Financial Risk Management and Mitigation in ICD-10 Implementations

Transcription

1 Financial Risk Management and Mitigation in ICD-10 Implementations HFMA Forum Virtual Networking Event May 21, :00 am 11am Central/11:00 am 12:00 pm Eastern John K. Dugan National ICD-10 Leader PwC Mark A. Avery National ICD-10 Director PwC Anthony Pelezo, MD ICD-10 Program Manager Ascension s Sacred Heart Health System

2 Agenda Strategies and tactics for ICD-10 financial risk management Questions & Comments 2

3 WEDI Survey Update Because of the magnitude of ICD-10 it is critical that organizations complete their remediation efforts as quickly as possible in order to allow adequate time for testing. The survey results show that projected timeframes for testing have shifted and many organizations will not begin this task until Jim Daley, WEDI Chairman 3

4 WEDI Survey Update Over 40% of provider respondents indicated they did not know when they would complete their impact assessment. About half of the providers responded that they did not know when testing would occur. About two thirds of vendors indicate they plan to begin customer review and beta testing by the end of this year. Almost half of the health plans expect to begin external testing by the end of this year. 4

5 Financial Risk Management and Mitigation Must Focus on Cash Key Risks Directly Impacting Cash Increased denial rates: Denials are expected to increase by % DNFB increases due to Coder loss of productivity is estimated to be between 20-50% Increases in days to payment (A/R) Accounts receivable days are expected to expand 20-40% Impact of delayed revenue on loss of interest Claim error rates are expected to increase from 6-10% (current state 3%) References: HIMSS ( AHIMA ( 5

6 Payer and Provider Collaboration is the Key to Success Key Outcomes: I. Effect Change in Clinical Documentation II. III. IV. Ensure Proper Coding/Limit Audit Risk Complete Accurate Claims/Limit Staff Burden Validate Payer Rules/Prevent Denials V. Optimize Business Process Modeling Legend: ICD-10 Impacts Impacted Step External Processes Internal Processes Issue Remittance Advice Outlining Any Non-Covered Proc/DX Release Funds to Provider A/R and Finalize Payer Responsibility Review Lessons Learned for: ICD-10 DX, P4P, and Grouper Assignment Review Managed Care Contract Fee Schedule for Services Verify Proc/DX Are Payer Responsibility START: Provider Cert/ MC Contracting Establish Business Relationships under ICD-10 START: Registration & Provider Pre- Cert/ MC Contracting Authorization Update Bill Edits & Registration & Secondary Payer/ Medical Policy Patient Encounter Pre-Authorization Additional Proc/DX Patient Responsibility A/R Claiming, Collections, & Bad Debt Secondary Payer/ Management Patient Responsibility A/R Remit Payment to Provider Price & Adjudicate Claim Check Benefits/ Determine Payer Provider Authorization Responsibility & Claim Rules Claim Submission/ Intake ICD-10 Implementation Revenue Cycle Physician Diagnoses Patient Staff/System Coding Determine Payer Responsibility & Claim Rules Ensure Claim is Received by Portal and In Que for Payer Review Clinical Documentation Quality Assurance Staff/System Coding Track Admitting DX and Contact Payer to Validate Benefits Patient Encounter Physician Diagnoses Patient Clinical Documentation Quality Assurance Update Bill Edits to Prevent Service Denials Train, understand, & change coding practice based on ICD -10 changes Ensure Documentation of Proc/DX, POA, and Medical Necessity in Medical Records Review Internal Bill Edits And Regression Testing To Capture Proper ICD-10 Reimbursement 6

7 ICD-10 Financial Impact Management Framework Strategize, Plan, Prioritize, Mobilize & Manage 8. Refine & Implement 1. Define Goal 7. Analyze Results 6. Execute ICD-10 FIM Cycle (repeat for each financial impact) 2. Define Scope 3. Design Method 5. Establish Tolerances 4. Develop Data Communicate, Train & Monitor

8 Financial Risk Mitigation: Understanding the Scope and Risks Revenue Cycle From Registration to Clinical ICD-10 IT Architectural Readiness Resource Requirements Decreased and/or Delayed Collections Payment Policy Changes Payer System Alteration 8

9 Revenue Cycle Financial Risk Mitigation: Coding Productivity loss/coding deficiencies Productivity loss estimated 10-50% loss in productivity depending on literature Short-term productivity loss will be higher and more pronounced System deficiencies/lack of readiness ICD-9 and ICD-10 business process gaps Documentation deficiencies CDI Key activities necessary to mitigate the impact of coder productivity Create a comprehensive HIM staffing plan for the next three years Integrate increases in coding productivity in the model ICD-10 coding tools Begin training now prepared for workflow disruption (e.g., hours of education year one, boot camps 3-5 days) A&P takes a dominant role in ICD- 10-CM, ICD-10 PCS is a marked deviation from current ICD-9 Volume III codes Dual Coding should begin now References: HIMSS ( AHIMA ( 9

10 Revenue Cycle Financial Risk Mitigation: CDI ICD-9 and ICD-10 business process gaps Documentation Deficiencies and CDI Known deficiencies exist today Known documentation deficiencies in ICD-9 do not necessarily line up with ICD-10 Key activities necessary to close gaps and improve documentation deficiencies Dual coding should include the capture of ICD-10 documentation deficiencies Aggregate ICD-10 documentation issues Sort by frequency and importance Create query and other documentation process improvements specific to ICD-10 (e.g., transfusion, TPN, laterality, Gustilo) Integrate the behavioral changes beginning in

