ICD-10 is finally here! After more than a decade of discussion, delays, and planning, the ICD-10 implementation deadline has officially arrived. Physician practices will now see whether their ICD-10 preparations are adequate, in need of some fine-tuning, or require a complete overhaul.
Even the most thoroughly prepared organizations are likely to experience some steep hills and deep valleys during the early days of ICD-10 usage. In fact, CMS predicts that claim error rates will be more than two times higher with ICD-10, reaching a high of 6 percent to 10 percent in comparison to the 3 percent average using ICD-9 codes. CMS is also predicting that denial rates will rise by 100 percent to 200 percent and days in accounts receivable (A/R) will grow by 20 percent to 40 percent.
To thrive in the ICD-10 environment, physician practices need greater transparency into their revenue cycle. One way organizations can achieve higher levels of transparency is through the use of comparative analytics, which organize and analyze revenue cycle data, create benchmarks, and define actionable insights. For example, using comparative analytics, a physician practice can identify the root cause of revenue cycle issues, correct the issues, and minimize or avoid their impact entirely.
Comparative analytics can provide practices with a comprehensive view into their data and organize the data to guide them as they create benchmarks, assess business impact, and identify trends related to ICD-10 implementation in the following areas:
• Claim denial rates
• Denial reasons
• Deviations in coding and claim types
• Staff productivity
• Payer performance
Leveraging internal and external data on a state and national level provides a baseline for organizations to better understand where they stand compared to the industry and their peers. This additional layer of data helps inform physician practices of actions they need to take and also helps them prioritize their initiatives based on achieving the greatest return on investment.
A big concern with the switch to ICD-10 is a practice's ability to achieve revenue neutrality. In essence, will practices generate roughly the same reimbursement with ICD-10 as they did with ICD-9? Benchmarking capabilities within comparative analytics software can provide insights to answer questions like this.
Benchmarking enables practices to analyze historical ICD-9 claim payments and compare them to equivalent claims that utilize ICD-10. Findings from the analysis can help identify business issues. For example, do coding processes need modification? To further assess the impact of ICD-10, practices have the ability to identify their current high-dollar or high-volume diagnoses and answer the following questions:
• Have our high-dollar or high-volume diagnoses changed with ICD-10?
• Is revenue and/or diagnoses changes related to ICD-10 coding or changes in patient case mix?
There is also value in benchmarking the before and after impact of ICD-10 implementation, across multiple areas of the business, such as:
• Billing staff productivity. Are new processes or staffing changes impeding productivity?
• Claims denial rates. Are your denials the result of payer errors, billing staff errors, or medical necessity edits?
• Payment turnaround times. Are payers experiencing payment backlogs?
• Reimbursement. Is your organization receiving the full amount of reimbursement that it is entitled to?
And most importantly, are your peers experiencing similar results? If not, how do you explain the differences and where do you need to prioritize your focus?
A visit to the amusement park can be fun, but most businesses don't want their revenue cycle to experience the ups and downs of a roller coaster. Comparative analytics can provide the transparency — or insights — that allow physician practices to see what is ahead and what is behind them.
Stacie Bon is senior director of marketing at RemitDATA. She may be contacted at [email protected].
This article originally appeared in the October 2015 issue of Physicians Practice