Survey: Most Providers, Health Plans Haven't Fully Determined ICD-10 Impact

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Most healthcare providers and health plans haven't properly determined how the transition to ICD-10 will affect them, according to a poll conducted by audit, tax and advisory firm KPMG.

KPMG polled health plans and healthcare providers from October to December 2013 and found 76 percent of those surveyed had completed an ICD-10 impact assessment. Additionally, 72 percent had allocated budget toward efforts to prepare for the transition, and 42 percent reported carrying out system testing. Thirty-three percent said they do end-to-end testing, while another 28 percent said they don't but plan to do so.

However, 50 percent didn't know the estimated cash flow impact of the transition in the fourth quarter of 2014, and 38 percent were unsure where their organization stood with regard to external testing with payers, providers and trading entities, according to the survey.

Furthermore, 45 percent of those polled said they hadn't calculated the projected permanent productivity decrease for their coders as a result of the switch to ICD-10, and 41 percent hadn't calculated the transition's expected impact on days in accounts receivable. When asked if their organizations had implemented any enhanced CDI strategies for the transition, 48 percent were unsure of the answer.

Wayne Cafran, a principal with KPMG's healthcare advisory practice, says the lack of preparation in these areas is likely the result of conflicting priorities, such as developing accountable care organizations and achieving meaningful use of electronic health records.

"ICD-10 wasn't top-of-mind," Mr. Cafran says. He says he has observed during recent months that providers are realizing they need to make preparing for the transition a priority.

"Now, you've got less than 10 months," he says. "You've got to have a flawless execution strategy around ICD-10. You don't have a lot of time now for major hiccups."

At this point, providers should prioritize contracting with vendors and coding companies that can help with the transition and supplement the efforts of the hospital or health system's coders when ICD-10 goes live. "You want to lockin with a vendor," Mr. Cafran says. "If you don't lock in with one now, they might not be available in October."

Additionally, it's crucial providers make sure their clinical documentation programs run well and train their coders and physicians on the documentation. In particular, physicians need to be educated about ICD-10 documentation in a way that's tailored to their specialties. In the survey, 29 percent of health plans and providers identified training and information sessions as the most critical in ensuring successful change management. Thirty-seven percent reported educating staff is the most significant CDI challenge they face.

The key to overcoming challenges concerning the transition to ICD-10 is having a good governance structure in place, with a vetting group that can make decisions quickly and accurately, according to Mr. Cafran. Healthcare providers should have an executive committee and steering committees overseeing preparation efforts.

"Make sure they have adequate resources," he says. "That's going to be really critical. You've got to have that structure in place."

More Articles on ICD-10:
How WEDI, CMS Are Easing the ICD-10 Transition 
9 Statistics on Vendor, Provider, Insurer ICD-10 Readiness  
Survey: Half of Providers Have Completed ICD-10 Impact Assessment 

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