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Claims and Coding

How ICD-10 impacts revenue cycle management

Converting to the new code set will touch virtually every aspect of a provider’s operations. By Sashi Padarthy


he transition to ICD-10 offers a pathway to profound performance improvement. However, migration to ICD-10 involves much more than just converting codes, expanding data fi elds or

even installing brand-new ICD-10-compliant systems. At its most basic level, migration to ICD-10 is about exchang- ing one diagnostic and procedure clinical terminology for a richer and greatly expanded set. However, this drastically oversimplifi es the scope of people, processes and information technology that will be signifi cantly impacted by the use of this new terminology.

Converting to the new code set will touch virtually every aspect of a provider’s operations, including patient services, care delivery, revenue cycle management, data analysis and reporting, as well as a number of information-technology systems that use diagnostic and procedural information.

Key areas of impact

One critical operation that needs attention is revenue cycle management, which includes medical coding, contract management, billing and reimbursement. Health systems must determine whether existing code sets accurately rep- resent the business policies of the organization, and if there is an opportunity to leverage the more granular capabilities of ICD-10 to achieve process optimization and refl ect the services provided accurately.

Eligibility and utilization management: Eligibility terms will need to be confi gured, while medical necessity, policy checks and associated protocols will have to be updated to utilize ICD-10 codes. Clinical documentation: To ensure appropriate clinical documentation is in place, it is critical to conduct a thorough assessment of clinical documentation processes to identify situations in which additional data is needed to assign the ap- propriate ICD-10 code. Results of the assessment can be used to target clinical documentation improvement initiatives. This

6 July 2012

includes not only training physicians and other caregivers in documentation techniques, but also evaluating and enhancing any documentation templates in electronic medical records systems. Capturing clinical documentation, including all rel- evant diagnostic data within the treatment record, improves the quality of care, enables improved billing and cash fl ow, and improves clinical and fi nancial audit results. Contract management, billing and reimbursement: Migra- tion to ICD-10 will require providers to describe patient conditions in a new way, refer to new coding guidelines and adhere to new documentation guidelines for the purpose of reimbursements. In many cases, ICD-10 classifi es clinical conditions and procedures differently than ICD-9-CM does. As a result, the conversion of complex payment methodolo- gies from ICD-9-CM to ICD-10 could have an unintended impact on aggregate payments to providers or the distribution of payments across providers. Understanding how new ICD-10 codes align with existing

ICD-9 contracts and reimbursements data will be critical to billing and coordination of benefi ts. The industry is bracing for an increased number of denials due to incongruities between the two coding systems. Denials may have several causes, such as improper eligibility checks or insuffi cient documentation for processing a claim. In order to manage against a spike in denials, providers will need to start analyzing the root cause of current denials and address process gaps.

How to prepare for the transition? Training: Training is of the utmost importance. Medical coders will require the highest level of training, as they will be responsible for coding the medical records. Some staff may just require training on diagnostic coding, while other staff will require training on diagnostic and procedure coding as well as anatomy and physiology. Profi ciency in computer- assisted coding will increasingly need to become mainstream. Physicians will need to be trained on ICD-10 and its clinical


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