A CEO s Guide to Mitigating Risk for ICD-10 Compliance

Transcription

1 A CEO s Guide to Mitigating Risk for ICD-10 Compliance Joseph J. DeSilva, FACHE Partner Lucy Mancini Newell, MBA, FHIMSS Managing Partner August,

2 A CEO s Guide to Mitigating Risk for ICD-10 Compliance Introduction For all healthcare organizations, the ICD-10 Compliance initiative is but a distant goal given its target date for completion, October, 1, In spite of this fact, mitigating for potential risks related to the transition from ICD-9 to ICD-10 remains a formidable task for any organization. The enterprise-wide impact and the pervasiveness of updating information touch the entire organization so efforts to reach a state of compliance cannot be underestimated. As a result, executives must begin their efforts early to plan for the transition including the development of mitigation strategies to safeguard any potential deleterious effects throughout their organization. The timeline below (Graph 1) graphically represents the various checkpoints relative to achieving ICD-10 compliance including meeting HIPA 5010 compliance on January 1, While there appears to be ample time to engage in this effort, it is never too early to begin efforts to identify areas of potential risk well in advance so that appropriate measures and actions can be in place. Graph 1: Timeline for Achieving HIPAA 5010 and ICD-10 Compliance August, 2011 You Are Here 5010 Level 2 Compliance ICD-10 Compliance In Progress ICD-10 Compliance Completed January 1, 2011 January 1, 2012 January 1, 2013 October 1, 2013 HIPAA Calendar Months ICD Calendar Months This white paper focuses on the ten areas for which your efforts can mitigate potential risk. While there may be additional areas of potential risk, we encourage your organization to conduct its ICD-10 initiative in a comprehensive and enterprise-wide approach to ensure that all potential risks can be identified, prioritized and worked within the scope of a compliance program tailored to your environment. 2

3 1. Cash Acceleration / Cash Release One of the greatest risks to mitigate regarding ICD-10 is the potential financial impact to a healthcare organization. The financial impacts may occur twice: first, beginning as of January 1, 2012, when transmission of HIPAA 5010 transactions are required, and, second, after October 1, 2013 when all submissions for reimbursement will require only ICD-10 codes. No one is able to predict the level of impact a healthcare organization might realize since compliance requires both your organization to be prepared as well as external trading partners. The first potential risk pertains to meeting the HIPAA 5010 compliance is a predecessor requirement to ICD-10 compliance that includes, not only the efforts of your own healthcare organization to communicate with trading partners such as payers, clearinghouses and vendors (software / information technology firms), but the actions of those trading partners to confirm that all parties can receive required information. To date, your organization will have solicited documentation from each trading partner to confirm that they will be achieving HIPAA 5010 compliance and will be ready to exchange data with your organization. In addition, for any of the healthcare software that in place today, those vendors will have confirmed that the version of software in use today is capable of transmitting HIPAA 5010 transaction code sets. If the software is unable to do so, a software upgrade would have been required to allow HIPAA 5010 transaction codes sets. CMS has been actively providing information to the industry about meeting this first major step toward ICD-10 compliance. Testing has already begun between and among business partners. Ensure that the documentation provided by each of the business partners and your organization have been thoroughly reviewed by an executive sponsor, Risk Manager and hospital counsel to confirm that all the correspondence is in order and validating that all parties are prepared for the January 1, 2012 deadline to solely transmit HIPAA 5010 transactions. It is especially important to confirm that testing has been conducted between your organization and all business partners and that the outcome shows that successful, repeatable transmissions have been completed. Why is this important? Without validating that testing for HIPAA 5010 is successful, then it will be critical to have a contingency plan in place since there will be a direct impact on cash flow if your organization and/or one of your trading partner does not meet the January 1, 2012 deadline. Ultimately each healthcare organization must ensure that its cash reserves are built up in anticipation of January 1, 2012, and, later, prepare for the October, 1, 2013 deadline. [1] 3

