Executive Summary
Various combinations of ICD 10 procedures and
diagnosis codes are grouped together to form a single group known as Diagnosis-related group (DRG). A
specific payment is associated with a DRG that helps the patient in terms of
insurance reimbursements. This is the most common methodology used during
inpatient claims. This document will describes that with the transition of
ICD-9 codes to ICD-10 codes, “how the charges will change”, “what new changes
payers have to introduce into their claim systems”,” how it will differ for
outpatient and inpatient”.
The business needs and risk mitigation must be
tightly integrated in the release management process, the objective is to
deliver high risk components first to provide a longer testing duration.
Introduction
US Health care industry comprises of many entities
such as Life sciences, economic system, Information technology, Community,
government and most important people or in medical terminology “Patients”.
There are four major pillars that define the basis of this industry namely
patient, health care provider, life science and the most important one, Payer.
Currently in the US Healthcare Industry, ICD-9 codes
are used for identifying and reporting diagnosis and procedures. As per the new
regulation from the HHS department, they are migrating to the updated ICD-10
code set. This transition will present huge business as well as technical
challenges.
Health care industry is divide in many sectors and
there are inter dependency between them.it is a kind of aggregation of
different sector like Life sciences ,
economic system, Information technology, Community, government and most
important peoples or in medical terminology “Patients”.
In 20th century it is one of the fasted
growing sector where opportunity and services are equally available. It’s a
never ending process and evolving in nature.it has a direct connection between
people. In a broad sense there are four important pillars that will define the
basis of this industry namely as patient, health care provider, life science
and at last but most important Payer.
If you go by statics every country is spending a lot
of amount in health care industry right now and it has been increasing on year
on year basis. Currently world’s major USA is spending 20% of their GDP in health
care services. While India is spending nearly 4% of their GDP in healthcare
while china is investing 7% of their GDP. This document is all about the claims
and reimbursement amount that will be impacted by the transition from ICD 9 to
ICD 10. This document will give you brief idea about how this change will
impact the DRG generation, Claims and reimbursement and claim denial process.
We will also cover the impact on the US citizens, revenue changes for Payers
and Health care Providers. DRGs
have been used in the US since 1982 to determine how much Payer has to pays the
hospital for each "product", DRGs may be further grouped into Major Diagnostic Categories (MDCs).
Problem Statement:
·
Potential
disruption to patient care and challenge in defining the test strategy/roadmap
of multi-vendor based enterprise applications across multiple facilities
especially for HIM coding applications.
·
Inadequate
availability of testing staff, systems expertise, program management capability
due to multiple high priority projects running at the same time.
·
Lack
of centralized testing office to manage schedule, effort, resources, and
standardized practices across test management and defect management processes.
·
All
the existing application were working on ICD 9 codes, vendor required a
seamless transformation from ICD 9 to ICD 10 without impacting other
deliverables and observe the impact on claims.
·
Integration
of multiple application starting from Registration till charge validation.
Solution Proposed:
As a part of testing this complex remediation and
its impact on Claims, we can suggest an optimal testing approach i.e. Business Readiness Testing (BRT).
Following this approach, we can ensure the integrity and parity between medical
policies, benefits and finances of the payers and health care providers.
What BRT means?
Business readiness testing means testing that all
supporting processes are in place. In BRT we will conduct operational readiness
(Pre-release) of an application or product .It
comes under quality management systems. This type of testing support functional
part of the application which is very critical in production environment.
As per business readiness testing approach we have tested the
interconnection of application and to make sure a business system is tested and
fit for purpose before implementation in a ‘live’ business environment.
Compliance acceptance testing was one of the greatest feature for business
readiness testing that we have used.
Along with business readiness testing we may also
suggest repeatable testing to reduce the cost and provide better benefits to
business.
Repeatable testing is
done to identify the possible defects. We will test the systems again and again
with different set of test data to ensure that the application is not breaking
anywhere. We will apply multiple round of testing and may repeat the whole test
suite.
Organizations must have the ability to choose the right amount of
testing, balancing cost and risk. We may further understand in this document,
how to examine business readiness decision-making criteria by identifying and
prioritizing business risks and testable parts.
We have Developed a comprehensive business readiness approach
roadmap to guide the overall ICD-10 testing program including mid-course
correction in order to meet the ICD-10 compliance date.
Created Testing COE with centralized PMO to monitor the program and
enabling effective test governance. Leveraged
co-sourced delivery model to design and execute over 5000 test cases across
System, Integration and E2E phases.
Introduction of ICD 10 codes and Procedures:
According to WHO there is a classification of
medical diagnosis and procedure. These diagnosis and procedure are the real
action item of the entire health care industry. Diagnosis codes are used to
track the health condition of the patient starting from the beginning till the
patient is discharges from the hospital.to simplify the entire the process WHO
assigned number to each diagnosis code
and procedures and hence it became the universal medical codes and needs to be followed worldwide.
ICD stands for International classification of
diseases.ICD-10 is the current or tenth version of this series. Sometimes it is
also refer as ICD-10 CM codes.ICD-10 is more powerful and effective as compare
to its last version ICD-9 CM codes. During this transition all the services,
process and system that were supporting ICD-9 CM now have to support current
IC-10 CM codes to implement and improve services in a better way. Many
countries has already implemented ICD-10.the code set which is developed by WHO
has approximately 14,400 different codes through which we can track many
disease, injuries, and other kind of medical problems.as a part of further
classification we can again subdivide this code and it can reach till the count
of 16000.Still the WHO is working on different set of codes to increase it
further. The US health care industry is very particular about these codes.
Apart from these classifications they have their own set of code which is also
known as ICD-10 PCS.
