projects

28. Step Six: Understand the Impact on Clinical Documentation

29. Impact of ICD-10-CM on Medical Record Documentation Detailed medical record documentation is required if coders are to code to the highest degree of specificity Non-specific “unspecified” codes are available to use when detailed documentation is unavailable, but be careful! It is true that a more detailed documentation will result in a more accurate clinical picture and better data…but Expect a 15% increase in documentation time (per AAPC)

30. Impact of ICD-10-CM on Medical Record Documentation • Documentation issues to consider: • Documentation of Additional Symptoms or Conditions • Associated and/or Related Conditions • Cause of Injury • Dominant vs. Non-dominant Side • Remember that coders can only code what they see in writing, in front of them (especially critical if you utilize offsite coders) • Consider workflow implications (post visit)

31. Internal Coding Action Steps Action plan: Evaluate the extent of code changes specific to your specialty Review documentation to assure that it is adequate to support new coding systems Decide what is best approach for code assignment Superbills /book/computer program/App Consider “testing” options: Use old claims and attempt to assign ICD-10 codes Dual code 31

32. Step Seven: Clinical and Administrative Staff Training

33. Staff Training-General Plan • Implement ICD-10 education for impacted staff • Begin by identifying education needs: • Who requires training • What (type and level) training • How should they be trained • Key issue—when should each group be trained? Too early will require re-training, too late it may be difficult to get a slot…recommended timing: 6-9 months before for coders, 3-6 months ahead for physicians

34. Training Action Steps • Action plan: • Wide variety of training opportunities and materials available through professional associations, online courses, webinars, and onsite training • If you have a small practice, think about teaming up with other local providers. You might be able to: • Train one staff person from the practice, who can in turn train other staff members • Hire one trainer for multiple practices • Have a “super user” who can assist multiple clinicians or even practices

35. Step Eight: External System Impact Assessment and Testing

36. Work with your Key Vendors • Software action plan questions: • Vendor readiness • Vendor timeline for installation / testing • Modules or interfaces • Will YOUR version of the software be upgraded? • Will you require any hardware upgrades? • Are they offering any training? • Expected cost

37. Work with your Key Vendors • Clearinghouse action plan questions: • What ICD-10 services will you provide? • Is my submission format appropriate? • What will be the cost of the service? • When can you accept test claims? • Can you run a report of my denied/pended claims? • Can you run a report identifying my use of “unspecified” ICD-19-CM codes • Are you offering any training opportunities?

38. Health Plan Questions • Action plan, talk to your clearinghouses / plans and ask: • When will your upgrades to your systems to accommodate the ICD-10 codes be completed? • How can you help me in this transition? • What will be the impact of Medicare NOT testing? • When can I send claims and other transactions with ICD-10 codes to you so you can test that they will be accepted? Will you be utilizing the CMS ICD-10 GEMs/crosswalks? • When will you let us know coverage/payment changes? • Will you provide me a list of the data content changes I need?

39. Step Nine: Ongoing Review and Maintenance

40. Outstanding Issues • Readiness level of vendors, payers, others • If 4010, NPI and 5010 are any indication…. • What will workers comp do with ICD-10? • Resource allocation to manage all requirements: • 5010/ICD-10 • Quality reporting programs • Admin simplification • Meaningful use

41. Outstanding Issues • Industry cross-walks • What will the payers do? • Plan payment policies: granularity requirements • What will the payers require? • How will reimbursement be changed? • Could it lead to… • Current payment: $100 • Under ICD-10-CM: • Unspecified code = $50 • Granular code = $100 • From BCBSNC: “Some impediments to timely reimbursement will be the use of ICD-9 codes after 10/1/2013, the use of truncated codes, and the use of “Not Otherwise Specified” codes where specificity is available.”

42. Ongoing Issues and Maintenance • Action plan: • Watch for any announcements of/changes to: • Compliance dates, federal plan payment/documentation policies • Commercial plan payment/documentation policies • Vendor announcements • Be watchful of variances in clinician productivity • Some staff may require additional training and/or monitoring • Keep on top the readiness level of your external readiness • Identify any issues/roadblocks as early in the process as possible • Evaluate issues and assign resolution to staff

43. Section 1104 of the ACA

44. “Chicken and Egg” Issue Solved • In 2006 practices spent an average of $68,274 per physician per year (roughly $31 billion) interacting with health plans (Health Affairs, Casalino et al., 2009).” • Previously-each stakeholder “blamed’ the others for why providers didn’t have administrative functionality • Providers didn’t want multiple proprietary solutions • Payers didn’t want to offer solution that only small number of providers will adopt • With no single approach, no market for vendors • HIPAA/ACA/MU etc solves, at least in part, this issue

45. ACA § 1104 “Wish List” • Required • Operating Rules • Eligibility verification and claim status (2013) • EFT standards and operating rules (2014) • Other HIPAA transactions (2016) • Health Plan Identifier • Claims attachments (2016) • Plan certification and enforcement (2014)

46. Eligibility Operating Rules • Previously, practices would: • Pick up the phone and attempt to verify eligibility • Log on a proprietary plan website • Employ the “submit claim and cross fingers” technique • Play “chase the patient” for the outstanding balances • With new operating rules practices will receive: • Health plan name and coverage dates • Static financials (co-pay, co-insurance, base deductibles) • Benefit-specific and base deductible for individual and family • In/out of network variances • Remaining deductible amounts

47. ACA Section 1104 Action Steps • Assess your current claims revenue cycle processes • Does your current PM system leverage the HIPAA transactions? Which ones now, which ones does it have the capability to? • Do you use manual processes for any of these transactions? • What staff does what and how efficient are these processes? (Hint, just because your practice has been using them for a long time, doesn’t make them efficient.) • Do you pay a billing service or clearinghouse for transactions, if so, which transactions and how much? • Review your options for increasing your level of automation: • PM upgrade • PM replacement • Web-based vendor solutions • ACCESS the AMA-MGMA “Selecting a PMSS Toolkit”

48. Summary and Key Points

49. Summary Implementing ICD-10 is NOT just an IT project – it impacts business processes and may impact other systems Keep on top of all industry developments Create internal “change team” and identify a clinical “leader” Create a multi-year upgrade and training budget Clinician documentation critical to prevent claim denials Implementation will be heavily dependent on when vendors have upgrades ready and when they can be installed Testing with trading partners is extremely important Look at the ROI with ACA

50. Robert Tennant Senior Policy Advisor MGMA Government Affairs rtennant@mgma.org (202) 293-3450 Questions?