A seismic shift affecting all U.S. healthcare organizations is rapidly approaching. As of Oct. 1, 2014, ICD-9 will be history as HHS will require the use of ICD-10 for medical diagnosis and inpatient procedure coding. Simply put, noncompliance will result in the organization no longer being able to bill for services. On the flip side, compliance will produce significant rewards for healthcare organizations, including improvements in medical management, claims processing, research and other core business processes.
As a key part of preparation for ICD-10, organizations must ensure that they will have health information and other supporting systems in place to handle the new codes. First, all systems currently using ICD-9 codes will need to be inventoried. Then, the software for these systems will have to be either updated or replaced in order to become ICD-10-ready.
Is your organization's technology prepared for ICD-10? At this writing, it appears that fewer than three out of every 10 U.S. healthcare organizations have even begun the process of converting their information systems to ICD-10. And it's not a short or simple process by any means; all the work involved in conducting an inventory of all systems that use ICD-9 today and preparing these systems for ICD-10 may take up to nine to twelve months. Then comes the process of determining which systems need to be upgraded, figuring out which systems need to be remediated, syncing the vendors' remediation plans with your own remediation plans, etc. If your organization has not yet begun converting software technology to ICD-10, it is critical to start as soon as possible.
1. Assemble a project team
You will need a project team to plan and then manage the entire ICD-10 initiative. The team should consist of individuals from all key components of the organization, including representatives from senior management, health information management, revenue cycle and information systems. One team member should be appointed project manager.
Among the team's initial tasks:
• Develop a specific action plan.
• Establish a communication plan to help the entire organization recognize the need to convert to ICD-10.
• Inventory your information systems and create a plan to remediate or upgrade them.
• Inventory the managed care contracts and estimate the financial impact of ICD-10 on these contracts.
• Identify physician documentation requirements and begin physician education immediately.
• Identify ICD-10 training needs throughout the organization and secure training resources.
• Establish a budget for the conversion.
• Identify any need for increased staffing or external assistance with the conversion.
• Assign responsibilities for carrying out the action plan.
• Develop a detailed project roadmap to get the organization from today to October 1, 2014.
2. Build an inventory of all your systems currently using ICD-9 codes
The ICD-10 conversion process begins in earnest with identifying all the functional areas within your organization that currently work with ICD-9 codes. Thinking through your organization's revenue cycle, health information management and clinical systems will help in this endeavor. Often, this initial inventory is completed by people within the information technology department. You should also plan to ask each functional leader about IT systems in use that currently utilize ICD-9 codes. Generally, IT departments are aware of only 85 to 90 percent of the systems that are in use, and functional area leaders may be able to expand this awareness.
During this inventory step, some functional area leaders may call attention to software systems that have been in use at your organization for many years and have become antiquated. Rather than having your organization spend time and money to update such systems for ICD-10, a decision might be made to replace these systems altogether. Similarly, in interviews with functional area leaders, you might be able to identify decentralized business functions that could potentially be made more effective if they were to be centralized. For example, you could end up asking, "Why are we remediating seven different systems that all do the same thing?" "Why don't we consolidate this business function and equip the function with a single piece of software?" Now, particularly in light of the one year delay, might be a good time to consider such an initiative, but with time to convert systems to ICD-10 running short, you may not want to take on centralization in a big way. These are just a few examples of issues that might crop up unexpectedly in your interviews with functional area leaders — issues that may lead to unanticipated yet positive results for your organization.
Be sure to ask the functional area leaders to identify staff members who currently carry out ICD-9 coding tasks. By speaking with these staff members, you will be better able to determine the kinds of training they might need for ICD-10.
3. Gather contact information for all vendor-supported software
Nearly all provider health information systems are vendor-supported. With functional area leaders' help, your project team will need to get contact information for all vendors behind these systems; do not underestimate the difficulty associated with this task. With the contact information in hand, designated members of the project team will need to reach out to the vendors to gain an understanding of when and how the systems they support will be readied for ICD-10.
