Juliet A. Santos, MSN, CCRN, FNP-BC Sr. Director, HIMSS ......What is ICD-10-CM/PCS? （甚麼是ICD-10-CM/PCS？ ） •ICD-10-PCS consists of about 73,000 procedure（程序）codes

ICD-10 Implementation: High Level Overview for Organizational Leaders, Part 2

（ICD-10之實踐：組織決策高層應當知曉之輪廓—第二部分）

Juliet A. Santos, MSN, CCRN, FNP-BC

Sr. Director, HIMSS Business Centered Systems & Medical Banking Project

Learning Objectives（學習目的）

I. Identify（識別）organizational risks（風險） related to ICD-10 implementation.

II. Discuss technology risk assessment areas to include in implementation process.

III. List financial risk mitigation（降低財務風險） strategies to be included in planning for ICD-10 by organization leaders and project owners.

2

What is ICD-10-CM/PCS? （甚麼是ICD-10-CM/PCS？ ）

• International Classification of Diseases, 10th Revision

• CM: Clinical Modification of World Health Organization’s ICD-10

• PCS: Procedure Coding System

• CM & PCS: level of detail needed in the United States

• Provides code titles and language that complement accepted clinical practice in the United States

• ICD-10 is much more detailed than ICD-9

• ICD-10: 69,000 diagnosis codes

• ICD-9: 13,000 diagnosis codes 3

What is ICD-10-CM/PCS? （甚麼是ICD-10-CM/PCS？ ）

• ICD-10-PCS consists of about 73,000 procedure（程序）codes

• ICD-10 has the potential to reveal more about the quality of care so that data can be used in a more meaningful way to better understand complications（併發症）, better design clinically robust algorithms, and better track outcomes of care.

4

You Must Really Understand ICD-10

（你必須真正了解ICD-10）

• ICD-9 and ICD-10 are derived from the WHO’s（世界衛生組織之）ICD (International Classification of Diseases & Related Health Problems)

• ICD is the international standard diagnostic classification（國際標準診斷分類）for all general epidemiological（流行病學的）and health assessment purposes

• Used for all health records, vital（維生）records and death certificates provides basis for the compilation（編輯） of national mortality and morbidity statistics by WHO Member States（會員國）

5

Why Replace ICD-9? （為何取代ICD-9？）

• Lacks sufficient specificity（特異性）and detail（細節）

• Running out of capacity –limited structural design cannot accommodate advances in medicine and medical technology and growing need for quality data（優質數據）

• Obsolete and no longer reflects current knowledge of disease processes, contemporary（當代的）medical terminology or the modern practice of medicine

• Limited data to compare costs, outcomes（結果） of different medical technologies

• Cannot support US transition to an interoperable data exchange

• Unable to share same global data regarding morbidity（發病率）and mortality（死亡率）—critical（必不可缺的）for public health reporting

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Value of ICD-10（ ICD-10之價值） • Greater coding accuracy（正確性） and specificity

• Higher quality information for measuring（計量） healthcare service, quality, safety, and efficiency（效率）

• Improved efficiencies and lower costs

• Reduced coding errors---eventually!

• Greater achievement of the benefits of an HER

（電子健康紀錄）

• Recognition of advances in medicine and technology

• Alignment（不相牴觸） with coding systems world wide

• Improved ability to track and respond to international public health threats

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Organization-wide Risk Identification

（組織全面風險確認）

• Identify and rank（分等級）all organizational risks

• Complete gap analysis（差異分析）

• Update all implementation plans and schedule based on risks

• Update project resources

• Update project budget

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Identifying Organizational Risks

（識別組織之風險） • Complete all assessments first

• Steering committee and project team must review all findings to identify and rank（分級）organizational risks

• Risk ranking will provide organization with list of impact areas that deserve focus（注意）first

• Risk ranking will provide organization with information to develop an overall strategy for process and systems modification（修改）, testing and Go-live（可推出時機）

