HFMA WEBINAR. Assessing the Productivity and Financial Impact of ICD-10: The Final 12 Months

Transcription

1 HFMA WEBINAR Sponsored By: Assessing the Productivity and Financial Impact of ICD-10: The Final 12 Months Date: October 15, 2013 Time: 2:00 3:30 p.m. Central (12:00 1:30 pm Pacific/1:00 2:30 pm Mountain/3:00 4:30 pm Eastern) Follow this link (or paste it into a browser) to connect: Please log in 10 minutes early and test your computer as this is a new platform: Enter platform where it says guest type in your first and last name only it is very important especially if you need CPE credit so that your attendance is accounted for You will Not be using your telephone, but will hear the audio via your computer speaker Online live seminars are broadcast over the web via Adobe Connect. You'll need a computer with a browser, Adobe Flash Player 10.1, and Internet connection. Test your connection to Adobe Connect: Login issues to check first: Are you connected to the Internet? Disable popup blocker software. Clear the browser's cache. Try connecting from another computer. Are you accessing the correct URL? Audio Issues: Close all Microsoft Applications, especially Outlook and Messenger. Having Outlook open absorbs almost 50% of the bandwidth which may cause intermittent audio interruptions. If you have questions regarding registration or connection please call HFMA Member Services at ( , ext 2). CPE Information: To receive CPE Credits for this webinar you must participate in online polling during the webinar and complete the online program evaluation within 2 working days. After 2 working days online programs will be inactive and you will not receive CPE Credit. The URL below will take you to our on-line evaluation form. You will need to enter your HFMA I.D. # (found in your confirmation ) You will also need to enter this Meeting Code: 13AT51 URL: You may also connect directly from the last slide of the live webinar Your comments are very important and enable us to bring you the highest quality Programs! To review your CPE information, please visit the HFMA web site at log into your profile, and retrieve all CPE information (by date) within your "CPE Center.

2 Sponsored By: Assessing the Productivity and Financial Impact of ICD-10: The Final 12 Months October 15, 2013 (12:00 1:30 pm Pacific/1:00 2:30 pm Mountain/2:00 3:30 p.m. Central/3:00 4:30 pm Eastern) Cindy Cain, Senior Director of Physician Services Chris Edmonson, Vice President of Client Reporting Jay Anders, M.D., Medical Director

3 This Session s Presenters Cindy Cain Senior Director of Physician Services McKesson Cindy has over 25 years of multi-specialty healthcare experience in medical operations, practice acquisitions, billing operations and account receivables management. Her focus on ICD-10 has resulted in in-depth experience in operational assessments, central business operations, developing policies & procedures, implementing various clinical systems and coding & compliance. Chris Edmonson Vice President Client Reporting McKesson Chris has more than 18 years of experience in the analysis and reporting of financial information for Emergency Medicine physicians. Specialties include financial projections, cash flow forecasting, A/R valuation, impact modeling and contract analysis. Chris is heavily involved with operational process design, managerial and production reporting, IT system design and implementation, and Client Services. Jay Anders, M.D. Chief Medical Officer McKesson Dr. Anders is involved in supporting the development of the clinical information systems for the organization, including InteGreat EHR. Dr. Anders leads the EHR Physician Advisory Committee in representing the needs and requirements of the physician community and serves as an advocate in promoting the use of information technology in the clinical setting. Prior to joining McKesson, Dr. Anders was a member of the Christie Clinic in Champaign, IL, for 17 years and held the positions of President and Medical Director, as well as Department Chair of Internal Medicine. 2 2

4 ICD-10 Transition Adds More Complexity ICD-10 implementation will increase ICD codes by over 600% Increased complexity Increased specificity Codes more complex *Centers for Medicare and Medicaid,ICD-10 CM and ICD-10 PCS Today: 24K Today: 24K October 2014: 155K 3 3

5 Looking Beyond Technology

6 ICD-10 Work Flow Impact Coders - Inability to code due to poor documentation Physicians - Inadequate documentation Registration/Check-Out - Incorrect charges Billing Office - Increased time to bill due to lower coding productivity and higher denial rates Payers - Lack of payer readiness slows down cash flow 6 6

