Looking for more information on preparing your practice for the ICD-10 transition? Learn what to expect and how to be ready for Oct. 1 from our experts at Practice Rx, a new conference for physicians and office administrators. Join us May 2 & 3 in Newport Beach, Calif.
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Keep Your Medical Practice in the Black During the ICD-10 Transition
Don't let the ICD-10 transition hurt your practice's bottom line. Here are ways for you and your staff to survive and thrive during this major change.
You may have heard some pretty scary talk about how implementing the new ICD-10 coding system could be very expensive, possibly even bankrupting small medical practices. However, if you are smart and well-prepared, you can not only survive the transition, but benefit from fairer reimbursement in the long run.
"Fears of bankruptcy might be extreme, but this transition could have a significant impact on finances," said Asia Blunt, practice management strategist at the American Academy of Family Physicians.
According to a new analysis from the AMA, the costs of implementing ICD-10 for physician practices could be significantly higher than previously estimated. New estimates range from $56,639 to $226,105 for small practices and $213,364 to $824,735 for a medium-sized practice. Beyond the cost of software upgrades, new paperwork, and staff training, the biggest potential for losses will be denied claims during the early days of the new system. CMS has estimated that claims denial rates could increase 100 percent to 200 percent in the early stages of coding with ICD-10, according to the AMA.
The way to minimize denied claims is by being sure your staff is well-trained. With proper training on the new codes, the learning curve shouldn't be too steep, but it is essential not to wait until the last minute to start getting ready. "I'm frightened when a practice tells me that they plan to start training in August," says Brenda Edwards, CPC, an AAPC ICD-10 trainer. "That's too late. You need to begin training earlier to allow time to become proficient before [the Oct. 1, 2014 deadline]."
Blunt also recommends having a claims denial process in place. When a claim is denied, and many will be at first, locating the problem - asking if it is a coder issue or a payer issue, for example - can make it easier to correct problems and prevent future denials. It's always a bad idea to not follow-through on denied claims, but that could be disastrous following the ICD-10 transition.
While denied claims might be the source of the biggest losses, they certainly aren't the only place where an unprepared practice can lose money. A savvy practice will also be prepared for hidden costs or costs they may not have thought of. Some are relatively small. For example, certified AAPC coders will be required to take an ICD-10 proficiency assessment, and there is a fee for this. Other hidden costs are larger and more difficult to quantify, such as the cost of lost productivity while employees are training.
Another unpleasant surprise can come when vendors don't have the software upgrades completed in time, or if the upgrades aren't suited to the particular needs of your practice. Edwards recommends getting in touch with both your EHR vendors and your payers to make sure that not only will they be ready on time, they will be ready in time for you to have a trial run of the new systems well ahead of the October 1, 2014 deadline. You don't want to wait until then to find out that your vendor left out the very codes you need the most.
Even with the best preparation, some things will inevitably go wrong.
"The AAFP is recommending that practices have at least a three-month cash reserve," said Blunt. "If they have the capability to have additional cash reserves, that would be better. However, if they have at least a three-month reserve, this should be sufficient time to identify any problems with payers and claims transmission and resolve them," she said.
Ideally, of course, you won't need that much extra cash. Thorough preparation is the key to sailing through this transition with your finances in good shape. Of course, truly astute practices are taking the long view. Even if they do have to cover some losses in the short term, the ICD-10 codes, with their more specific diagnoses should allow for more accurate claims resulting in more equitable reimbursement in the future.
Avery Hurtis a freelance writer based in Birmingham, Ala. Her work has appeared in publications including Newsweek, The New Physician, Muse, Parents, USA Today, and the Washington Post. E-mail her at editor@physicianspractice.com.
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