How ready is your practice for the financial impact of implementing the ICD-10 code set? With the Oct. 1 implementation date a little more than five months away, practices are preparing to make the switch—but they also should be ready for what will happen following the deadline, experts say.
Betty Gomez, an independent consultant on regulatory strategy, said practices should know exactly what it will take to “keep the lights on.” Gomez spoke at a session last week at the 2015 annual meeting of the Healthcare Information and Management Systems Society in Chicago.
“The smaller [your practice is], the more important this is,” she said.
Gomez said practices should have three to six months’ worth of cash on hand before the first day of October rolls around in case of payment bottlenecks. The money should be kept in a way that can be accessed any time, or quickly liquidated, if there are payment delays.
“You need to have enough of a cushion so that other organizational problems—outside of yours—don’t impact you,” she said.
Here are four things Gomez said practices should do to prepare financially for ICD-10 and decrease their chances of having claims issues later:
- Take note of key financial metrics, such as payer analyses and cash flow data.
- Place high priority on the quality and completeness of documentation.
- Track data on coders’ productivity for a period before ICD-10 implementation so you can compare post-implementation productivity.
- Make sure your practice is as prepared as possible to make the switch.
Industry expects payment disruptions
Even the Centers for Medicare & Medicaid Services (CMS) recognizes that the ICD‐10 transition will have an impact on physician payment processes. The agency estimates that “in the early stages of implementation, denial rates will rise by 100-200 percent,” according to a 2013 report from the Healthcare Financial Management Association.
A 2014 AMA study conducted by Nachisom Advisors on the cost of implementing ICD-10 estimated that a small practice could see payment disruptions ranging from $22,579 to $100,349 during the first year of ICD-10 implementation. The study also estimates that a small practice could incur a 5 percent drop in revenue because of productivity loss during and after the change.
The AMA is urging regulators to ease the burden of ICD-10 implementation on physicians, but you should make sure your practice is prepared.
An ICD-10 data file available on CD-ROM or via immediate download is an essential resource. Additional information and resources to help physicians get ready for ICD-10 are available on the AMA ICD-10 Web page.
Check out the first post in a series that offers timely transition tips and resources as the implementation deadline approaches.