7 High Impact Specialties While ICD-10-CM will have an impact on virtually all specialties, the highest impact may be for these specialties. OB/GYN, Primary Care Emergency Medicine Cardiology, Orthopedics, Vascular, Respiratory Multi-specialty 7 7

8 Financial Impact

9 Revenues at Risk Select the top reason you expect to see a decrease in your revenue. 60% expect shortterm cash flow to be negatively impacted both in terms of project resources and lost revenue. Source: ICD-10 Puts Revenue at Risk, Intelligence Report, Health Leaders, July

10 Revenue Loss Expected 46% anticipate revenue losses from the ICD- 10 transition. How much revenue does your facility anticipate losing? Source: ICD-10 Puts Revenue at Risk, Intelligence Report, Health Leaders, July

11 Potential impact Definite Impact Specific Risk Areas for Revenues Technology Coding Claims Processing Finance & Admin Provider Networks Software Upgrades Additional Costs in Most Cases Provider Services Technical Component Claims Submission Claims History Claim Pricing Claim Adjudication Fraud Detection Risk Adjustment Financial reporting Accounting Provider Contracts Network Management Provider Pricing Credentialing Unbudgeted expenses Increased maintenance for regular coding updates Mapping of codes pre and post go live Continued ICD-9 coding for select services that do not apply such as workers comp Increased risk for rejected claims Double Billing Split Payments Incorrect Pricing Rejected Claims Increased Service Calls Business Analytics Org. Capital Budget Certifications Provider Pricing Provider Payments Fees Schedules Ancillary Pricing 12 12

12 Financial Impact of Staff Training and Coder Productivity 13 13

13 Financial Impact of Staff Training Not Limited to Coding Professionals! Training needs to cover anyone who encounters or utilizes diagnostic codes throughout the revenue cycle Training costs will vary by position, type of organization, size of organization and depth of training Those costs do NOT include overtime and lost productivity Variety of training plans and resources available online 14 14

14 Productivity Impact +69% On average, coding in ICD-10- CM/PCS took minutes longer than coding in ICD-9, about a 69% increase Property of McKesson. 15

15 Productivity Impact Loss of productivity can lead to decrease in cash flow. 60% expect short-term cash flow to be negatively impacted * 16 Property of McKesson

16 Financial Impact of Coder Productivity How ICD-10 Impacts Coders Increase in volume of codes makes code choice slower No longer able to assign codes from memory Requirement to dual code both ICD-10 and ICD-9 codes for six to twelve months Canadian ICD-10 Implementation Experience Results 15% to 20% reduction in productivity still felt one year after implementation Estimated 3% to 5% permanent loss in productivity Did not take into account increase in denials, productivity holding up cash flow, payments held up 18 18

17 Financial Impact of Coder Productivity How do we measure? Create an Estimation Model based on historical data Estimation Model Components Monthly/Annual "Volume" how you measure practice output and coder productivity (patient visits, procedures, etc.) Monthly/Annual Net Collections Current Number of Coders Coder Learning Curve Cash Relief/Cash Ramp Schedule Model Assumptions Provider documentation will be adequate for code selection Coders will successfully complete training programs and achieve certification Coders will eventually regain any productivity losses 19 19

18 Financial Impact of Coder Productivity Putting the Model Together: Six Steps to Calculate Impact Step 1: Organize Pre-ICD-10 Metrics Our example will be a practice treating 60,000 patients per year with annual net collections of $6 million The practice employs 2 full-time coders Practice Statistics Before ICD-10 Monthly Volume 5,000 Number of Coders 2 Volume per Coder per Month 2,500 Monthly Net Collections $500,000 Net Collection per Volume $

19 Pre-ICD10 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 + Financial Impact of Coder Productivity Putting the Model Together: Six Steps to Calculate Impact Step 2: Estimate the Coder Learning Curve Impact on Month 1 will be 30% - 60% reduction in productivity based on Canadian experience; studies vary Impact will vary by specialty Very little data to estimate length of learning curve this model will assume 6 months to regain pre-icd-10 productivity levels Productivity Output Period Impact Level Pre-ICD10 0% 100% Month 1-60% 40% Month 2-35% 65% Impact Month 3-15% 85% Period Month 4-10% 90% Month 5-5% 95% Month 6-2% 98% Month 7 + 0% 100% 100% 75% 50% 25% 0% Coder Output Level 21 21

