Quirk Insights Oct. 17, 2013

OCT. 17,2013

Quirk Healthcare Solutions White Paper

Understanding the Impact of ICD-10 How To Achieve a Smooth and Successful Changeover

Understanding the Impact of ICD-10

INSIGHTS

About Quirk Healthcare Solutions Our team has worked with clients in industries ranging from one-physician clinics to nationwide organizations. Our staff includes physicians, nurses, MHAs, and MBAs to provide a multi-faceted view to all challenges. We’ve distilled what works, and we can provide an invaluable perspective. Everyone on our team brings real-world experience to the table.

We are doers, not theorists. This wealth of knowledge offers us a unique perspective into the strategies that work and those that don’t; we want to share the most effective ones with you.

PAGE 2 Understanding the Impact of ICD-10

Contents In Brief

3

ICD History: Regulatory Foundation & Governance

3

Relationship of HIPAA 5010 to ICD-10

4

ICD-10 Facts

4

Planning for ICD-10

5

Making the Transition

5

Suggested Action Items

7

Further Information

7

In Brief The healthcare industry is changing in every aspect, from

enable providers to continue delivering quality care in

Meaningful Use to PCMH to the Affordable Health Care Act.

every aspect of their practice. The information below will

ICD-10 is yet another piece of the puzzle. With proper

help you embrace these changes and set milestones for

planning, communication, tools, and materials, ICD-10 will

your organization’s success.

The healthcare industry is changing in every aspect

ICD History: Regulatory Foundation and Governance 1893 The Bertillon Classification is approved

by International Statistical Institute

1850

1900

1900 26 Countries implement the Bertillon Classification

1949 WHO creates the International Classification of Diseases (ICD)

1950

2011-2012 U.S. moves to HIPAA 5010

2000

1966 AMA develops Healthcare Current Procedural Terminology (CPT)

In the early 1890s, French statistician Jacque Bertillon created a death

the idea of systematically classifying the practice of medicine with the

classification system that became widely accepted and adopted by 26

development of the current CPT and HCPCS systems in 1966.

countries. Although Bertillon’s system originated in the 1800s, it was not until the middle of the twentieth century that it evolved to track both

Today, ICD is the most widely recognized and used disease classification

mortality and causes of diseases. In 1948, the World Health Organization

system in the world. The original 10-year release cycle has been shortened

(WHO) assumed responsibility for preparing and publishing revisions to

due to the rapid expansion of disease processes. A newly-developed plan

the classification system every ten years. In 1949, the sixth revision was

for a tenth revision, ICD-10, was endorsed by the World Health Assembly in

published as the Manual of the International Statistical Classification of

1990. In 2002, 138 countries implemented ICD-10 for mortality

Diseases, Injuries, and Causes of Death, or ICD-6. The AMA later extended

classification, while 99 countries used it for morbidity.

In the United States today, providers and

HIPAA 5010 modernizes the standards that regulate electronic transactions, and is therefore

clinicians are required to answer two questions

essential to the ICD-10 changeover. ICD-10 has increased the code field size from five to

in a standardized, codified format:

seven characters, and HIPAA 5010 requires upgrades to health information systems and

• What did you do? > Procedure Code • Why did you do it? > Diagnosis Code

technology to accommodate the longer codes in electronic format. In addition, HIPAA 5010 will eventually allow vendors to accommodate up to 12 diagnosis codes as compared to the current 8. For these and similar reasons, it was important to implement HIPAA 5010 before ICD-10.

On January 16, 2009, regulations were issued to mandate a new path for healthcare reform in the US. This resulted in the publication of two Final Rules for adoption of HIPAA standards:

ICD-10 Facts ICD-10 will be an entirely new experience for most providers. The following facts are of particular interest:

• Adoption of Version 5010. This was a revised set of HIPAA transaction standards for filing electronic claims.

• Modification of the standard medical data code sets for coding diagnosis and inpatient hospital procedures. This was done by adopting ICD-10 concurrently with ICD-9 until the latter’s replacement on Oct. 1,

There are currently 14,315 ICD-9 codes, compared to 69,099 for ICD-10.

2014.

Future rulemaking under HIPAA will include adoption of: • Standards for claims attachments.

• Claim attachment operating rules.

Codes can be up to 7 digits in length.

The 7th character classifies an initial encounter, subsequent encounter, or sequelae (late effect).

Therefore, providers should consider noting sequelae in their documentation.

• Health plan certification requirements, including all HIPAA standards and operating rules.

ICD-10 codes start with a letter. Every letter in the alphabet except U is used. By using alpha codes, ICD-10 creates enormous expansion capabilities.

Standard V codes in ICD-9 will become Z codes in ICD-10. The V codes in ICD-10 will reflect transportation accidents resulting in death.

The final ruling requires that any patient service with a date on or after Oct. 1, 2014 must be filed using an ICD-10 code.

The scope and impact of ICD-10 can seem overwhelming, on a par with learning another language. Therefore, timely planning is of critical importance.