11 Revenue Cycle Financial Risk Mitigation: CDI (cont.) ICD-9 and ICD-10 business process gaps Documentation Deficiencies and CDI Known deficiencies exist today Known documentation deficiencies in ICD-9 do not necessarily line up with ICD-10 Key activities necessary to close gaps and improve documentation deficiencies Physician training is key everything begins with good documentation Create a plan to educate physicians by specialty type Provide rapid access tools and resources Review EMR systems for ICD-10 functionality Look up functionality Short lists 11

12 IT Architecture Financial Risk Mitigation: System Readiness IT System Readiness Necessary for claim submission and payment All required upgrades must be completed in sufficient time for business process remediation, testing and training Key system readiness activities IT application inventory and schedule for upgrades should be defined now Competing projects may create resource challenges True remediation costs are likely to be higher than estimated Inventory and stratify by system importance not all systems are critical in the information to claim production pathway Key external stakeholder IT systems must be assessed/risk managed Not all IT Vendors currently have ICD-10 compliant applications Risk mitigation is essential 12

13 Payment Policy Financial Risk Mitigation: Payer ICD-9 and ICD-10 business process gaps Payment Policy and PA Payer policies permeate the outpatient and professional code realms Hundreds of payers thousands of policies where to begin? Key activities to mitigate the impact of Payer policy changes Aggregate Payment Policy denials (e.g., NCD, LCD, commercial medical policy, sp:dx policies) Sort current denials by frequency and importance Analyze the policy and determine the accuracy Make no assumption about the completeness of a payer policy Define missing code gaps 13

14 Payment Policy Financial Risk Mitigation: Payer (cont.) ICD-9 and ICD-10 business process gaps Payment Policy Payer policies permeate the outpatient and professional code realms Hundreds of payers thousands of policies where to begin? Key activities to mitigate the impact of Payer policy changes Send ICD-9 policy revision requests now for those policies that are incomplete Review impactful/sensitive ICD-10 policies and submit recommendations early input will be valuable Prior Authorization Educate physicians and other staff on ICD-10 policy requirements Ensure registration and claim scrubbing technology incorporates diagnosis requirements for ICD-10 14

15 Payment Policy Financial Risk Mitigation: Payer (cont.) ICD-9 and ICD-10 business process gaps Payment Policy Contracting - an essential part of the revenue risk management process Key activities to mitigate the impact of payer policy changes Review all payer contracts for ICD-10 impacts (inventory) Create language that: Ensures similar payment for similar services pre and post ICD-10 implementation Allows for reimbursement renegotiation or reconciliation with defined timelines Review and recommend adjustments in TFL, appeal TAT, other Ensure appropriate adjustment of P4P/Quality-based reimbursement language Develop dashboards for monitoring of payment post go-live 15

16 Payer Financial Risk Mitigation: Payment System Alterations Payer revisions to payment requirements Risks in both ICD-9 and ICD-10 based reimbursement Requires substantial internal/external testing and regression testing Will encompass more than simple dictionary changes Inpatient policy changes Payment overhaul (Florida Medicaid migration to DRG MS/APR/APS) Payer requirements for claims submission will vary Use of reimbursement mapper by payers Key payment readiness activities Plan for comprehensive external testing: Medicare/MA plans Florida Medicaid Top 20 commercial plans Develop comprehensive set of test scripts/test cases: DRG top 25 focus (requires 9-based modelling for Medicaid) Targeted medical policy px:dx logic (OP/Professional) Pay percent testing PA/eligibility logic testing Compile claim submission requirements by payer 16

17 Payer Financial Risk Mitigation: Payment System Alterations (cont.) Payer revisions to payment requirements Risks in both ICD-9 and ICD-10 based reimbursement Requires substantial internal/external testing and regression testing Will encompass more than simple dictionary changes Inpatient policy changes Payment overhaul (Florida Medicaid migration to DRG MS/APR/APS) Payer requirements for claims submission will vary Use of reimbursement mapper by payers Key payment readiness activities Create ICD-10 test lab: Data modelling Review of top diagnoses tied to revenue DRG revenue modelling Medicare, Medicaid, and commercial DRG key driver identification Work with payers to test and to identify processing defects Identify payment disparity and determine root causes/patterns Compile claim submission requirements by payer 17

18 Summary of Risk Mitigation Activities Collaborate with payers and key vendors Establish a framework with key performance indicators to manage financial risk mitigation activities Take a holistic approach to revenue cycle remediation (e.g. patient access, medical necessity, patient financial services, denials) Leverage comprehensive claims data analysis to support dual coding and testing Understand the likely changes in payment policies, DRG groupings and new clinical documentation requirements 18

19 Questions & Answers Ask the speakers a question or share your ICD-10 financial risk management experiences. Just type your question or comment into the Q&A box on your computer screen. 19

20 Contact Information John Dugan National ICD-10 Leader PwC Mark Avery National ICD-10 Director PwC Anthony Pelezo, MD ICD-10 Program Manager Ascension's Sacred Heart Health System Todd Nelson Technical Director, Senior Financial Directors/Accounting HFMA 20

21 Remember to Complete the Program Evaluation CPE Information To receive CPE Credits for this webinar. You must complete it within 2 working days. The URL below will take you to the HFMA on-line evaluation form. You will need to enter your member I.D. # (can be found in your confirmation when you registered) You will also need to enter this Meeting Code: 13AT33 URL: Your comments are very important and enable us to bring you the highest quality programs! If you have any questions or do not know your id # you may contact Member Services , ext 2 21