John K. Dugan

Healthcare organizations should take a strategic approach to the ICD-10 conversion, viewing the process as more than regulatory compliance.


At a Glance   

  • Healthcare finance teams should perform an enterprisewide assessment to determine what ICD-10 means to their organization, strategically, operationally, and financially.
  • CFOs should strategically evaluate the impact of ICD-10 on the organization's entire financial operation.  
  • Organizations should have a contingency plan in place across all processes.  

One of the pain points of ICD-10 conversion is the cost of the undertaking and a thorough assessment. Although the regulatory mandate requires all providers to convert to ICD-10, healthcare organizations have choices in how to get there, and the approach can make all the difference. The expansive data set within ICD-10 will provide granular insight into how care is delivered on a patient-specific basis. The structure, flow, and interoperability of these data should be incorporated into the organization's information strategy. Such visioning is crucial in navigating future value-based purchasing and developing an accountable care organization. Although implementing strategic objectives is costlier than achieving minimal compliance, the significant ROI of information management has been proven in many industries, such as banking, transportation, and retail.

Clearly, healthcare providers with a long-term view are looking beyond compliance. They see the conversion to ICD-10 as an investment in improving both revenues and care delivery in the post-reform environment. They view ICD-10 adoption as a systemwide business process transformation touching every person, process, and system throughout the organization. From this perspective, the ICD-10 dataset can be captured and organized in a way that can fundamentally change patient care initiatives. As providers develop an ICD-10 impact assessment and remediation plan, they should be asking what their return will be for the effort, not what it will cost. They should view the process from a broader perspective than purely that of regulatory compliance.

Early adopters, such as the Geisinger Health System headquartered in Danville, Pa., are on track on the ICD-10 implementation timeline, offering lessons that are discussed in this article to those who are just beginning and are anxiously eyeing the compliance deadline. These organizations still have time to implement ICD-10 in a careful, comprehensive, and strategic way by applying the lessons learned to their own organizations.

ICD-10: Not a Checklist Approach

As carpenters are fond of saying, "It's better to measure twice and cut once." Hospitals implementing ICD-10 without a vision toward future-state operations invariably will face do-overs and redundancies that waste both time and money. As a first step, the healthcare finance team should perform an enterprisewide assessment to determine what ICD-10 means to their organization, strategically, operationally, and financially. The process should identify where the gaps in people, process, and technology create the greatest risk for strategic imperatives.

The CFO has an important role to play in the process. In many organizations, the CFO serves as the executive sponsor for the ICD-10 initiative or as a member of an ICD-10 executive steering committee. In this capacity, the CFO, working closely with peers, is charged not only with establishing a budget and financing for a significant initiative, but also with strategically evaluating the impact of ICD-10 on the entire financial operation. Whether it is contracting, decision support, coding, or patient accounting, each of these areas-typically the CFO's responsibility-will have significant impacts.

Additionally, some of the key managers who report up through the CFO will have a significant ICD-10 time commitment over the next few years that should be appropriately considered, because there are many competing priorities. Financial managers responsible for the areas mentioned above will be leading large work groups that will be responsible for assessing ICD-10's impact on their respective operations. Ultimately, they will be leading efforts on significant remediation activities, which will include IT upgrades, process remediation, and training.

Case Study: Geisinger Health System

Hospitals contemplating an ICD-10 conversion can take a lesson from Geisinger, where the revenue cycle department is orchestrating the effort. Geisinger's leaders say providers that have not yet started their ICD-10 migration have a mountain to climb-but climbing it is not impossible.

Geisinger is widely recognized as an innovative health system with outstanding quality in addition to being one of the country's earliest and most sophisticated adopters of the enterprise electronic health record (EHR), health information exchange, and analytics. Geisinger is often cited for its effective use of advanced health IT for patient care, research, and secondary uses of health data. President Obama, for instance, referred to Geisinger as a model of reform in his address on health care to a joint session of Congress on Sept. 9, 2009. Geisinger is enhancing its early-adopter reputation with ICD-10, which it began implementing three years ago.

Beginning in 2009, Geisinger built awareness for the scope of ICD-10 while keeping tabs on the regulation's development. It estimated that implementation was going to be a large undertaking lasting several years, and extend beyond merely a technology conversion or revenue cycle change. It committed to the process early on by dedicating internal resources and engaging an external vendor to assist with project management and the structuring of a formal assessment approach. An enterprisewide impact assessment was crucial to uncover critical information needed to sequence, cost, and plan efforts to meet regulatory and strategic deadlines.