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Include in Risk Assessment

（風險評估包括 ）

• Technology

• People

• Processes

• Finance/Revenue Cycle

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Technology Risk Assessment

（科技風險評估） • Admissions/Scheduling

• EMR/EHR/Coding software

• Encoding application

• DRG（診斷關聯群） Grouper

• Billing software

• Payment management

software

• Auditing

• Lab System

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Technology Risk Assessment （科技風險評估）

• Pharmacy system

• Clinical system

• Cancer registry system

• Report database/server

• Research databases

• Additional/others

12

Human Resources/People Risk Assessment

（人力資源/人群風險評估） • Accounting/finance staff

• Admitting staff

• Clinical staff

• Coding staff

• Medical billers

• Contractors

• HIMS staff

• IT staff

• Operations management

• Patient outreach

• Software developers

• Senior management

• Revenue cycle staff

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Processes Risk Assessment（進程風險評估）

• Accounting/finance

• Admitting

• Case review

• Claims processing

• Clinical operation

• Coding

• Communication

• HIM operations

• IT support

• Marketing

• Operations management

• Reporting

• Senior management

• Training

• Others

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Conduct a Gap Analysis（實施差異分析） • Identified as areas requiring

modification either to a system, process or function

• Risk assessment provides project team with the order to complete the gap assessment activities

• Must have knowledgeable resources to identify specific steps required to transition systems, operations, testing, deployment of new systems and resource knowledge to ICD-10

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Updating Implementation Plans & Schedule （更新實施計畫及日程表）

• Work with internal and external team to update the work for tasks

• Determine duration（期間長短）, resources and budgetary requirements

• Identify tasks with longest duration

• Set realistic estimates for time of completion

• Incorporate（納入）vendors in planning

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Updating Project Resources （更新企劃案之資源）

• Appropriate resources must be assigned to new tasks

• Evaluate（估算）resources—people, financial/budget

• Will require many resources to complete each task

• Project sponsors need to acknowledge commitment to successful completion

• Make adjustments to project schedule and resource requirement based on risk

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Updating Project Budget （更新企劃案預算）

• Develop an accurate project budget as much as possible

• Account for（預先考慮）multiple variables that can get out of hand

• Estimates（估計數字） should be approved by the steering committee （指導委員會）

• Identify a resource to manage the budget in finance

• Allocate resources for developing and monitoring the budget

• Budgeting process can be cumbersome （難以處理）for 1 individual resource—can assign this task to a team

• Consider a budgeting committee to accommodate （照顧到）work load requirements

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Resource Estimates for Software （軟體上之資源估計）

• Software modifications will be

the most costly for entire budget

• Include staff time, process improvement and education expenses

• Include estimates from all vendors and contractors

• Include contingency （意外事故）and reserve （儲備）estimates – ask for this

• Costs can vary by vendor—fixed fee, cost-plus, time and materials contract

• Be careful of contracts with unforeseen expenses 19

Ask Vendor for the Following: （要求賣方提供事項）

• Scope of work to complete modifications

• Milestones（里程碑）required to complete project work

• Time estimate（預估達成所需時間）for each milestone

• Vendor/contractor resource cost for each

• Requirements for your organization to complete during project required

• Contract（合約）type

• Terms of contract (payment terms)

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Updating the Work Plan （更新工作方案）

• Include timelines（時程計畫） and schedule for completing work to modify each software

• IS lead should work closely with project manager to update work breakdown structure

• Ensure that all necessary tasks are included

• May need additional support—adjust to include tools and resources required

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Example Project Milestones for Software （軟體上企劃里程碑案例）

• Complete training

-reserve training environment

-schedule training resources

-configure（設置）training work stations and environment

-complete training activities

-complete validation

-configure test server

-configure test applications

-configure test interfaces

-validate（確認合乎需要）test user settings

-complete testing & validation phase

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Preparing the Testing Environment （籌設試驗環境）

• Testing environment includes hardware, software, training documentation, processes, system diagrams and team members to complete activities

• Software environments for test purposes must be separate from production environments and dedicated to（奉獻給） testing activities

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Including Production Data in Test Systems （把製造數據納入試驗系統）

• Utilize valid data for testing purposes

• Should include demographic（人口統計學上）information but needs to match the system information

• Include dates of services—all must match with the system data

• This scenario（預設情境）is helpful in volume testing

• Utilize test data in test systems—other option（選項）

• This method is easier for end to end testing—easier to move downstream and upstream

• Helpful to limit the volume data required to complete testing

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Developing External Coding Support Team （開發外在編碼支持團隊）

• Consider establishing a temporary help desk（臨時協助櫃檯）

• Can reduce failed claims due to edits of unnecessary holding of claims due to unclear documentation specificity.

