Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

ICD-10 Implementation is a Reimbursement Risk for Physicians

By Jacqueline DiChiara

- ICD-10 delay and implementation news is on the tip of many a healthcare executive’s tongue. With the possibility of an upcoming ICD-10 implementation freeze, swirling industry-wide confusion, anticipated revenue cycle disturbance, and a confirmed lack of industry-wide preparation come October, the healthcare industry is in a fluid state of noted disarray.  

ICD-10 implementation chatted with Michael Clark, Chief Operating Officer at Evariant, to garner a brighter baseline regarding suggested physician focus regarding revenue cycle and cash flow, what allegedly successful end-to-end testing results from the Centers for Medicaid & Medicare Services (CMS) actually implies, areas of suggested concentration for CFOs, and matters of physician engagement's implications. What is the most significant ICD-10 challenge physicians will face come October?

Michael Clark: The most significant challenge to ICD-10 is clinical documentation and the real, or perceived, impact on productivity and reimbursement with limited known personal benefit to the physician. Physicians will need to document to a different level of specificity. ICD-10 doesn’t do anything in terms of changing how a physician practices medicine. It has everything to do with how the encounter/treatment gets coded and billed.

If the physician doesn’t appropriately document, then it won’t get appropriately coded. If it doesn’t get appropriately coded, there is risk of reimbursement and cash flow to both the physician and the health system whereby everyone works harder and adapts to the regulation to find reality is limited or there is no benefit. There is no near term perceived benefit to the physician going to ICD-10, which is why the AMA, MGMA, and physician advocates have fought this so hard for so long.

READ MORE: Key Ways to Start A Hospital Revenue Cycle Turnaround Process What are your thoughts about CMS’s "successful" end-to-end testing results?

MC: An important milestone is that the largest payer – the government – is effectively ready, but that’s only one side of the equation. CMS does not really care if it takes you 1 day or 100 days to file that claim. The anxiety is upstream with the physicians and health systems who depend on their Medicare/Medicaid mix and reimbursement. CMS wants to make sure when you file it, it comes in, in the right format, in an electronic format they can manage efficiently on their side.

CMS, like the other payers, will have their own right, appropriately so, to review, and agree or disagree with the new codified encounter (ICD-10 versus ICD-9).  Given the exponential expansion of the number of codes, neither side will be immediately competent to be efficient. There is an advantage to the hospital and health system if appropriate documentation specificity helps “get it right” up front. But if they can’t, then it just delays the actual adjudication, certainly more than currently exists today, which will only exacerbate an already massive problem in the revenue cycle. How do you predict ICD-10 will specifically impact physicians within the revenue cycle spectrum?

MC: There is human knowledge: "Does the physician know what he/she needs to document?" There is technology: "Can the EHR or input technology like point-and-click or voice recognition help?" Then there is process change. And all of it ultimately affects the hospital and health systems’ impact on the revenue cycle. The heavy lifting falls on the physician, who the health system doesn’t or can’t control.

READ MORE: Healthcare Price Variation a Challenge for State, Local Leaders

The migration to ICD-10 is a difficult, risky transition. If the physician’s knowledgeable and educated on the appropriate level of specificity of documentation needed, but he or she can’t figure out how to appropriately document in the EHR or Coder’s source system, that’s a problem.

If the physician knows what he or she needs to document, given a greater level of specificity, it slows the physician's productivity, forcing the most knowledgeable and capable to spend more time documenting than they did before – feeding and substantiating the physician’s argument, "What’s in it for me?"

The flipside of the challenge is if the physician doesn’t know the level of specificity to document, and he or she simply pushes through documentation via current means – EHR templates, transcription, voice recognition – to a coder, the coder has no choice but to not code the encounter and send a clarifying inquiry to the physician, which creates new workflow and DNBF issues.

Over time, years and generations of physicians will learn what to document, and then they’re back to the same other issue of, "How can I document to a great level of specificity, and not lose productivity?" Process and technology have to address the challenge. It’s a vicious burden of change on all stakeholders, each having attempted to solve the problem from their compartmentalized view – not that there haven’t been millions spent preparing.

At the end of the day, the heavy burden is on the physician with little to no meaningful immediate benefit to spend time documenting. He or she knows what the patient’s condition is and in a referral situation – when done effectively – the receiving physician is well aware of specificity through other verbal and non-verbal conveyance. With ICD-10, physicians are the ones treating the patient and the expectation is they need to document a greater level of specificity for appropriate care, professional appropriate reimbursement, and medical/legal/regulatory compliance consistent with the expanding ICD-10 code set, and that takes time.

READ MORE: Is Radiation Overuse Contributing to Higher Healthcare Costs? How are healthcare CFOs approaching ICD-10-based revenue cycle challenges?

MC: ICD-10 is about charting clinical specificity and its specificity liberates and enables fantastic previously undocumented clinical, operational, and appropriate financially relevant codified detail.  The kinds of details, codified or implied that will lead to and ultimately be the Holy Grail of patient engaged care.

Historically, CFOs have not necessarily been engaged strategically around the revenue cycle, always more tactical and more about operational things like cash management and shrinking the DNFB down. The conversation hasn’t really been focused on how we get the right patients into the hospital in the appropriate service lines that help us optimize or maximize our revenue and cost while meeting the mission. I think the CFOs and the revenue cycle will ultimately have a far more consumer-focused mindset.  

Now because of value-based pricing, health systems aren’t going to get paid just because somebody walks in the door. They have to think differently about their consumer, and which consumers do I want to keep out of the hospital and manage in a different way, and which consumers do we want in the hospital because it’s advantageous for us?

Hospitals and health systems have not historically promoted, advertised, and marketed by service line, or to their strengths. Healthcare is becoming obviously more consumer-driven. Patients are more educated so the CFO needs to embrace the consumerism strategically. How is the significance of physician engagement evolving?

MC: It’s really engaging the physician in the specialty and the service line that they’re in, and creating strategies to coordinate, identifying those patients that you want from a volume standpoint, and then identifying those patients you still want, but you don’t want them in the hospital from a value standpoint. And how do you set up other care centers or other ways to keep them out of the hospital? The only way to do that is to engage them.  

If healthcare consumers don’t know who the physicians are and what they do because you don’t build a healthcare brand with that patient, they’re not going to seek you out, and physicians end up losing volume and losing the high dollar service lines that actually keep them in business. If physicians lose volume, the hospitals and health systems lose volume because it’s the physician’s appropriate referral that generates the demand. Engaging them is kind of at the center of the universe of any hospital moving from volume to value, or having a portion of their business volume-related, and a portion value related.   


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