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May 24, 2013 Readers Write 2 Comments

A Five-Step Approach for Collaborative ICD-10 Testing
By Deepak Sadagopan

With the October 1, 2014 ICD-10 deadline rapidly approaching, payers and providers should be knee deep in their transition and testing efforts. According to CMS, there will be no more delays.

For many, especially healthcare provider organizations, ICD-10 is straining resources across all operational departments, including revenue cycle, coding/HIM, and IT. Providers are actively seeking ways to contain the cost of compliance and minimize revenue disruption post-transition. Many are mitigating ICD-10 risks by analyzing historical data and prioritizing high-risk areas based on impacted specialty or department.

As providers evaluate high-impact scenarios, they need to take a more strategic approach by allocating scarce, skilled resources to the evaluation of high-impact cases, natively coding those carefully selected scenarios, and then collaboratively testing these scenarios with their trading partners.

This last step is vital to avoiding revenue cycle disruption after the transition. While collaborative testing may require more testing time, the resulting ICD-10 readiness will give providers the ability to foresee potential coding problems and possibly avoid a negative impact on revenue flow.

Most importantly, with the rapid evolution of value-based reimbursement programs that would include direct trading transactions between providers and payers, collaborative ICD-10 testing will build confidence and pave the way for more intense collaboration that involve higher financial stakes for both parties.

But there’s a problem. Nearly two-thirds of respondents to a survey conducted at the February 2013 Healthcare Mandate Summit indicated they have used, or are planning to use, the additional year to conduct testing. However, two-thirds of respondents also said they do not have a specific strategy in place for collaborative testing. By not testing together, providers are missing out on a significant opportunity to share coding knowledge and outcomes with their trading partners.

Collaborative testing is a key component to overall mandate adherence and can be managed with a simple five-step approach. This approach enables providers to assess their readiness and achieve a less disruptive transition to ICD-10.

  1. Establish a baseline. Providers and their trading partners should evaluate at least 12-18 months of key performance indicators such as claims acceptance rates, electronic claim adjudication rates, and aggregate claim reimbursement amounts for high-impact medical services.
  2. Identify key partners. Healthcare providers should identify and connect with trading partners that want to achieve ICD-10 compliance with as little financial risk as possible. This approach brings both perspectives to the table to establish a balanced testing plan.
  3. Develop test scenarios. Both parties work together to establish testing goals and mutually beneficial testing scenarios. The choice of test scenarios should involve a mix of cases likely to increase or decrease reimbursement compared to historical claims data.
  4. Run tests. Both parties set up their test systems and infrastructure to test identified scenarios and run them through their processes. Providers should natively code scenarios in ICD-10 and send claims to the payers. The payers natively process the claims in ICD-10 through the complete life cycle and return the reimbursement advice to the provider.
  5. Assess results. Providers and payers compare results with the baseline to identify discrepancies. Providers can use the results to assess impacts to internal coding productivity, DNFB days and revenue disruptions that may occur post-transition.

With 85 percent of healthcare costs hanging in the balance, it is imperative that problems are solved before the 2014 deadline. Providers and their insurance plan partners hold the key to each other’s success, and by coming together early, everyone can better ensure business readiness and financial neutrality.

Deepak Sadagopan is general manager of Clinical Solutions & Provider Segment at Edifecs.

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Currently there are "2 comments" on this Article:

  1. I think it is also noteworthy that this dialog between the payors and providers should include a clearly defined plan for the “cutover” to ICD-10. Expectations should be consistent insofar as what is expected on the claims for patients admitted or seen during the September 30-October 1, 2014 timeframe (e.g. a patient admitted on September 29, discharged on October 2, with procedures ordered/performed daily.)

  2. Deepak,

    Thank you for the enlightening post on how serious it’s coming to be when considering each institutions plans for ICD-10. Time is of the essence! We need to all work together from the same starting point to ensure that we are going to be ready to treat patients on October 1, 2014 with ICD-10 findings instead of ICD-9 findings.

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