20 Financial Impact of Coder Productivity Putting the Model Together: Six Steps to Calculate Impact Step 3: Quantify the Backlog Apply Learning Curve to Practice Metrics Production Requirements = Monthly Practice Volume; assumed constant Actual Production = Normal Production X Output Level Backlog = Production Requirement Actual Production Cumulative Backlog shows what happens with no overtime or additional resources Productivity Output Production Actual Monthly Cumulative Period Impact Level Requirements Production Backlog Backlog Pre-ICD10 0% 100% 5,000 5, Month 1-60% 40% 5,000 2,000 3,000 3,000 Month 2-35% 65% 5,000 3,250 1,750 4,750 Month 3-15% 85% 5,000 4, ,500 Month 4-10% 90% 5,000 4, ,000 Month 5-5% 95% 5,000 4, ,250 Month 6-2% 98% 5,000 4, ,350 Month 7 + 0% 100% 5,000 5, ,

21 Financial Impact of Coder Productivity Putting the Model Together: Six Steps to Calculate Impact Step 4: Place Value on Backlog Value of Backlog = Average Value per Unit X Cumulative Backlog Backlog represents unbilled services and delayed cash Backlog becomes lost cash without additional resources or overtime With this learning curve, the 6-month backlog is equivalent to 39 days of cash collections Productivity Output Production Actual Monthly Cumulative Backlog Period Impact Level Requirements Production Backlog Backlog Value Pre-ICD10 0% 100% 5,000 5, Month 1-60% 40% 5,000 2,000 3,000 3,000 $300,000 Month 2-35% 65% 5,000 3,250 1,750 4,750 $475,000 Month 3-15% 85% 5,000 4, ,500 $550,000 Month 4-10% 90% 5,000 4, ,000 $600,000 Month 5-5% 95% 5,000 4, ,250 $625,000 Month 6-2% 98% 5,000 4, ,350 $635,000 Month 7 + 0% 100% 5,000 5, ,350 $635,

22 Financial Impact of Coder Productivity Putting the Model Together: Six Steps to Calculate Impact Step 5: Establish Cash Relief Schedule Cash flow impact of decreased productivity isn t immediate still receiving cash from prior months Cash relief schedules vary by specialty, payer class mixture, participation levels This model assumes 100% of cash value is received over a 5 month period from initial billing Cash Flow from One Cash Relief Schedule Month of Volume Period Monthly Cumulative Monthly Cumulative Billing Month 10% 10% $50,000 $50,000 Month 2 30% 40% $150,000 $200,000 Month 3 35% 75% $175,000 $375,000 Month 4 15% 90% $75,000 $450,000 Month 5 10% 100% $50,000 $500,

23 Financial Impact of Coder Productivity Putting the Model Together: Six Steps to Calculate Impact Step 6: Forecast Cash Flow Impact Apply Cash Ramp to Backlog This model uses implementation date of Oct-2014 Cash before Oct-2014 is steady-state $500k Productivity impact peaks at 33% reduction in cash 3 months after implementation with this learning curve and cash relief schedule Cash returns to steady-state of $500k after Jul-2015, but backlog isn t recovered without additional production. Cash loss is 12.7% over a 10-month period Cash Flow Total Cash Cash Shortage Source of Cash Flow (Billing Month) Month Flow Amount % Loss < Oct-2014 Oct-2014 Nov-2014 Dec-2014 Jan-2015 Feb-2015 Mar-2015 > Mar-2015 Pre ICD-10 $500, % $500,000 Oct-2014 $470,000 $30, % $450,000 $20,000 Nov-2014 $392,500 $107, % $300,000 $60,000 $32,500 Dec-2014 $335,000 $165, % $125,000 $70,000 $97,500 $42,500 Jan-2015 $366,250 $133, % $50,000 $30,000 $113,750 $127,500 $45,000 Feb-2015 $400,000 $100, % -- $20,000 $48,750 $148,750 $135,000 $47,500 Mar-2015 $445,250 $54, % $32,500 $63,750 $157,500 $142,500 $49,000 Apr-2015 $473,250 $26, % $42,500 $67,500 $166,250 $147,000 $50,000 May-2015 $487,750 $12, % $45,000 $71,250 $171,500 $200,000 Jun-2015 $496,000 $4, % $47,500 $73,500 $375,000 Jul-2015 $499,000 $1, % $49,000 $450,000 Post ICD-10 $500, % $500,

