Seven Reasons to Be Very Nervous About Your Cash Flow

October 4, 2011

I believe that many are overlooking some very important issues about ICD-10.

Much of the conversation in the very recent past on the transition from ICD-9 to ICD-10 has focused on going from about 16,000 diagnostic codes to approximately 140,000 when you add the 68,000 codes for outpatient diagnoses and 71,000 for inpatient diagnoses. Everyone is very worked up about education needed to have the coding done properly by the coders. The government is making everyone be 5010-compliant with our computer software and submissions to the different clearinghouses and insurance companies by the end of this year, in order to accommodate the differences between ICD-9 and ICD-10.

While I do not argue that a lot of education is going to be needed for the coders and a lot of software needs to be made capable of 5010, I believe that many are overlooking some very important issues about ICD-10.

The first big issue I see is that some insurance companies (for example worker’s compensation carriers, MVA insurance carriers, some of the smaller TPAs, etc.) are not going to be capable of ICD-10. I know that some worker’s comp carriers don’t care if they are ever ICD-10 compliant and we have all had issues getting MVA insurance carriers to acknowledge the most current edition of ICD-9 Diagnosis codes.

What does this all mean? Following are some different issues I see:

1. Your system is going to have to be able to assign either ICD-9 or ICD-10 codes as appropriate to the carrier, or you’ll need to run two different systems. This means you will be paying much more to keep your IT current and useful.

2. You are going to have to know who is capable of what coding system. When you make a mistake and send a claim to the wrong place with the wrong information, you have to change the whole claim manually and resend it.

3. When a claim transfers from Medicare to secondary insurance that is not capable of ICD-10, you won’t get paid. You are going to have to resubmit the claim with different diagnosis information. Questions of possible fraud will arise, I foresee, as the claim will be different from what was submitted to Medicare.

4. You’ll have to have a contingency plan for getting claims processed correctly; all the while being aware that many insurance companies and medical entities are using “drop to paper” as their contingency plan. This is a huge step backwards in the claims processing world. All the savings we have seen as a result of HIPAA implementation (that we paid quite a bit to accomplish) will disappear as you will need more people, paper, IT and postage.

5. Will your clearinghouses be able to accept both ICD-9 and ICD-10 at the same time for at least six months of time to handle the transition? If not, do you have a contingency plan?

6. Have you tested your system and your clearinghouse(s) system for 5010? If you have not passed with both by November 1, 2011, you have a lot of scrambling to do. If you are not 5010 compliant by December 31, 2011, you will not be able to submit claims and get paid.

7. There is a strong possibility that you will need to have a line of credit to keep your office going financially while all the pitfalls are found and ironed out. I suggest you get that line set up prior to October 1, 2013.

As we have less than two years to have the process working effectively enough so that all medical providers are not penalized for the latest “idea” of good healthcare; I suggest you make sure you’re ready to handle these issues, whether you outsource the problems or not.

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