Geisinger established an ICD-10 interdisciplinary working committee with leaders who represented each functional area. These functional leads facilitated working sessions with more than 200 participants from key areas across the Geisinger community. Key clinical and operational leaders from each major service line-including coding and reimbursement directors and their staff, research managers, IT directors, clinical documentation specialists, and directors from patient access and the revenue cycle-formed this committee and the leads to support the impact assessment. The active involvement of leaders and staff from across the organization has continued through the remediation phase.

The assessment comprised three steps: application inventory, data analysis, and process analysis.

Application inventory. A vendor-application inventory identified which current and future systems used diagnostic codes and enabled management to size up the scope of remediation efforts. Assessments were designed to determine the requirement for internal resources and to identify projects better suited for outsourcing.

Geisinger learned key lessons during this step. For example, because many vendors are affected by ICD-10, Geisinger determined that an integrated plan should be developed to manage downstream impact from an IT standpoint and interdependencies from a workflow standpoint. Further, for a health IT-enabled data-rich organization such as Geisinger, the impact on reporting and analytics is significant. Needless to say, for research institutions, there are additional impacts and risks to be considered with regard to clinical trials and data integrity.

Data analysis. With this step, data were analyzed to process historical claims in a simulated ICD-10 environment in which results were summarized by service line and physician. The goal was to disclose clinical areas most affected by the transition. A focused medical records assessment also was completed to evaluate current gaps in clinical documentation that require additional physician training. This diligence proved extremely helpful in documenting menu prompts and expanded diagnosis and procedure capture screens within the EHR systems. By seeking the input of physicians and clinicians along the way, Geisinger was able to smooth the transition substantially.

Process analysis. In this step, the conversion team examined all business processes that would be affected by ICD-10. Key areas include patient care delivery and the entire revenue cycle, as seen in the exhibit below. By performing the "Follow the Code" evaluation across the Geisinger enterprise, the organization was able to build greater awareness while documenting the critical processes affected by ICD-10.

Exhibit 1

f_dugan_exh1

Findings and Next Steps

The analysis produced three key findings:

  • Thousands of staff across the Geisinger community would need extensive training and education to transition effectively to ICD-10 from both a workflow and technology standpoint.
  • For each functional area that might require additional resources to manage multiple vendors and execute ICD-10 remediation initiatives, Geisinger would need to design remediation plans, such as medical necessity workflows and plans for addressing the impact of computer-assisted coding on current coding operations.
  • All "in-flight" initiatives, including planned acquisitions, would need to be carefully synchronized with identified ICD-10 remediation projects to manage dependencies and risks.

Geisinger was now in a position to formulate a remediation budget, action plan, and timeline.

As Geisinger begins implementation, it is approaching its conversion to ICD-10 as a strategic, long-term opportunity, using and refining a governance structure that involves leaders from all affected areas to drive remediation activities into logical groups, as shown in the exhibit above. To learn more about Geisinger's techniques in undertaking an ICD-10 conversion, see the sidebar "Geisinger Health System's 10 Suggested Practices for ICD-10" below.

Exhibit 2

f_dugan_exh2

Contingency Planning Is Critical

Achieving key milestones in the conversion timeline has given Geisinger advance knowledge of potential trouble areas and the ability to formulate contingency planning. Implementation of 5010 was a prerequisite for transitioning to ICD-10, and Geisinger already had well-established contingency plans for payers unprepared for the conversion. A similar plan is also being developed for ICD-10. Computer-assisted coding, using natural language processing, is an anticipated enabler to help reduce the anticipated capacity issues for health information management (HIM) coding resources with ICD-10. The time and personnel needed to evaluate the various applications in this space are significant and should not be overlooked or underestimated.

Logistical issues need to be navigated, given the large number of people who need to receive varying levels of education. Options include everything from online awareness sessions to more in-depth training for medical record coders. In any case, the training across the organization should be role-based (basic, intermediate, advanced) as opposed to "one-size-fits-all."

