Freed Associates

A Roadmap for Meeting ICD-10: Taking a Break is Not an Option

TOPIC: Accountable Care Organizations, Health Reform 2.0, Information Technology

Since the deadline for ICD-10 compliance has been delayed until October 2015, healthcare organizations may be tempted to ignore the initiative for several months. Most of our clients have gone into a slow-down period after getting their technical side compliant. According to Healthcare IT News, the annual report to Congress from the Office of the National Coordinator for Health Information Technology shows that 59 percent of hospitals and 48 percent of physicians had at least a basic EHR system. Among our clients, most of the larger institutional providers have trained their coders on the new ICD-10 code set and trained their clinicians on necessary clinical documentation improvements. Payers have their EDI and claims systems ready to accommodate ICD-10. With the technical work primarily complete, they have temporarily re-assigned ICD-10 internal resources and let go of consulting support in order to reduce overall spending on the initiative. Now is not the time to completely ignore ICD-10!

Taking a break may cost health organizations a competitive advantage.

With a code set as complex as ICD-10, there is still too much confusion on how to bill and interpret claims, especially those that span the implementation date. The potential for major disruption in the revenue cycle is great if organizations are not properly prepared. Continuous testing can outline major flaws that still exist and give organizations sufficient time to make corrections before next October. Providers who remain proactive will be less likely to experience loss in revenue. Payers will be more likely to meet their payment obligations promptly and avoid making mistakes that cost them penalties and interest.

To illustrate the kind of operational disruption our industry may face with an ICD-10 cutover, consider one of our ICD-10 end-to-end testing experiences with a provider that bills hundreds of millions of dollars a year to one of their key payers. In initial ICD-10 testing, they found they were underpaid on test claims, on average, 85 percent of what they expected. This is the kind of experience we want you avoid once ICD-10 goes live.

Timeline for ICD-10 Readiness

While most healthcare organizations will not start ICD-10 end-to-end testing again until March 2015, we’ve outlined a timeline you can follow to ensure you are as ready as you can be when next October rolls around.

Now to March 2015:

  • Communicate with your external trading partners. If you conducted external testing in 2014 with one of your bigger partners and it proved problematic, talk with them and make a plan or commitment to retest successfully in 2015. Additionally, given that payers were highly selective in choosing providers with which to engage for testing in 2014, it is important that providers receive confirmation of a 2015 testing slot with their high dollar payers.
  • Technical regression testing. Systems generally require annual or more frequent upgrades.Keep testing to make sure any ICD-10 compliant software you put into production in 2014 isn’t broken.
  • Refresher Training. Your coders need to be kept fresh. Each month, have them dual code at least 5 or 10 episodes in both ICD-9 and ICD-10. Immediately before the deadline, consider putting them through another day of ICD-10 re-training.
  • Secure your consultants. Come March, there is going to be a high demand for consultants. Contract with your consultants now, before your competitors get to them, so you can work with a team that has experience with your organization as well as with ICD-10.
  • Create schedules and resource plans. Get your plans and budgets in place for 2015. ICD-10 plans generally include numerous and complicated inter-related tasks and activities and need to be coordinated with other organizational priorities.

March through May 2015

  • Onboard your consultants.
  • Talk to all your major external trading partners. Providers need to ensure they are preparing test claims data appropriately based on lessons learned from 2014 testing. Payers want to make sure providers aren’t making obvious mistakes such as forgetting to use the ICD code set indicator (a 2-3 digit code on claims that informs payer systems if the claim is using ICD-9 or ICD-10 codes) that will affect their ability to make payments quickly and efficiently. They also need to make sure that everything surrounding each provider is set up appropriately in their claims system: the fee schedule, the benefits, the membership, the coverage and the accumulators. Maintaining an open line of communication is key while coordinating ICD-10 round-trip claims and remittance advice testing.

June through August 2015

  • Test extensively. This will be your heaviest period of testing. Payers will want to ensure that their largest claims submitters understand how to bill claims with ICD-10 codes while providers wish to confirm that their largest payers will remit according to the provider reimbursement contract.

September 2015

  • Begin activating your technical cutover plan.
  • Develop an operational metric measurement plan. Baseline your operational metrics so you have a clear starting point. Create a mechanism for alerting you when problems begin to occur. If you are a provider, an early warning system will let you know immediately if your claims are being held up or not being paid. Tag your early warning indicators such as cash, the number of days that claims are in accounts receivable, and your denial percentage.  If you are a payer, discuss your ICD-9 rejection policy and procedure with your clearinghouse, EDI and claims functions.
  • Develop a post go-live support mechanism. Consider how you will set up a command center for your organization to manage and triage issues that may come up; and assume they will come up. If the uncertainty becomes catastrophic and the entire industry is awash with issues, you’ll be in a better position to manage the problems.

Proper planning, preparation and successful test execution will give you the best chance of leveraging your significant investment in the ICD-10 compliance initiative. When we get to next October, you’ll be more confident that your technology can implement ICD-10 codes, that your personnel are trained, and that you are protected against significant cash-flow disruption.

Matthew R. Dutton is a management consultant with Freed Associates and has over 20 years of experience within the healthcare industry. He has assisted providers, payers, clearinghouses and software vendors with system implementations, business operations imperatives, strategic decision making and program/project management improvement. Learn more at