• Temporary help desk can be linked to HIMS coding experts

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Coding Help Desk for Go Live （為妥當推出之編碼協助櫃檯）

• Could support clinical departments

• Clinical documentation improvement (CDI) staff

• Hospital-based outpatient clinics physician practice coders

• Patient access services

• Patient financial services

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Post Implementation Risk Mitigation （付諸實施後之風險減輕）

• Implementation activities finished but project work is not

• Includes extensive issue resolution

• Monitor software functionality and configurations（結構） that were missed

• Review lessons learned to provide additional educational opportunities for team

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Consider These Action Steps （考慮以下行動步伐）

• Identify Go-live issue resolution activities

• Summarize project results

• Evaluate success against established criteria（既有的判斷標準）

• Identify lessons learned

• Assess project for future improvement

• Celebrate your success

• Plan for next steps with payers

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Next Steps with Payers （跟付費者之間的未來）

• Will most likely take 2 years to collect data before payment rates are adjusted（被調整） based on ICD-10

• Payers can take as much time as they need before making adjustments to payment rates

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Information Systems Post Implementation Activities（實施活動後之資訊系統）

• Resolve outstanding issues（解決尚未了結束之問題）

• Summarize project results

• Evaluate vendors

• Work with IS to manage increase data flow

• Legacy（原有的）software systems and databases—how are they holding up（保持可用）?

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HIM Post Implementation Activities （ HIM 之實施後活動）

• Benchmark（基準）and review specific measures—discharged, not final billed/coding team productivity, query（質疑）rate, failed claim rates

• Continue quality review action plan

• Communicate success and provide support—continue help desk or call line for patient care providers as long as needed until business operations return to acceptable, pre-ICD-10 targets

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Reimbursement Implications（償還牽扯）

• Significant with the transition to ICD-10—allows for clearer alignment（契合）with services to conditions treated

• Reimbursement more in line with services rendered—no consideration to reimbursement

• ICD-10 can be revised and updated as needed based on new diagnosis, medical procedures and technologies

• Greater detail leads to better justification of medical necessity

• Coding errors can be a focus of fraud （欺騙） and abuse （濫用）—need to eliminate continued coding errors as soon as possible

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Reimbursement Implications（償還牽扯）

• Timely turnaround（適時週轉）and fewer rejection of claims will be the main focus of providers to maintain cash flow during and following the transition to ICD-10

• AHIMA（美國健康資訊管理學會）estimates 6-9 months of steep（大起大落的）learning curve for experienced coders

• Detailed information provided in patient record will make code selection more precise

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Engage Your Bottom Line:（保證你的底線）

Understanding the Financial Implications

of ICD-10（了解ICD-10 之財務牽扯）

Courtesy（友情提供）of Wells Fargo & Pershing, Yoakley & Associates, P.C

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Learning Objectives（學習目的）

• Identify financial implications of ICD-10 on small and large systems as well as individual（個體的）and small providers

• Examine the ICD-10 impact on cash reserves（現金儲備）and how to protect and manage reserves

• Review the status（狀況）of the healthcare industry in terms of financial readiness and industry options for providers for funding ICD-10

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• Documentation Analysis • ICD-10 Education • Process Improvement • Monitoring

ICD-10

• Physician Documentation • Physician Integration • Physician Performance

• Staffing Effectiveness • Assessment of Revenue Impact • Process Improvement

• Decision Support Reporting Impact

• IT Systems • Capability, Communication • Functionality • Vendor Preparedness

• Front – Scheduling, Access Areas • Middle – Coding, CDI, Case Management • Back – Billing, Reimbursement