PAGE 4 Understanding the Impact of ICD-10

Relationship of HIPAA

Planning for ICD-10 ICD-10 will have a major impact on every facet of health care,

decimal usage, code value definitions, descriptions, edit/logic

including policies and procedures, contracts, electronic data

changes, and database table modification.

exchange, reporting, research, revenue, and many other commercial healthcare components. ICD-10 implementation will

Through proactive planning, you can avoid negative business

also bear directly on guidelines regarding care planning, treatment,

trends as well as patient dissatisfaction. Practices can choose to

and management, both from CMS and commercial payers.

have a little pain now with extensive planning, or a lot of pain later with no planning. While Oct. 1, 2014 may seem distant enough for

To accommodate ICD-10 changes, your current software will

ample preparation, the ICD-10 changeover is a major

require modifications. These will include items such as field size

transformation and will require many hours of preparation and

expansion, alphanumeric field composition,

development. The federal deadline will arrive all too soon.

Making the Transition In 2009, a report issued by Deloitte Center for Health Solutions forecast that healthcare organizations implementing ICD-10 will fall into one of three categories:

15-20%

20-25%

Innovators

Collaborators

Collaborators will strive to achieve successful compliance by using 5010/ICD-10 as an opportunity to review and improve internal reporting, as well as to adopt advanced analytic and payment monitoring tools. Collaborators will likely break even and may experience added value in return for the costs of implementing new systems.

60%

Pragmatists Pragmatists will attempt to achieve the minimum required for compliance, including basic coding, EDI transactions, and CMS reporting. This minimalist approach risks failure due to new legislative requirements such as Meaningful Use, potentially resulting in loss of revenue opportunities.

Innovators will use 5010/ICD-10 and other ongoing legislative mandates as a change agent to renovate overall healthcare management, including contracting processes, advanced training, outcomes management, physician report cards, and possible business acquisitions. As a result, innovators will complete the transition with a dominant competitive/strategic position.

PAGE 6 Pragmatists

Collaborators

Achieve “Basic Compliance” 60% of Health Entities

Innovators Achieve “Strategic Value”

Achieve “Successful Compliance” 20-25% of Health Entities

Negative ROI

15-20% of Health Entities

Value Realization

Break Even

Competetive Advantage

Strategic Value

Benefit

CMSMandated Changes

Cost

Integration Level • Core Coding • EDI Transactions • Government Reporting

• Core Administrative & Revenue Cycle Processes

• Remediation of Internal Reporting

• Advanced Analytics • Payment Monitoring

• Transformed HCM, Contracting, & Business Acquisition • Advanced Training, Outcomes Management & Physician Score Cards

Most countries around the world have adopted ICD-10 since it’s inception

All three must work seamlessly to ensure success. Most EHR vendors

in 1990. Due to delayed adoption in the United States, it is difficult to

automate these components in one of two ways:

make a comparative analysis of the US to other regions.

Practitioners and healthcare organizations should give careful thought to systems integration, and should strive for a clinically-driven financial system. From an engineering perspective, the workflows in a healthcare setting consist of three components – Financial, Operational, and Clinical.

• A dual-system solution: A separate practice management database for scheduling, billing, AR management, etc. that integrates through and interfaces to an EHR database.

• A single-database solution: All three components reside on a single database.

Understanding the Impact of ICD-10

ICD-10 Adoption Maturity Model

Suggested Action Items • Assemble an internal team • Identify current software vendors and needs • Establish a timeline • Inventory systems and workflows • Determine the need for assistance from an outside vendor or consultant • Evaluate staff training needs • Execute an implementation plan • Document a contingency plan for a failed go-live As with all things, communication is key to success. Make sure your staff is aware and involved in the upcoming transition, and familiar with any contingency plan as well. Most importantly, make sure your personnel are well-trained and know who to contact with any questions or concerns.

Further Information A wealth of ICD-10 information is available online. Below are a couple of links to get started.

• To sign up for CMS email updates, go to: https://public.govdelivery.com/accounts/USCMS/subscriber/new?topic_id=USCMS_608 • To learn more about ICD-10 from CMS, go to: https://www.cms.gov/icd10/

For more information on how Quirk Healthcare Solutions can help automate your practice and bring you into compliance with the ICD-10 changeover, contact us at 855.WE.QUIRK or info@quirkhealthcare.com

www.quirkhealthcare.com

Understanding the Impact of ICD-10

PAGE 8

2MILLION

$

in Meaningful Use payments

five star rating

Quirk offers a full range of services for our clients Quirk Healthcare Solutions offers a range of services to prepare clients to successfully transition to ICD-10. Our services include: This includes: • Core Team Training • Provider Documentation Training • Document Customization • Template Customization • Internal testing to ensure proper functioning of software, including identification and resolution of any internal systems issues caused by creating or receiving transactions with ICD-10 codes • External testing to ensure transmission and receipt of ICD-10 transactions

For more information on how Quirk Healthcare Solutions can help your practice contact us at 855.WE.QUIRK or info@quirkhealthcare.com

www.quirkhealthcare.com

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