ICD-10 Data Mining

November 13, 2013

The costs associated with ICD-10 are a given. The degree to which your practice benefits from that investment is up to you. Indeed, practices that hope to maximize their return on information technology upgrades and training expenses after ICD-10 compliance will need to analyze data produced by the more granular code set to diagnose inefficiencies and identify opportunities for growth, says John Pitsikoulis, a consultant with healthcare consulting firm Nuance Communication in Burlington, Mass. "Analyzing and evaluating your practice outcomes will provide important information for sound business decisions and actions plans," he says.

The costs associated with ICD-10 are a given. The degree to which your practice benefits from that investment is up to you. Indeed, practices that hope to maximize their return on information technology upgrades and training expenses after ICD-10 compliance will need to analyze data produced by the more granular code set to diagnose inefficiencies and identify opportunities for growth, says John Pitsikoulis, a consultant with healthcare consulting firm Nuance Communication in Burlington, Mass. "Analyzing and evaluating your practice outcomes will provide important information for sound business decisions and actions plans," he says.

Healthcare data mining is nothing new, of course. Medicare and private payers have extracted information on cost and quality metrics for years to improve patient outcomes, prevent fraud, predict costs, and identify high-risk patients for disease management programs. Ten years after ICD-10 was implemented in Canada, many hospitals there have also established decision support departments to maximize their return on investment in ICD-10, according to the American Health Information Management Association (AHIMA). "The number of data analysis reports U.S. providers will soon be able to create and the volume of new insights clinicians will gain with ICD-10 are unimaginable and vast," AHIMA writes in an article entitled "ICD-10 Debunked & Confirmed." "But the full benefits of ICD-10 are only realized when providers make the most of new data mining and analytics capabilities."

Small practices have fewer resources than hospitals and payers, but they can still leverage ICD-10 to advance their business goals. For starters, says Nancy Enos, a practice management consultant with Enos Medical Coding in Warwick, R.I., providers can analyze documentation and coding for chronically ill patients and those requiring costly treatments to ensure their reimbursement reflects the level of care provided. "The more specific diagnostic codes will support higher levels of service, or justify medical necessity for care given more frequently over longer periods of time," she says, noting the onus is on practices to ensure they're being compensated fairly post implementation. Practices can also facilitate process improvement and lower costs by evaluating their coding work flow before and after the go-live date on Oct. 1, 2014, to define any gaps and eliminate redundancies.

Another worthy exercise is to identify your 10 most utilized and highest paid codes, which differ by specialty, and perform an internal audit of the supporting documentation to be sure you're not leaving money on the table or inviting denials, says Pitsikoulis. "Eighty percent of your practice's revenue comes from 20 percent of your business so you need to make sure you're documenting those claims accurately," he says.

Most practices will submit ICD-10 diagnostic codes, rather than procedure codes, but they can still team with the hospitals with which they are affiliated to review outcome data on surgical procedures that impact their patient population, says Christine Armstrong, a principal with Deloitte Consulting. "They'll be able to see now at a glance details about surgical episodes and devices used to determine which were most beneficial to their patients," she says, noting optimal outcomes lead to fewer readmissions. "Having that more detailed information about patient populations and understanding diseases can improve patient outcomes."

Hiring help

To delve any deeper into the data, practices will likely need to deploy analytical software or hire a consultant to create reports, analyze the results, and recommend an action plan. Jason Mark, director of emerging business technology for 3M Health Information Systems, says providers may be able to work with their billing and EHR vendors to build a tool that meets their needs. Some vendors already offer programs that enable practices to flag and track patients with specific diseases, such as asthma, heart disease, or diabetes. "Practices should be asking their vendors now whether they're going to provide tools that enable them to dig into the data and perform an analysis," says Mark. "If they start to see repetitive patterns they'll now have the opportunity to differentiate those patients into categories, and identify those that are taking more of their time and resources." That information, in turn, can be used to develop a plan for delivering more efficient, effective care, including better patient education and disease management programs.

While time consuming, the best practice approach to ICD-10 data mining, says Julie Malida, principal of healthcare fraud at SAS Software, is to compare and contrast the new code set with ICD-9, thus enabling providers to spot trends in care delivery and practice evidence based medicine. "You'll be able to do more trend analysis and unlock the power of what's in the data if you're able to compare both sets of data side by side," she says, and not just post-implementation, but for years to come. "Those practices with the wherewithal to compare the old with the new will be money ahead."

Medical practice consultants can also help troll for data and recommend a roadmap for process improvement. Any consultant you hire should start by establishing a baseline of where you are today and identify specific operational changes that will improve patient satisfaction, quality of care, and your bottom line, says Pitsikoulis. To keep costs under control, always get multiple bids and pay for only what you need, he says.

The migration to ICD-10 brings with it significant costs for healthcare providers. But it also creates opportunity. Practices that use the more granular code set to analyze trends, predict costs, and improve operational efficiency will be two steps ahead as payers replace fee-for-service reimbursement models with those that reward for value. "Figuring out how to optimize your performance is going to become a bigger deal than it has been in the past," says Mark. "If you're only getting X amount for this patient under a new reimbursement system, you're going to have to dig into the data to figure out how you can be more efficient."

Shelly K. Schwartz, a freelance writer in Maplewood, N.J., has covered personal finance, technology, and healthcare for more than 17 years. Her work has appeared on CNBC.com, CNNMoney.com, and Bankrate.com. She can be reached via editor@physicianspractice.com.