Your practice is likely training and testing for ICD-10 compliance, but you also need to know how to mitigate losses from denials. Here's how to get started.
If you don't have a strategy in place for managing claims denials following the implementation of ICD-10, there's no time like the present. Virtually everyone engaged in healthcare reimbursement predicts an initial uptick in the number of delayed or rejected claims after the go-live date Oct. 1, 2014, due partly to coding errors and partly to greater scrutiny of claims by Medicare and commercial payers.
While practices should already be training and testing to ensure ICD-10 compliance, they must also ready their defenses to mitigate losses when the denials start rolling in, said Jacqueline Stack, director of ICD-10 training and development for the American Academy of Professional Coders. "We definitely are going to see an increase in rejected claims so practices need to make sure they have a plan in place to deal with that," she said. "You may have one or two people working rejected claims now and that's OK, but you may need three or four when more claims start getting denied."
And not just any set of hands will do. Indeed, the Healthcare Financial Management Association (HFMA) notes that claims denials post ICD-10 will likely require an added level of expertise. "Claims denials will not strictly be a matter of clarification that can be handled by a nonclinical person in the billing office," HFMA said in its 2013 report entitled "Readying Your Denials Management Strategy for ICD-10." Denials will raise questions about medical necessity or the clarity of medical documentation supporting a code, it said, and such questions will require input from physicians and nurse specialists or outside expertise. "Physicians themselves must be ready to add clinical perspective and input when denials occur," the report notes.
Put someone in charge
Practices that hope to maintain revenue cycle integrity should start by designating a point person to track and trend denials; someone accountable for contacting the insurance plans, making necessary corrections, and resubmitting claims, said Stack. Hiring a new staff member for the job, however, can be cost prohibitive. It's also increasingly difficult to find coders who are trained in ICD-10 since many older, experienced coders have opted to retire rather than learn the new system. As such, it may be easier to groom from within, said Stack. Select a staff member who is detail oriented and up to the task. Training should begin as soon as possible. "Whoever you [select] has to have an understanding of how billing and coding works," said Stack. "Someone with a clinical background may need less training than someone from your clerical side, since they understand anatomy and disease processes and would understand what documentation applies to what codes."
To do their job effectively, the claims-denials team leader will no doubt need to pass along some of their existing responsibilities - at least for the first few months following the go-live date. But consider the workload of your staff before dumping additional tasks on them. Burnout leads to turnover, which may cost your practice more than simply hiring a part-time employee to pinch hit, said Stack.
Rachel Mitchell, director of client services for Applied Medical Systems, a medical practice-management firm in Durham, N.C., notes your point person should keep track of deadlines for submitting claims and filing appeals. They differ for every payer. "You need a key person to track those dates and submit or resubmit claims with the shortest filing limits first," she said. Likewise, they should flag any claim that has not been paid as the filing deadline draws near. "If you only have 90 days to file a claim and the payer is sitting on it, you need to keep track of that," said Mitchell. "If there's something wrong with the claim or they never received it, you're suddenly past the 90-day point." Filing limits will be more important than ever, she notes, since the added specificity of ICD-10 codes means both practices and payers will likely experience a processing backlog.
High-dollar and high-volume claims, which account for the bulk of your practice's revenue, should be closely monitored as well, and dual coded with both ICD-9 and ICD-10 data sets, ahead of Oct. 1, 2014, to ensure coding accuracy right out of the gate. "It will be up to the coders, who should be currently training and attending continuing education courses on ICD-10, to ensure the coding is correct before the claims are sent to the clearinghouse," said Mitchell. "This will increase knowledge, accuracy, and readiness."
Stack adds that any time a claim is denied, your staff should review the explanation of benefits to determine where the problem lies. "If something is denied, they need to stop to look at it," said Stack. "Maybe it was denied because someone transposed a number on the insurance card, which is an easy fix and a resubmit. But if it's because an unspecified code was used and the payer is looking for more specific documentation, you need to determine whether the documentation provided would support a more specific code or if the documentation is lacking." That requires a conversation with the physician.
Talk to payers
Lastly, your claims staff should reach out to the health plans with which your office contracts so they understand what happens after ICD-10 takes effect, said Lisa Gallagher, vice president of technology solutions for the Healthcare Information and Management Systems Society. "It may be that each plan will handle claims that have problems a little differently," she said, noting some may deny such claims outright, while others will be more lenient and send them back with a request for recoding. "If you connect early enough, it will help inform the process." A proactive approach to mitigating revenue loss is best, she adds, but after ICD-10 it's every practice for itself. "After ICD-10, it's a question of how your practice is going to remediate that problem so you get paid," she said. "What is your course of action if the health plan denies your claim or sends it back for recoding?"
Use your tools
Revenue cycle metrics, including aging reports, which track both the amount and age of outstanding balances by payer, should be monitored weekly, post-ICD-10, and measured against a baseline to spot any trends that may impact your practice financially. Most practice-management systems can run such reports, said Mitchell, but medical groups that file claims electronically should also contact their clearinghouse, which may be able to provide trending data on denials and underpayments, as well. "They can run a report, for example, that says over the last six months how many claims were denied for coding and how many were denied for eligibility issues," she said.
The claims denials system your practice uses today may no longer be sufficient post- ICD-10. Practices must appoint a team leader, hire help as needed, and provide adequate training to ensure they continue to get paid for the work they do. "It's almost like the Y2K scare," said Mitchell. "No one really knows what the impact is going to be. The key is to be prepared."