4 2. Plan, Plan and Plan Again One of the dangers in planning for ICD-10 is to presume that it is mostly a Health Information Management initiative with some limited efforts from an Information Technology department. Instead, this initiative is truly an enterprise wide initiative that touches upon many constituencies and many operational processes. The diagram below provides a comprehensive view of areas that may be impacted by this compliance initiative. Do not hesitate to identify any other areas that might be impacted by ICD-10 for some of the unique requirements for your hospital or health system. Diagram 1: Functional Areas Potentially Impacted by ICD-10 Compliance, Within Your Healthcare Organization ADMINISTRATION Compliance Risk Management Vendor / Trading Partners Relationahips & Contracts Contingency Planning Finance (e.g. Fiscal Well-being) PATIENT REGISTRATION Registration and Scheduling Systems Advance Beneficiary Softwre Performance Measurement Systems Medical Necessity Edits Your HIPAA 5010 And ICD-10 Initiative CLINICAL SYSTEMS ) Clinical Protocols Orders (tests) System / Clinical Systems Clinical Reminder System Medical Necessity Software Disease Management System Decision Support System Pharmacy System SUPPORT SYSTEMS Case Mix System Utilization Management Quality Management Case Management BILLING Financial Systems Billing Systems Claims Submission Systems Compliance Checking Systems System Logic and Edits National & Local Coverage Criteria Conversion of Other Payment Methods DRG Grouper HEALTH INFORMATION MANAGEMENT (HIM) Encoding Software Abstracting System DRG Grouper Compliance Software Medical Reords Abstracting Training of Coders REPORTING Provider Profiling Aggregate Data Fraud Management Reporting Quality Measurement Patient Assessment Utilization Management Data Sets (OASIS, Disease Management PAI, MDS) Registries State Reporting Other Registries Managed Care Reporting System (HEDIS) INFORMATION TECHNOLOGY Electronic Data Interchange (EDI) Project Management Methodology Testing, Software and Hardware upgrades, if required And so much more. Source: Source: Slide adapted by The Stellar Group Consultants from an original slide created by Dwan Thomas-Flowers, MBA, RHIA, CCS, Mayo Clinic, Jacksonville, FL Presentation: ICD-10 s Impact on Coding Operations: Practical Insights for Senior Leaders There are various types of planning processes that will support the ICD-10 compliance initiative: In addition to the existing planning effort to manage all tasks and activities 4

5 related to this initiative, ensure that Contingency Planning is an integral component to planning efforts. All potential risks should be identified, defined, and integrated into the routine reporting to an executive steering committee that will have oversight for this initiative. The more time invested in planning and revisiting existing plans, the fewer the number of potential risks that will surprise the organization. 3. Escalation Procedures: How Best to Ensure An Early Warning System One of the best mitigation strategies is to develop an escalation procedure that alerts the executive steering committee in a timely manner as deadlines are missed or issues arise that are negatively impacting progress for the ICD-10 initiative. Every project, especially ones with an enterprise-wide impact, encounters potential risks. The most successful are organizations those who educate project participants in the importance of identifying issues early and submitting them through an established escalation process that expedites remediation and informs key sponsors. 4. Contract Review: Sooner than Later Each hospital will prepare for the conversion of ICD-9 to ICD-10 by reviewing all pertinent reimbursement contracts since it remains unclear how much the potential financial impact as new codes are used to submit to payers. Careful analysis of current reimbursement compared to the newly designated reimbursement for the ICD-10 equivalent codes of previously used ICD-9 codes will be an important exercise. This exercise will identify any potential changes in reimbursement. While many pieces of information relative to reimbursement rates specific to ICD-10 are not finalized by all payers with whom your organization has contracted with, a communication plan should be drafted to ensure regular conversations to determine when new reimbursement information can be made available to providers. This will allow a proactive approach to securing. pertinent reimbursement information as early as possible to begin modeling the new rates and assessing potential impact. 5

