WILLMAR, MN (March 2014) – Jackie Hinderks, Revenue Cycle Director, and Jessica Vagle, Adult Health Services and Care Management Director at Rice Memorial Hospital were recently asked to present an article they co-wrote at the national conference of the Health Information Management Systems Society (HIMSS).
The article, titled “Preparing for the True Risks of ICD-10,” was published in HFM Magazine, a publication of the Healthcare Financial Management Association. It takes a look at how new coding changes required by the Center for Medicare and Medicaid Services (CMS) could pose financial risks for hospitals. While the new ICD-10 coding changes don’t take effect until October 1, 2014, Rice Memorial Hospital has taken a pro-active approach and led the way in identifying potential problems and financial risks.
ICD-10 stands for “International Classification of Diseases.” It is a list of codes developed by the World Health Organization (WHO) that classifies medical conditions and procedures. CMS then uses these codes to process claims and reimburse healthcare organizations for patient services. If a diagnosis or procedure is not coded properly, or if it is not coded at all, hospitals cannot collect the appropriate reimbursement from CMS.
Currently, hospitals around the country are using the ICD-9 code sets, which provide limited data about medical condition and procedures, and are 30 years out of date for current practice. As a comparison, ICD-9 includes codes for 14,000 diagnoses, and 4,000 procedures. With ICD-10, the number of codes increases to 68,000 for diagnoses, and 72,000 for procedures. That’s a 20% and 55% increase respectively.
“Hospitals that are unprepared for this switchover will face numerous financial risks,” said Hinderks. Most concerning among them, she explains, is a loss in productivity from coders who are overwhelmed and unfamiliar with the voluminous changes. Some health information management leaders have projected as much as a 20 to 40 percent decrease in coder productivity, which could lead to delayed cash flow and lost revenue.
However, coders won’t be the only ones under the gun, explains Vagle. “Physicians also need to be trained so they can document their patient’s chart accurately,” she said. “Missing documentation means extra phone calls, interruptions for the provider, and lost productivity for everyone.”
To prepare for the transition to ICD-10, Rice assembled a project team to review 250 clinical documentation records to determine inefficiencies and assess true financial risk. Over the course of six weeks, the team identified shifts to diagnosis-related groups (DRGs) and problem claims with unspecified codes or insufficient documentation. Both were problem areas that could negatively impact the financial health of the hospital.
To mitigate the risks, Rice Memorial Hospital developed “Weekly Huddles” – a collaborative process that included coders, physicians, nurses, and financial staff. They also created a unique “Tools-People- Processes” approach which will help optimize financial reimbursement by ensuring the accuracy of documentation on the front end (clinicians) to better support a complete chart on the back end (coders).
“It’s a good feeling to know we’re ahead of the curve on this,” said Hinderks. “ICD-10 will definitely be a game-changer for the healthcare industry.”