Finally, there is the task of preparing the HIM staff to work in two different worlds during the transition. ICD-10 is as much a change in methodology as it is a change in codes. For several months after October 2013, personnel will be completing and closing out pre-2013 accounts recorded in ICD-9, even as they create new records in ICD-10. In addition, Medicaid agencies across the country are struggling to comply with 5010. Many in the hospital industry are wary that these programs will not be in compliance with ICD-10, further complicating the "dual-coding" environment.

All of these issues have the potential to affect the conversion timeline, which is why Geisinger has stressed contingency planning across all processes.

The Cost of Doing Business

As mentioned earlier, healthcare organizations should be taking a strategic view of the conversion to ICD-10, and anticipate such benefits as greater efficiency, adoption of new technology, and improved patient care. ICD-10 will eliminate unspecified coding, thereby delivering accurate and more complete information to better understand a patient's response to the provision of care. As payments become tied to quality reporting and outcomes data, those who invest the time, effort, and dollars to operate effectively under ICD-10 will be positioned for long-term strategic success. 


John K. Dugan, CPA, is a partner and the national leader, revenue performance management and ICD-10 practice, for the healthcare provider segment of health industries, PwC, Philadelphia, and a member of HFMA's Metropolitan Philadelphia Chapter (john.k.dugan@us.pwc.com).


Sidebar 1

About Geisinger Health System  

Founded in 1915, Geisinger Health System is a fully integrated health services organization headquartered in Danville, Pa. Following are key statistics:

  • Community practice sites: 37
  • Service area: 2.6 million residents in 43 counties in central and northeastern Pennsylvania
  • Full-time employees: 12,000+
  • Physicians: 1,200
  • Licensed inpatient beds: 767
  • Total revenue: $2.7 billion

Sidebar 2

Geisinger Health System's Suggested Practices for ICD-10  

Geisinger Health System used the following suggested practices in its approach to the ICD-10 conversion.

Approach ICD-10 as more than a technology conversion. Begin with the mindset that ICD-10 touches everyone, and therefore everyone has to engage. Build awareness of the full scope of ICD-10 for the organization.

Factor in the time component for a complete impact assessment. If you are considering engaging an external firm to complete the assessment, remember that this can be a lengthy process depending on the size of your organization. Don't wait too long to start, because the resources available to conduct those assessments may become more limited as the conversion deadline nears.

Develop a self-assessment. The first step in a suggested-practices model is to conduct a self-assessment in silos for coding, IT, and revenue cycle to determine what is needed to identify the type of partner you will require. For example, a self-assessment on coders will help determine their knowledge base and, therefore, how many hours will be needed to train them on ICD-10 and where to begin.

Identify a dedicated project manager. Each organization is different, and its size and situation will determine whether a project manager comes from talent within the organization or from an external vendor. If the latter is the case, a request-for-proposal process will help evaluate external resources for a project manager who can handle the entire conversion, not just the assessment phase. Once the resources have been invested in conducting an assessment with the project manager, continuity and intelligence need to be carried into remediation and implementation, especially given that every constituent's group in the organization will have different needs to bring ICD-10 to bear in its own environment.

Leverage professional organizations. Glean knowledge from organizations such as the American Health Information Management Association, HFMA, and the Workgroup for Electronic Data Interchange-and from the external project manager, if you are working with one-to build a plan for change management and education. The goal should be to prepare not only the coders but also the entire organization for the impact of ICD-10.

Engage executive leaders. Review the findings of the initial assessment in full detail with executive leaders. Gain their buy-in and communicate the importance of the initiative to build awareness with the rest of the organization.

Invest in a solid IT plan. Invest the time, effort, and dollars in technology infrastructure that surrounds all ICD-10 efforts and those leading up to it; be aware of the readiness of external vendors.

Demystify ICD-10. Groom current coders to serve as certified ICD-10 trainers; instill confidence in the migration, and provide a training resource for staff, sending a message that this can be learned.

Invest in education support. Do so both internally and externally to prepare coders and all clinical staff for ICD-10. Ensure that they have the tools that will help guide them through the coding process, including computer-assisted coding tools to help minimize productivity shortfalls.

Factor in the complexities of growth. Geisinger, for example, is going through a period of growth due to mergers and acquisitions, and is looking at the potential partners and where they stand with ICD-10 implementation efforts and how they will be integrated into both a current and a future state.
 

Publication Date: Wednesday, February 01, 2012

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