Implementation of ICD-10 will lead to significant changes in our national healthcare system in terms of patient care, clinical documentation, coding and billing, medical health records, and research. If you believe that ICD-10 won’t take much time and energy to implement in your specialty-specific practice, you will probably want to file it away for your to-do list in September 2015. Doing this, however, would be absolutely catastrophic for your overall revenue stream after the ICD-10 deadline, which is October 1, 2015. Why? If insurance claims for medical services on or after October 1, 2015 don’t have the correct ICD-10 codes, you will face heavy delays and flat-out denials.
To get some sense of how critical advance preparation for ICD-10 is, all we have to do is examine how the ICD-10 transition transpired in our neighboring Canada and learn from it. Canadian reports state that as much as 40% in cash flow disruption occurred because of inadequate clinical documentation, coding mistakes and delays associated with ICD-10.
Therefore, it will behoove you to develop a strategy to minimize interruption from ICD-10 as much as possible on and after the deadline – allowing you the opportunity to adjust and stabilize your cash flow quickly. To assist you, we wanted to give you four quick suggestions on how to considerably reduce interruption caused by ICD-10 to your medical practice.
1. Examine and tweak your clinical documentation to match the ICD-10-CM level of detail
ICD-10-CM diagnostic codes will expand from 4,000 to 68,000, and each individual code will extend from 3-5 digits to 3-7 characters. This expansion provides greater detail and specificity regarding the patient’s medical condition and morbidity. A physician’s clinical documentation has to be brought up so it is on a comparable plane with ICD-10, or else the correct ICD-10 codes will not be found and utilized to represent the patient’s health state. Discrepancies between the clinical documentation and coding will most likely result in insurance claim denials.
Studies authorized by the Centers for Medicare and Medicaid Services (CMS) predict that claim denial rates will increase from 100% to 200% after the ICD-10 deadline. These claim denials will not only lower the medical practice’s cash flow because of reimbursement delays, but also raise the organizational costs related to executing claim’s appeals. To reduce this insurance back-and-forth, physicians should get familiarized with the ICD-10-CM codes that are most relevant to their specialization and work out what they need to do in order to synchronize their documentation accordingly.
In this way, medical coders will receive all of the medical data they need to accurately code and bill for treatment, thereby greatly reducing denials brought about by incorrect or unspecified codes.
2. Focus on increasing your specialty practice’s cash reserves
Depending on the size and solvency of your medical practice, consider how you can increase your cash reserves as the ICD-10 deadline nears. Having these financial savings will facilitate the continued operation of your practice in case of an ICD-10 emergency, such as a temporary loss of revenue.
Compare your list of overhead expenditures, such as payroll, rent and utilities, supplies, and other miscellaneous items, against your monthly collections. What is your average profit margin on a monthly basis? Where can you do to consolidate or tighten spending so as to increase savings? In what areas can you ramp up your revenue? Work out a plan with your office manager to put away enough money so that your practice will have security in the first few months of official ICD-10 implementation.
Having cash reserves will carry you through a possible reduction in medical reimbursements due to potentially heavy delays and denials caused by errors related to ICD-10.
3. Concentrate on bringing down your accounts receivable
Decreasing your accounts receivable goes along the same line of increasing your cash reserves, so conduct a thorough examination of your accounts receivable. How far does it go back? Two, three, six, eight months, one year, two years, or more? Strive to reduce your accounts receivable to 30 days or less, which would be highly beneficial to your practice in the midst of an ICD-10 transition for a couple of reasons.
First, following up with patients, payers, and any other debtors will dramatically increase your revenue stream. The chance of them making complete payments decreases the longer you wait for them to pay. In other words, when a ton of time is introduced between the clinical treatment and the final payment for services rendered, collecting that reimbursement becomes much harder. Save yourself the hassle by ensuring that your medical staff stays on top of accounts receivable and handles reimbursements in a friendly but firm and quick manner.
Second, reducing your accounts receivable before the ICD-10 deadline will mean that you will not have to go back and forth between ICD-9 and ICD-10 codes for those patients and medical services, which, in itself, can present its own headaches and confusion. Minimizing your accounts receivable as much as possible will enable you to start fresh with ICD-10 codes in your medical records and billing.
4. Become knowledgeable in everything ICD-10
Like it or not, the ICD-10 codes are like a whole new language that must be learned by physicians and staff. To gain some perspective, what if we bought you an all-expenses-paid trip to Italy where you must learn Italian to make this trip a success? You probably wouldn’t wait until the last few days before your trip to start learning the new language. It works the same with ICD-10.
There are a multitude of online resources as well as traditional classes that can instruct you in the basics of ICD-10 as it pertains to your specialization. You should also have a copy of the ICD-10 code set readily available for continual reference until you feel comfortable enough to code on your own.
It is very important to stay abreast of the latest ICD-10 developments as put out by CMS and all of your practice partners in order to prevent any unwelcome surprises in your ICD-10 implementation.
For more information on how to effectively get ready for ICD-10, look up our Six Steps to Take in Preparation of ICD-10 Part I and Part II.
