ICD-10: Will It Kill a Hospital's Productivity?

Converting to ICD-10 can be viewed as a homework project in two different ways: Some hospitals may want to complete it early to put their minds in a state of relative ease, while other hospitals may be putting it off until the 11th hour, dreading the very thought of picking up the pencil and starting the assignment.

For hospitals in the latter of the two mindsets, time is nearly out, and ICD-10 needs to be taken seriously, says Bill Hannah, chief financial officer of special projects at Piedmont Hospital in Atlanta. ICD-10 will be going live on Oct. 1, 2013, and he says it will completely change the way a hospital functions — and productivity will be negatively impacted at first. Mr. Hannah is leading the ICD-10 conversion at Piedmont, and he explains the extent of ICD-10's future impact on hospitals.

Bill Hannah, CFO of special projects at Piedmont Hospital in AtlantaChallenges and impacts on productivity
ICD-10 will create many technical problems with new coding and billing procedures, but Mr. Hannah says one of the biggest obstacles for ICD-10 transitions has been getting people to understand the negative consequences if their organization is not at least somewhat prepared. "The impact that people haven't yet got their head around is that this is not an IT problem, and it's not a medical records coding problem," Mr. Hannah says. "This is a business challenge that will make you operate differently."

Some of the direct, specific impacts will be the initial costs that a hospital will incur to get ready for ICD-10. Mr. Hannah says a lot of the costs are associated with IT applications, and almost any system of a hospital will have to deal with upgrades: billing, medical record coding, laboratories, radiology, pharmacies, emergency department systems and more. Depending on the size of the organization, these costs could be in the millions. He says large health systems could spend between $5 million and $10 million over the next two-and-a-half years on upgrades needed for the conversion.

After gaining staff attentiveness and fighting through the costs, Mr. Hannah says hospitals will still probably see a significant increase in accounts receivable, perhaps of two weeks or more, for the first six to 12 months while everyone catches up with the new coding, terminology and general nuances. There will also be a likely increase in claims rejections and denials from payors.

"There's going to be a new normal," Mr. Hannah says. "You can prepare for something like this as much as you want, but you'll never be fully prepared. You must start now, take it seriously and make sure that you have senior executive support for all of the changes and modifications that you're going to have to go through."

Communication and education

So what exactly can a hospital do to prepare for ICD-10? Mr. Hannah says every organization should attempt to instill a readiness program that communicates with and educates all employees, physicians, senior leaders and community partners on ICD-10's implications. Points that have to be clarified include the very basics, such as what ICD-10 really is, where did it come from, what does it mean, how codes will be impacted, how it will change a hospital's order of operations and more. Anyone who currently relies on ICD-9 to perform a clinical or business function needs to be re-educated, Mr. Hannah says. A hospital's future productivity depends on it.

Related Articles on ICD-10:

Don't Neglect ICD-9: Why Hospitals Should Look at Current Processes First
ICD-10: Bracing for the Storm and the Coding Update Freeze
Will ICD-10 Kill the Superbill?

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