Among the questions to pose to vendors:
• How will you prepare the system we're currently using for ICD-10 — through a full upgrade or simply a remediation "patch"?
• Will we need to purchase an entirely new system to replace the current one?
• Are upgrades included in our current contract, or will there be additional costs to upgrade?
• Will the current system be able to handle both ICD-9 and ICD-10 codes simultaneously during the conversion?
• Which forms and reports will need to be revised?
• Will you offer any training to lead our organization through the conversion?
• What other services might you offer in the conversion?
Work with each vendor to create a timeline for testing and installing the new or upgraded system supported by that vendor. Also, this is the time to identify any need for increased staffing or external assistance with the conversion.
This step may well be turn out to be one of the most time-consuming and labor-intensive steps in the conversion process. If you need to streamline this workstream, one recommendation is to organize your IT systems in priority order. You absolutely need to focus on all systems that immediately impact your ability to document and bill, including patient access, medical necessity, EMR abstracting and billing. Second tier systems that are primarily focused on external reporting could be considered for a secondary list.
4. Coordinate the upgrading or replacement of systems
Armed with the information gathered in Steps 2 and 3, your project team will now need to coordinate the information system upgrades with the ICD-10 training and education that is occurring for all the staff in each of the functional areas. Getting each vendor solution installed within a timeline that works for each functional department will be no easy task. Obviously, you will need to make sure that all the people are trained to utilize the new software before software upgrades are implemented.
Most health organizations will need to manage at least 10 to 20 separate remediation patches/upgrades, each of which will need to be uploaded and tested.
Among the other technology-related challenges to be addressed in Step 4 are training staff to work with ICD-10 coding and testing to make sure information is transferring properly from the old software to the upgraded software. Obviously, interfaces will need to be tested as well.
5. Complete the conversion
Once the conversion to ICD-10 is complete, there will still be much work to be done. It will be critical for your organization to continue managing the change and monitor compliance on an ongoing basis. Users may or may not be immediately familiar with how to use the software system now that it is set up for processing ICD-10 codes. Post October 1, 2014, you will need to carefully watch:
• The levels of approvals related to medical necessity and authorizations
• The quality of physician documentation in the medical record
• Stability of case mix index
• Average days in Discharged Not Final Billed
• Levels of denials, turnaround associated with resolving them and final payment amount
Involving your C-suite in the process
The C-level executives at your organization — particularly the COO, CFO and COO — should be given the results of all data gathering and analysis conducted as part of the conversion to ICD-10. They will need to be able to view the project from a big-picture perspective and provide guidance from that perspective. If it turns out that fundamental systems changes related to ICD-10 may be needed, you will want your C-level executives to be able to make decisions on such matters. Unquestionably, C-level executives will need to be heavily involved in:
• Communicating with the physicians about the importance of better documentation
• Engaging with vendors about remediation plans
• Connecting with payors about payment impact on the hospital
• Updating the board about the readiness of the organization
• Supporting the capital requests related to additional software to support the documentation and coding processes
To reap the substantial rewards of ICD-10 compliance — and avoid the unmistakable perils of noncompliance — your organization must begin the conversion without further delay. The process we've outlined will help you carry out the conversion in a smooth, orderly and timely fashion.
Craig Kappel is a partner in Ernst & Young’s Advisory Practice and has 30 years of healthcare provider experience. He is the national leader for E&Y’s ICD-10 and revenue cycle solutions. His experience includes technology implementations, business process redesign, performance improvement and consolidation of the provider finance, health information management and revenue cycle business functions.
34 Statistics on Hospitals and ICD-10 Readiness
Survey: 72% of Hospital CIOs Believe ICD-10 Delay Was Needed
As a key part of preparation for ICD-10, organizations must ensure that they will have health information and other supporting systems in place to handle the new codes. First, all systems currently using ICD-9 codes will need to be inventoried. Then, the software for these systems will have to be either updated or replaced in order to become ICD-10-ready.
