Policy & Regulation News

Healthcare Providers Await Slashed Revenue Following ICD-10

By Jacqueline DiChiara

- Will ICD-10 implementation on October 1 kick off as a dynamic bang or a lackluster bust? Most healthcare providers are optimistic when it comes to ICD-10 reimbursement and workflow expectations, according to results from a recently released ICD-10 survey of healthcare providers from eHealth Initiative and the American Health Information Management Association (AHIMA). Despite reported confidence, the fear of slashed revenue once the clock strikes come October 1 is still very much alive and well among healthcare providers, confirms the survey. 

ICD-10 implementation

Two-hundred and seventy-one recently surveyed healthcare providers, mostly those from large hospital or health systems with over 30 physicians or 300 beds, relayed their opinions regarding the projected ripple effects various elements of the ICD-10 transition – testing readiness, expected financial, clinical, and operational impacts, and follow up strategies – will have on the healthcare industry.

As RevCycleIntelligence.com reported, industry-wide preparation is key, especially when it comes to protecting revenue. According to AHIMA and eHealth Initiative, it is essential healthcare providers actively evaluate their ICD-10 readiness levels and take final steps to prepare. Although there is loudly confirmed fear that physicians, payers, and hospital inpatient facilities will suffer great financial risk come October, AHIMA and eHealth results confirm provider organizations are still trailing behind when it comes to testing endeavors.

A sizable disparity exists when it comes to preparation among larger organizations and smaller organizations, the former being much further ahead of the curve. As HealthITAnalytics.com reported, almost 1 in 4 physician providers confirmed they cannot handle the complexity of the switch come October, with 59 percent most concerned about the specific impact of the ICD-10 transition upon their revenue and cash flow.

Nonetheless, healthcare providers’ grave financial concerns linger. Primary apprehensions about decreased revenue, diminished productivity levels, and greater inaccuracies are tangible, confirms AHIMA and eHealth. The vast majority of healthcare providers state they anticipate the need to progressively manage the impact of ICD-10 post-October 1. Although 34 percent of healthcare providers did not formally conduct a revenue impact assessment, 38 percent suspect the first year following ICD-10 implementation will negatively impact their revenue. Most of this latter group additionally confirmed ICD-10 will decrease coder productivity, coder accuracy, increase denied claims, and decrease reimbursement.

The survey results confirm many healthcare organizations have yet to conduct essential preparation steps, such as testing efforts, but have not yet dipped their toes into the realm of revenue impact assessments. Yet, it also confirms there is widespread readiness in place across the healthcare spectrum. “By now, the majority of organizations responding to the survey have undertaken most of the steps to prepare for the transition, with the exception of testing and revenue impact assessments,” the survey results confirm.

Seventy-eight percent of healthcare organizations provided ICD-10 awareness and educational materials to staff, with 73 percent developing a team to lead efforts for implementation preparation. It is not clear what the actionable results of such are.

As RevCycleIntelligence.com reported, it is possible that any positive financial aftermath within the immediate October, November, and December recovery period, and beyond, will merely be due to temporarily inflated numbers. Complicating things further is the fact that any newly acquired data may be simply difficult to quantify because it is too fresh to make intelligent revenue cycle management decisions upon. Even the Centers for Medicare & Medicaid Services (CMS) confirms they will wait to collect data before financial or medical decisions are made based on what has been collected.

Additionally, as RevCycleIntelligence.com states, it is indeed possible October will mirror the substantial cash flow delay due to a lack of testing and severe claims processing issues of ANSI-5010.

October 1 is by no means an end to the ICD-10 game. It is merely the end of a chapter and the beginning of a new one. With so much collective trepidation, the survey results confirm optimism and hope in the mix of aforementioned negativity. Thirty-five percent confirm ICD-10 will improve claim accuracy. Thirty-eight percent of respondents suggest many activities will actually be easier to execute come October, such as analyzing and reporting measures on performance, quality, and safety.

As RevCycleIntelligence.com advises, consider a series of imperative steps to make sure you are ICD-10 ready. Only 71 days remain until the ICD-10 implementation deadline goes into effect. As the industry expects both the expected and the unexpected, it is vital the aforementioned news can be shared so practices can assess where they currently stand and continue onwards towards the ICD-10 journey within the next couple of months to maintain healthy revenue activity.