Physician Office

Post Acute Services

Revenue Process

Information Technology

Physician Operational

Planning

Health Information Management

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CMS’s Annual Initially Estimated Costs over 7 Years for ICD-10 （內容管理系統年度初步估算ICD-10之 7年費用） (in millions)

Year 2011 2012 2013 2014 2015 2016 2017

Training Coders – Inpatient $0 $0 $32 $159 $21 $0 $0

Coders – Outpatient $0 $0 $12 $96 $12 $0 $0

Code Users $0 $0 $4 $33 $4 $0 $0

Physicians $0 $0 $104 $835 $104 $0 $0

Subtotal $0 $0 $152 $1,123 $141 $0 $0

Productivity Coders – Inpatient $0 $0 $0 $10 $0 $0 $0

Losses Coders – Outpatient $0 $0 $0 $9 $0 $0 $0

Physician Practices $0 $0 $0 $12 $0 $0 $0

Improper and returned claims $0 $0 $0 $0 $329 $165 $49

Subtotal $0 $0 $0 $31 $329 $165 $49

System Providers $23 $45 $75 $8 $0 $0 $0

Changes Software vendors $17 $35 $58 $6 $0 $0 $0

Payers $30 $59 $99 $10 $0 $0 $0

Government $77 $154 $256 $26 $0 $0 $0

Subtotal $147 $293 $488 $50 $0 $0 $0

TOTAL COST (IN MILLIONS) $147 $293 $640 $1,204 $470 $165 $49 38

Minich-Pourshadi, Karen. “ICD-10 Puts Revenue at Risk.” HealthLeaders Media Intelligence (July 2011), p. 22. 39

（預計收入會降低之最大原因）

Minich-Pourshadi, Karen. “ICD-10 Puts Revenue at Risk.” HealthLeaders Media Intelligence (July 2011), p. 19. 40

（預計變成ICD-10準備妥當前所需費用）

• According to the American Society of Clinical Oncology, Estimated Organizational Cost by Bed Size

Financial Risk Management Concerns （財務風險管理上重要議題）

Bed Size Cost

400 + $1.5 Million – $5 Million

100 – 400 $500,000 – $1.5 Million

< 100 $100,000 – $250,000

Decrease in Cash Flow / Loss of Revenue Industry experts from CMS and AHIMA estimate the following:

– Denial rates will increase by 100% to 200%

– Accounts receivable days will be extended by 20% to 40%

– Healthcare organizations will be hindered with payment declines for more than 2 years after the implementation Date of October 1, 2013

– Claims-error rates will increase from 6% to 10 % (The average current rate is close to 3%)

41

Risk Mitigation Strategies（減輕風險策略）

Determine organizational structure and departmental responsibilities and readiness for the impending transition to ICD-10

Create an ICD-10 impact awareness throughout the organization

Develop projections of operational needs, including staffing and internal educational training

Identify specific documentation gaps to determine focused educational needs

Calculate potential impact on financial results

1

2

3

4

5

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Risk Mitigation Strategies（減輕風險策略）

Key Areas of Revenue Cycle

Data Integrity – prepare for

delayed accepted batches

IT Preparedness – prepare for payor

/vendor delays

Adjust AR Reserves as Needed

HIM Preparedness Denial Tracking

Tool

Rightsize staff to handle increased

volume

Budget for potential cash flow

impact

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Risk Mitigation Strategies（減輕風險策略）

1. Focus on good documentation, which directly impact accurate billing and payment timing

2. Be aware of（注意）new ICD-10 documentation guidelines（指導方針）in order to evaluate provider documentation for appropriateness（適當）, thoroughness（徹底）, and completeness（完備）

3. Take great care to document（撰文紀錄） produces（製品）, labs, and diagnostics performed in order to capture the essence of the total care provided during hospital admissions

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Risk Mitigation Strategies（減輕風險策略）

4. Collaboration, transparency（透明化）, and communication between payers and providers

5. Train and problem solve through the use of task forces（工作小組）

6. Encourage CMS to continue perfecting payment groupers and mappings

7. Collaborate with other healthcare stakeholders（利害關係者）to create an industry test bed

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Sample ICD-10 Financial Impact Analysis （ ICD-10財務衝擊分析案例 ）