Is your organization's technology prepared for ICD-10? At this writing, it appears that fewer than three out of every 10 U.S. healthcare organizations have even begun the process of converting their information systems to ICD-10. And it's not a short or simple process by any means; all the work involved in conducting an inventory of all systems that use ICD-9 today and preparing these systems for ICD-10 may take up to nine to twelve months. Then comes the process of determining which systems need to be upgraded, figuring out which systems need to be remediated, syncing the vendors' remediation plans with your own remediation plans, etc. If your organization has not yet begun converting software technology to ICD-10, it is critical to start as soon as possible.
5 steps to successfully converting your systems to ICD-10
What follows is a recommended process that will ease the transitioning of your organization's information systems to ICD-10.1. Assemble a project team
You will need a project team to plan and then manage the entire ICD-10 initiative. The team should consist of individuals from all key components of the organization, including representatives from senior management, health information management, revenue cycle and information systems. One team member should be appointed project manager.
Among the team's initial tasks:
• Develop a specific action plan.
• Establish a communication plan to help the entire organization recognize the need to convert to ICD-10.
• Inventory your information systems and create a plan to remediate or upgrade them.
• Inventory the managed care contracts and estimate the financial impact of ICD-10 on these contracts.
• Identify physician documentation requirements and begin physician education immediately.
• Identify ICD-10 training needs throughout the organization and secure training resources.
• Establish a budget for the conversion.
• Identify any need for increased staffing or external assistance with the conversion.
• Assign responsibilities for carrying out the action plan.
• Develop a detailed project roadmap to get the organization from today to October 1, 2014.
2. Build an inventory of all your systems currently using ICD-9 codes
The ICD-10 conversion process begins in earnest with identifying all the functional areas within your organization that currently work with ICD-9 codes. Thinking through your organization's revenue cycle, health information management and clinical systems will help in this endeavor. Often, this initial inventory is completed by people within the information technology department. You should also plan to ask each functional leader about IT systems in use that currently utilize ICD-9 codes. Generally, IT departments are aware of only 85 to 90 percent of the systems that are in use, and functional area leaders may be able to expand this awareness.
During this inventory step, some functional area leaders may call attention to software systems that have been in use at your organization for many years and have become antiquated. Rather than having your organization spend time and money to update such systems for ICD-10, a decision might be made to replace these systems altogether. Similarly, in interviews with functional area leaders, you might be able to identify decentralized business functions that could potentially be made more effective if they were to be centralized. For example, you could end up asking, "Why are we remediating seven different systems that all do the same thing?" "Why don't we consolidate this business function and equip the function with a single piece of software?" Now, particularly in light of the one year delay, might be a good time to consider such an initiative, but with time to convert systems to ICD-10 running short, you may not want to take on centralization in a big way. These are just a few examples of issues that might crop up unexpectedly in your interviews with functional area leaders — issues that may lead to unanticipated yet positive results for your organization.
Be sure to ask the functional area leaders to identify staff members who currently carry out ICD-9 coding tasks. By speaking with these staff members, you will be better able to determine the kinds of training they might need for ICD-10.
3. Gather contact information for all vendor-supported software
Nearly all provider health information systems are vendor-supported. With functional area leaders' help, your project team will need to get contact information for all vendors behind these systems; do not underestimate the difficulty associated with this task. With the contact information in hand, designated members of the project team will need to reach out to the vendors to gain an understanding of when and how the systems they support will be readied for ICD-10.
Among the questions to pose to vendors:
• How will you prepare the system we're currently using for ICD-10 — through a full upgrade or simply a remediation "patch"?
• Will we need to purchase an entirely new system to replace the current one?
• Are upgrades included in our current contract, or will there be additional costs to upgrade?
• Will the current system be able to handle both ICD-9 and ICD-10 codes simultaneously during the conversion?
• Which forms and reports will need to be revised?
• Will you offer any training to lead our organization through the conversion?