6 5. Learning Curves: Helping Physicians to Bridge the Gap For those organizations that currently are challenged by the quality of physician documentation, there will be a need to initially identify whether this has a significant impact today on your Health Information Management department or whether this is a transient issue. If this is a challenge today, this will be exacerbated through the migration to ICD-10. During a recent conference call with the Centers for Medical and Medicaid Services (CMS), their physician representative recommends that each physician by specialty identify the most common ICD-9 codes that are currently in use. Once these are identified, the corresponding ICD-10 codes can be identified and reviewed for appropriateness. This exercise then acts as the template by which to simplify physician education and familiarization with ICD-10. Clearly each organization will develop its own approach to assist physicians in preparation for the transition to ICD-10 and then provide some period of support during the actual transition beginning on October 1, As in any significant transition, often there is insufficient resource allocation post-go-live. It is important to plan for some period of required effort, possibly three to six months, to ensure that all the healthcare users have been able to address workflow issues, learning curve and policies and procedures to support the newly compliant, ICD-10 environment. 6. Technology: How much more is required? It is clear that Information Technology in your organization will require upgrades to achieve both for HIPAA 5010 and ICD-10 compliance. In the early 1990s, Computer- Assisted Coding (CAC) tools made their debut. [2[ Now CAC technology is more mature and documentation does show significant positive impacts. So additional automation 6 can provide both accuracy and enhanced productivity to offset known negative impacts related to the transition to ICD-10. As in all situations, a careful due diligence of CAC technology should be conducted to determine whether such an acquisition may provide both shortterm and long-term value to a healthcare organization. There will be great value for those organizations that can continue to selectively invest in pertinent systems and/or technologies that may minimize potential risks relative to ICD-10, [Note: This White Paper is not intended to recommend or advance any particular technology relative to ICD-10.]

7 7. Lessons from Canada: Resource requirements are more than you expect The United States is one of the last countries to migrate from ICD-9 to ICD-10. The United Kingdom made the transition in 1995 and Canada began their transition in 2001 and completed eight of the ten provinces by There countries are already planning over time to continue the transition to ICD-11. Since valuable lessons learned can always serve to inform a group, it was important to share some of those lessons from Canada since their transition was the most recent on the world stage [3] Some of these lessons from Canada include: Loss of productivity of coding staff, Post-implementation productivity never reached previous levels, Review of all reports to note impact of new coding, Need to retain historic data (ICD-9), Challenge to compare historic data and current date (trends are directly impacted), and Education requirements for staff before the transition and after achieving ICD-10 compliance are greater than anticipated. As with any sweeping initiative that touches across an enterprise, there were several unforeseen challenges that arose. A few of these challenges included, but are not limited to: the mapping of data is impacted and requires significant attention, data quality may be impacted and efforts are required to ensure negative impact, and software upgrades or enhancements may be required to support data quality edits. One other observation from various countries is that it takes a minimum of 3 years to complete this initiative. This observation is important for the U.S. healthcare market since we have experienced an unusually high number of competing, concurrent initiatives such as Meaningful Use of Electronic Health Records, ARRA, and HITECH. 8. Information Management: Impacts to Your Data and Reporting Needs As in any significant shift in which coding information is directly impacted, all reporting that contains this data will be directly impacted. Data will be derived to inform reports as either primary data, direct from a specific information system, or secondary data that is extracted from a given information system and manipulated externally. The risks relative to Information Management may reside in one of several areas: Not identifying all reports across the enterprise that contain ICD-9 data today and, in the future, will contain ICD-10, 7

8 Preparing and understanding the shift to organizational trends and statistics when comparing ICD-9 based data and ICD-10 based data, Determine how external reporting will be assessed given the change in outcomes from ICD-10 data, Metrics used for dashboards can be reviewed to determine impact of ICD-10 transition, Board level reports and reporting are analyzed for potential impact and education of Board Members regarding the shift in data/information, and Ensuring that ICD-9 based reporting is stored for future reference. Given the impact to data that will be directly impacted by the transition to ICD-10, it may be valuable to prepare for educating the various used constituencies about the changes to reporting information. As part of the planning process, efforts should be allocated to these requirements. 9. Contingency Planning and Contingency Funding Often planning for a project or program will include a period of post-implementation support to address any refinement or retooling that may be required. Given the enterprise-wide impact of transitioning to ICD-10 and the number of constituencies involved, it would be beneficial to create a funding model that begins now and extends past the final compliance date of October 1, It may be suggested that Contingency Funding for post-compliance might extend at least 6 months to ensure that all costs may be covered. While mitigating risk through Contingency Funding post-compliance in 2013 is important, it is also worth noting that both Contingency Planning and Contingency Funding are fundamental tasks that should be integrated into the current planning process for both completions of current HIPAA 5010 efforts and the continuing ICD-10 efforts over the next 25 calendar months. Earlier when discussing the lessons learned from Canada s ICD-10 transitions, it was noted that both coder productivity and coder education were impacted. More coder education was required than previously anticipated and coder productivity never reached ICD-9 levels. These two areas will require focused attention as part of a mitigation approach. 8