Coders Training

Current Coders 15

Anticipated new hires 100%

Coder Recruiting Costs $30,000

Coder Training

Initial Training Hours 2013 (Existing Coders) 50

Initial Training Costs per hour $50

Annual Training Costs per hour $25

Coder Productivity

Decrease during Transition Period 29%

Decrease during Permanent Period 15%

Outsourced Coder Cost per year $100,000

Clinical Documentation Training

Number of Physicians 100

Upfront Group Training Sessions

Number of Training Sessions 5

Cost per Hour $500

Total Group Training Costs $20,000

One-on-One training

Ongoing Training Costs per hour $200

Hours of ongoing training per physician 10

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Preliminary ICD-10 Implementation Budget （初步實施ICD-10預算）

Cost Area 2011 2012 2013 2014 2015 2016

Total Training $ - $ 40,500 $ 468,000 $ 27,000 $ - $ 535,500

IS Staff Augmentation $ 115,000 $ 1,240,000 $ 840,000 $ 265,000 $ 50,000 $ 2,610,000

HIM Coding Staff Augmentation $ - $ 35,000 $ 180,000 $ 165,000 $ 65,000 $ 545,000

Revenue Cycle Staff Augmentation $ - $ - $ 135,000 $ 220,000 $ 220,000 $ 575,000

IS Software Upgrades $ 75,000 $ 430,000 $ - $ - $ - $ 505,000

Technology Upgrades $ 10,000 $ 10,000 $ - $ - $ - $ 20,000

New Software $ - $ 1,700,000 $ 380,000 $ 280,000 $ 280,000 $ 2,640,000

Reports and Forms $ - $ 150,000 $ 115,000 $ - $ - $ 265,000

Interface and Other Testing $ - $ 260,000 $ 260,000 $ - $ - $ 520,000

TOTALS: $ 200,000 $ 3,865,500 $ 2,378,000 $ 957,000 $ 815,000 $ 8,215,500

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How should we prepare for ICD-10 cash flow delays? （吾們應如何預備ICD-10造成之現金流轉延緩）

Healthcare providers（醫護提供者）can best prepare for anticipated（預期中的）cash flow delays by beginning to plan now. Some areas to consider include, but may not be limited to:

Expenses Receivables

Your primary relationship banker or financial institution

Your primary third party payers

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• Renegotiate（重新談判）terms with major suppliers to create a more balanced payment schedule over time

• Identify and implement other cost saving measures（其他節省開支辦法） in advance of October 2013

• Aggressively manage inventory levels to avoid expensive overstock costs

• Reduce other administrative overhead （行政經費） where possible

Focus on expenses（注意費用支出）

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• Manage your Accounts Receivable (AR) aging aggressively, minimize charge-offs（報廢的呆帳）and denied payments

• If you have not already done so, consult with your banker about adopting best practices, procedures, and products that will enable you to collect patient co-pays or deductibles at the time of patient encounter

• Work all denials and rejects aggressively to eliminate their occurrence and ensure more first time third party payer payments

Focus on receivables（注意應收款項）

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• Request a working capital model/forecast

• Seek their advice on banking services they can provide to accelerate days in AR, extend suppliers terms and days in Accounts Payable (AP)

• If there is agreement that it is needed, consider a working capital line of credit（工作頭寸上之限額信用貸款） to minimize the disruption for ICD-10 cash flow delays that are outside of your control, such as higher payer denials or rejects

Establish a dialogue with your primary relationship banker or financial institution now

（趕緊跟你的銀行建立一個對話機制）

51

• Learn how each one plans to prepare

for ICD-10 changes, ask if they are

implementing new rules for claims

submission or re-submission

• Share your plans for implementing

these changes with them

• Identify shared goals and objectives to

ensure a combined approach,

minimizing disruption to either’s

coding processes (win-win)

Establish dialogue and candid discussions with your primary third party payers now

（趕緊跟你的主要第三方付款者建立一個坦率的對話機制）

52

How much cash flow should we put away in order to sustain our business? （為了維持生意我們應該儲存多少現金流量？）

There is no magic number that will work for every healthcare provider. Each situation is unique. Your specific situation will need to be carefully considered by your senior management in consultation with their trusted financial advisor or banker.