24 Financial Impact of Coder Productivity Estimating Additional Resource Requirements Data Elements from the model can be used to estimate resource needs Backlog divided by Volume per Coder = Coder Shortage Coder shortage can be translated into S&W costs through valuing overtime, additional employees or contracted services Monthly Coder Period Backlog Equivalent Month 1 3, Month 2 1, Month Month Month Month

25 Physician Engagement

26 ICD-10 Best Practices with Dr. Jay Anders ICD-10 is going to help us provide a level of care to our patients that we have never had before ICD-10 will benefit physicians Grow compensation and reimbursement Determine severity and prove medical necessity Ensure your strong reputation Reduce the hassle of audits Denials may decrease over time due to level of detail in documentation Gain access to better clinical information Body part (i.e. bone in the hand) Stage of disease (i.e. severity of pressure ulcer) Injury (i.e. hit by baseball) Episode of care (i.e. initial visit or follow-up) ICD-10 will take your entire team Understand each hospital or medical practice is unique Use practice management partners to mitigate productivity losses Break training down into small, manageable chunks Establish a working relationship with coders There will be no more delays so the time to prepare is now. 29

27 ICD-10 Best Practices with Dr. Jay Anders Collaboration Training Documentation Your role as a physician 30

28 ICD-10 Best Practices with Dr. Jay Anders Documentation and Compliance Key Concerns 88% Concerned about changes to clinical documentation Clinical Documentation Physicians need to understand clinical documentation requirements in order for the most appropriate codes to be selected $ 3X Estimated increase in regulatory and commercial audits related to ICD-10 Compliance Increased payer scrutiny due to the ICD-10 change over is on the radar of many payers. For example, potential duplicate billings and/or payments for services dates pre and post October 1, Source: June 2013 study by the Medical Group Management Association; KLAS 2012 ICD-10 Report Property of McKesson. 31

29 Life of a Claim: Documentation deficiency can affect all stages 32

30 Steps for Documentation Deficiency Analysis Data Processing Review historical notes and codes for ICD-10 Compare specific language in note with documentation Determine gaps by physician Review with physician and provide training Data Analysis Determine patterns by physician Isolate highest impact deficiencies (frequency/value) Provide examples of deficient documentation Reporting & Training Generate feedback reports Work with physicians one on one or in focus groups Analyze and repeat training as necessary Utilize existing coding management to conduct the training Physician and coders should maintain two-way communications 33

31 Planning Ahead

32 ICD-9-CM to ICD-10-CM: The Impact on Billing Lessen the potential for a negative impact on billing, which can affect every area of your facility including patient care. Identify your current systems Contact your payers Assess your facility Conduct implementation and readiness testing Test and report documentation and billing for accuracy 36 36

33 ICD-10-CM: The Impact on Central Business Office Lessen the potential for a negative impact on your business office, which can affect revenues. Review compliance strategies Review any A/R charge editing software Conduct training for staff that will process charges Make any necessary clearinghouse edits Test 5010 software Identify who is responsible for denials management/look at past trends Claims validation and processing Review all superbill s and charge tickets for accuracy 37 37

34 Example FP ICD-9-CM Superbill 38 38

35 Example FP ICD-10-CM Superbill 39 39

36 Everyone is Impacted by ICD

37 Positioning Your Organization for ICD-10 Success Identify Training Needs Select staff that need training Decide who will conduct training Replace staff roles while in training Assess System Needs Can your current EHR software handle ICD-10 codes? Work with IT to get all systems ready Define Financial Impact Create a budget specifically for ICD-10 Calculate impact of transition: staffing, training, technology ICD-10 Will Affect Everyone. Work Together to Achieve Success.! Gain Physician Engagement Documentation is key! Use Online Resources and/or Third Party Partners to Help Prepare 41 41

38 Questions? Web: mckessoncanhelp.com

39 To Complete the Program Evaluation The URL below will take you to HFMA on-line evaluation form. You will need to enter your member I.D. # (can be found in your confirmation when you registered) Enter this Meeting Code: 13AT51 URL: Your comments are very important and enables us to bring you the highest quality programs! 43 43