9 10. Communication Who and What? As with any enterprise-wide initiative, developing a communication approach that is effective for your culture and healthcare organization is key to minimizing risks relative to the pending changes that will take two years to complete. Identify the vehicle for communication that best suits the various constituencies and ensure that communication is regularly scheduled over the course of the next two years (e.g. newsletters, intranet, face-to-face internal education at regularly scheduled departmental meetings, etc.). In addition to a formal Communication Plan contained within the enterprisewide, ICD-10 Work Plan, determine whether there are any specific constituencies that will require additional levels of effort and methods to provide routine updates to compliance efforts. Take the opportunity to query each constituency to ensure that they are receiving meaningful, timely information about the ICD-10 initiative that is in progress. Conclusion Risk mitigation is a continuous effort that is integrated into the ICD-10 compliance work plan. All participants should be educated on the importance of identifying and escalating risk in a timely manner to avoid negative impact to other tasks or activities related to the initiative. Assess risk often in all areas of the initiative and report regularly to the designated Work Group, Task Force, and Steering Committee so that all participants can learn from the information. Remember that Risk Mitigation and the corresponding decision-making process is required to resolve each identified risk. This process will repeat until each is resolved and signed off by the appropriate person with authority. Begin with this list of potential risks and identify others that are specific to your compliance efforts. These efforts will all reap the benefits of minimizing or eliminating potential negative impacts to your ICD-10 initiative. 9

10 Bibliography: [1] HealthLeaders, ICD-10 Puts Revenue at Risk; July, 2011; Karen Minich-Pourshadi. [2] American Health Information Management Association (AHIMA), Delving into Computer-Assisted Coding, November-December, 2004, the article is available on the AHIMA web site: , [3] HIMSS Annual Conference Presentation, Implementing ICD 10 Lessons learned from Canada, Chris Wierz, MBA BSN, RN, and Kerry Johnson, MAEd, CHIM; February 7, 2011, Orlando, Florida. About The Kiran Consortium Group LLC The Kiran Consortium Group LLC (TKCG) is a professional services firm that provides experience and delivery excellence to our clients. We provide operational and information technology insights for the healthcare industry to accelerate processes introduce pragmatic solutions and share our knowledge with our clients. Our services include: Compliance, Implementation of Electronic Health Records, Interim Executive Services (e.g. Chief Executive Officers, Chief Information Officers, etc.), and Strategic Planning. Given the enormous industry challenge to address HIPAA 5010 and ICD-10 Compliance while balancing Meaningful Use and HITECH/ARRA initiatives, TKCG has developed a toolkit to accelerate the assessment efforts. The U-Test-IT, HIPAA 5010 and ICD-10 Toolkit, integrates a comprehensive Assessment, Work Plan, Issues Management, Governance, Contract Management, and Reporting functions to help clients to collect this baseline information and to identify potential risks and contingency plans to ensure Compliance success. Contact Information: Info@Kiran-Consortium.com. Other ICD-10 White Papers by Our Firm: The C-Scape Series: A CEO s Guide to Advancing ICD-10 Compliance Efforts (May, 2011) A copy of this White Paper is found on our website: ICD-10: Data Impact Across the Enterprise (April, 2011) Publication by the Healthcare Information Management and Systems Society (HIMSS) on a new web site, the ICD-10 Playbook, May For more information about the scheduled launch of the ICD-10 Playbook website, please visit the URL below for updates: The Kiran Consortium Group, LLC Experience Delivery Excellence Integrity The Kiran Consortium Group LLC. All Rights Reserved. August