6 months?

12 months?

Longer?

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What kind of financial questions should we be asking our financial institutions if we are a large hospital? Or a small

provider group in private practice? （如果是家大醫院或是小的私立醫護診所，我們須問銀行哪類財務問題？）

• Regardless of the type of healthcare provider, the questions are the same :

– Can you help me forecast（預估）my working capital?

– What steps can I take now to manage some of this myself?

– What additional products and services can the bank offer to accelerate days in AR and extend suppliers term and days in AP?

– What credit products（債信產品） can help with unexpected negative （負面）impacts to working capital during the initial period of transition to ICD-10 codes in late 2013 and early 2014?

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What other strategies should we implement to prepare to manage financial risks?

（為準備管理財務風險我們應實施哪些其他策略？）

• Ensure you have identified all of the changes required in your systems and processes. Many payers and providers are approaching this as merely a code or system change. It is important to give thorough consideration to the following questions:

– How and where in all of your processes and workflows will accurate coding come into play?

– What are the potential organizational impacts of coding errors（編碼失誤） that could ultimately lead to member or patient dissatisfaction and contribute to higher administrative costs?

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What other strategies should we implement to prepare to manage financial risks?

（為預備因應財務風險我們應該實施的其他策略）

• Engage in active and candid discussions with your primary third party payers.（去跟你的主要第三方付費者做積極懇談。）

– Work together with your payers to identify shared goals（共同目標）and objectives（目的）in order to minimize the disruption（阻撓）to either coding processes.

– Determine and understand any changes your payers are implementing in their claims submission or resubmission policies and procedures as a result of ICD-10 code changes.

– Share your plans for implementing ICD-10 code changes（告知對方你實施ICD-10 編碼更改之計畫）, including your system changes and timing, staff training（包括以的各種系統更改及日程、職員訓練）, and any additional oversight（以及任何其他外表不明顯之處 ） you are going to implement as you make this transition.

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Why is understanding our company’s valuation important? （為何了解本公司之價值估計甚為重要？）

• Your banker or trusted financial advisor is in the best position to help you understand the importance of your company’s valuation and determine appropriate strategies for your specific situation. （你的銀行家或是為你信任的財務顧問是幫助你了解你的公司價值估計之重要性以及決定何者才是因應你的特殊情況的適宜策略之最佳人選。）

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What kinds of financial planning should we do internally and with banks? （我們應該在內部及與銀

行間進行哪類財務計畫？）

• Conduct a payables and receivables audit（查收支帳）. If you have the ability, complete a preliminary working capital analysis.

• Next, discuss these findings with your banker or trusted financial advisor. If you are uncertain how to get started, your banker or financial advisor should be able to assist you. Your payer discussions can be held without assistance from your bank.

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What are some examples of successful exit strategies for smaller providers?

（何者為小提供者退出策略之成功案例）

• The answer will differ based on your specific situation. It is best to consider an array of options（多數量的其他可用選項）and triggering events（轉喚情況）, in consultation with your banker or trusted financial advisor.

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When should I begin to prepare to have my working line of credit pre-approved? （何時我應開始準備讓

我的工作有限信用貸款提前批准）

• You should begin preparing now so your balance sheet and income statement can weather any temporary disruptions that may be caused by the healthcare industry ICD-10 transition. ICD-10 is one of the most significant changes recently required and is happening at the same time as several other healthcare regulatory and market changes – Meaningful Use, Medical Loss Ratios, Affordable Care Act (ACA), Accountable Care Organizations (ACO) – and is impacted by the preceding 5010 format changes for all HIPAA transactions to accommodate the ICD-10 code changes.

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Questions? （有問題嗎？）

Contact information:

Juliet A. Santos, MSN, CCRN, FNP-BC

HIMSS Senior Director, Business Centered

Systems & Medical Banking Project

[email protected]

Cell phone: 312.909.9602

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