• What other services might you offer in the conversion?
Work with each vendor to create a timeline for testing and installing the new or upgraded system supported by that vendor. Also, this is the time to identify any need for increased staffing or external assistance with the conversion.
This step may well be turn out to be one of the most time-consuming and labor-intensive steps in the conversion process. If you need to streamline this workstream, one recommendation is to organize your IT systems in priority order. You absolutely need to focus on all systems that immediately impact your ability to document and bill, including patient access, medical necessity, EMR abstracting and billing. Second tier systems that are primarily focused on external reporting could be considered for a secondary list.
4. Coordinate the upgrading or replacement of systems
Armed with the information gathered in Steps 2 and 3, your project team will now need to coordinate the information system upgrades with the ICD-10 training and education that is occurring for all the staff in each of the functional areas. Getting each vendor solution installed within a timeline that works for each functional department will be no easy task. Obviously, you will need to make sure that all the people are trained to utilize the new software before software upgrades are implemented.
Most health organizations will need to manage at least 10 to 20 separate remediation patches/upgrades, each of which will need to be uploaded and tested.
Among the other technology-related challenges to be addressed in Step 4 are training staff to work with ICD-10 coding and testing to make sure information is transferring properly from the old software to the upgraded software. Obviously, interfaces will need to be tested as well.
5. Complete the conversion
Once the conversion to ICD-10 is complete, there will still be much work to be done. It will be critical for your organization to continue managing the change and monitor compliance on an ongoing basis. Users may or may not be immediately familiar with how to use the software system now that it is set up for processing ICD-10 codes. Post October 1, 2014, you will need to carefully watch:
• The levels of approvals related to medical necessity and authorizations
• The quality of physician documentation in the medical record
• Stability of case mix index
• Average days in Discharged Not Final Billed
• Levels of denials, turnaround associated with resolving them and final payment amount
Involving your C-suite in the process
The C-level executives at your organization — particularly the COO, CFO and COO — should be given the results of all data gathering and analysis conducted as part of the conversion to ICD-10. They will need to be able to view the project from a big-picture perspective and provide guidance from that perspective. If it turns out that fundamental systems changes related to ICD-10 may be needed, you will want your C-level executives to be able to make decisions on such matters. Unquestionably, C-level executives will need to be heavily involved in:
• Communicating with the physicians about the importance of better documentation
• Engaging with vendors about remediation plans
• Connecting with payors about payment impact on the hospital
• Updating the board about the readiness of the organization
• Supporting the capital requests related to additional software to support the documentation and coding processes
To reap the substantial rewards of ICD-10 compliance — and avoid the unmistakable perils of noncompliance — your organization must begin the conversion without further delay. The process we've outlined will help you carry out the conversion in a smooth, orderly and timely fashion.
A timeline for converting your systems to ICD-10As soon as possible, if not already completed• Convene a project team to oversee the ICD-10 conversion throughout your organization • Develop a specific action plan • Assign responsibilities for carrying out the action plan • Establish a budget for the conversion • Build an inventory of all your systems currently using ICD-9 codes • Gather contact information for all vendors of systems currently in use • Work with each vendor to create a timeline for testing and installing the system supported by that vendor • Assess your coding staff needs • Enhance electronic health records to accommodate the new codes By June 30, 2013 • Train coders in ICD-10, preparing for potential coding delays and increased error rates as coders learn the new system By October 1, 2013 • Complete updating of core and secondary computer programs to accept ICD-10 • Reengineer business processes to support the new ICD-10 documentation standards and redesign coding and billing forms • Begin practice coding in ICD-10 Ongoing • Monitor compliance |
Craig Kappel is a partner in Ernst & Young’s Advisory Practice and has 30 years of healthcare provider experience. He is the national leader for E&Y’s ICD-10 and revenue cycle solutions. His experience includes technology implementations, business process redesign, performance improvement and consolidation of the provider finance, health information management and revenue cycle business functions.
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