Revenue Cycle Efficiencies and ICD-10

November 14, 2013
Rachel V. Rose, JD, MBA
Rachel V. Rose, JD, MBA

Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.

Coding compliance tips for physicians' ICD-10 transition.

According to a Bank of America Merrill Lynch Executive Insight Report, Opportunities From Financial Efficiencies, produced in collaboration with HealthLeaders Media, financial leaders indicated that the "revenue cycle is where they could find the most efficiencies. The revenue cycle has been a focus of the industry for years, but the need for improvement is increasing given the payment model shifts that will come as a result of healthcare reform." (p. 2).

Given the upcoming October 1, 2014, transition to ICD-10, the revenue cycle is being scrutinized more closely than ever in preparation for the greatest impact on healthcare billing since the transition to prospective-payment, diagnosis-related groups (DRGs) in the early 1980s. Currently, physicians and other healthcare providers are considering how to contend with the decrease in claim-submission productivity due to the increased specificity, as well as potential denials and the effect on the revenue cycle.

Given the multiple aspects of ICD-10 transition, which could be focused on, I am going to provide some suggestions in the area of coding and compliance, which I have addressed directly with providers. First, like HIPAA, all entities are required to meet the ICD-10 requirements, regardless of their size. In light of this, coding and compliance policies and procedures should be established based upon state, federal and regulatory agency guidelines. Moreover, private payers may be implementing similar standards, especially those involved with Medicare Part C claims submissions.

For these private payers, state prompt-pay laws may be in effect that will enable providers to collect for untimely billing practices by private payers. Second, educating everyone throughout the revenue cycle proactively will enable efficiencies to be captured now and reduce the cash gap during the October 2014 transition. Third, regular compliance audits, including medical necessity, are critical to reducing adverse outcomes from RAC and ZPIC audits, as well as diverting the billing departments' efforts from clean claims submissions to reactively dealing with legal processes. Finally, the caliber of coders is crucial. It is inadvisable for providers to skimp on coder certification, training, and input. Outsourcing is also an option, but make sure that the appropriate HIPAA and Health Information Technology for Economic and Clinical Health, or HITECH, Act business associate requirements are in place.

In sum, "revenue cycle issues … caused the most anxiety among [the BAML] survey respondents, with 25 percent saying they felt 'very' exposed to potential losses." (Ibid. at p. 5). By being proactive and implementing effective compliance programs, healthcare providers can reduce their anxiety and potentially mitigate significant losses on the revenue cycle.