Previously US health care was using the 9th
version of ICD procedure codes. ICD-10-
PCS has a seven character alphanumeric code structure that provides a unique
code for all substantially different procedures, and allows new procedures to
be easily incorporated as new codes. ICD 10 Procedures codes are basically used
for inpatient cases and few important outpatient services like ambulatory
service and emergency cases and surgical operation.
When we are transiting from ICD 9 to ICD 10 it will
have high impact on claims. It is not necessary that the amount which is
reimbursed by the insurance provider to the hospital or client cannot be same
this time. Because the ICD 10 has a variety of codes as compare to ICD 9.
What is claim and how it will generate?
In US health care
industry there is a complete life cycle of claims. From its generation till the
claims is settle by the insurer to the patient or hospital care provider.
Medical billing is a process in which claims need to be generated and submitted
to the insurer and then insurer will decide how much amount needs to be paid
based on the category in which the patient is registered. For several decades,
medical billing was done almost entirely on paper but after the revaluation of
IT the claims generation process become very easy. In order to assess the
medical bills which is generated by the hospital care provider needs to be
managed by some organization like American
Medical Billing Association in USA.
Claim generation is an
interaction between Hospital care provider and Insurance Company.
How Claims
generated through ICD 9 code till now?
Physician need to report the ICD 9 – CM
diagnosis code to the patient during coding in the system. Once the codes and
procedures are assigned to the patient the data will flow from upstream to
Billing or claims generation application. Once the claims is generated it needs
to be verified by the claim management team. Following steps are followed as
per the US health department.
- 1) The Medicare Administrative Contractor (MAC) will review and determine the coverage of codes.
- 2) MAC will not determine the amount CMS will pay for the services and facilities used by the patient.
- 3) MAC will use the codes to assign discharge values to the appropriate Medicare Severity Diagnosis Related Group (MS-DRG).
- 4) At a later stage the MS-DRG will drive the reimbursement amount payable to the patient.
The main objective of
all the hospital and insurance service provider is to mitigate the financial
risk of ICD 10 transition. When the MS-DRG
will shift between ICD-9 to ICD-10 the corresponding claim will also change.
Some of the plan member may increase the coverage facility because of the new
diagnosis code and procedure code implementation. The most important factor to
decide the DRG and reimbursement claims is the order and priority of the
diagnosis codes.
Once all the
operation/coding/and medical diagnosis completed on the patient it will be
discharged from the hospital and aftermath the process of claims generation
will be started. The claims generation and settlement process is different
based on patient type. For inpatient the service will be differed from the
outpatient/emergency/surgical cases.
While coding the
Inpatient the diagnosis codes and procedure codes are grouped in a specific set
known as Diagnosis Related Group (DRGs).These
grouper are the most important part of claim generation and payment process.
During ICD 9 same process has been followed to generate the claims and but at
that time the grouper was generated on the basis of priorities of DX codes
entered and procedure performed on the
patient.
By October 1 2015 the
implementation of ICD 10 will take place in USA. Following major changes will
come into picture.
- 1) Updated and more accurate medical terminology.
- 2) Enable literally for physicians.
- 3) It has the capability to add more codes
- Provide more detailed clinical documentation for injuries, conditions and diseases.
Changes in ICD 10
claims generation and examples of Coding:
Change in
Sequence:
Scenario
There are multiple
instances where change in sequence can affect the amount of claims and even DRG
value. In the below mentioned scenario there are two codes one is malignancy
and second one is Anemia with neoplastic.
Anemia with neoplastic
disease is sequenced differently in ICD-9 than in ICD-10. But in ICD-10
malignancy should be coded before the Anemia with neoplastic. This sequence
will provide the higher imbursement amount.
Multiple ICD 10
codes:
Scenario 1
For ICD-9 code
diagnosis code 568.89(other specified disorder of peritoneum), there are two
ICD-10 codes available K66.8 and K68.9.If the coder will code the case with
K66.8 there will be no MS-DRG shift hence there will no change in reimbursement
amount.
However if the coder
will code K68.9 then the MS-DRG will shift and there will be a potential upside
change in reimbursement amount.
Scenario 2
For ICD 9 diagnosis
code 5722 (hepatic encephalopathy), there are 6 possible ICD 10 translations
are available i.e. K7291, K7041, K7111, K7201, K7211, K7290. Reimbursement
amount will increase if we are using K7041 or K7290 as an ICD 10 code.
Potential
downside in Reimbursement amount:
It
is not necessary that the reimbursement amount will always increase, there are
some cases where the amount may decrease as well.
Scenario
For ICD-9 code 530.82 there is only one
translation in ICD-10 K22.8 (other specified diseases of the Esophagus). If the
coder will code K22.8 as a diagnosis code the reimbursement amount may
decrease.
How we applied
our Methodology:
As a part of business
readiness testing approach we have validated all the applications across the
vendor by designing multiple set of test cases based on different set of HIM
coding test data. We have tested the particular patient types
with a combination of diagnosis and procedure codes to validate the changes in
DRG generation and claims.
A simple test data sheet is generated with
patient demographics and other details including the combination of HIM coding
data. After registration of the patient we place certain orders and then
discharge the patient for coding as per the process flow defined for health
care providers. The coding for a patient can be done in various applications
but at the end CRS (coding and
reimbursement) system will be the same.
After assigning priority to
all diagnosis code and procedure codes the DRG gets populated and based on the
sequence of codes reimbursement amount gets generated. Since we have prioritize
our testing and tested the application as a whole it becomes very easy to
identify the possible change in reimbursement amount. Apart from that the
testing team is aware about the ICD 9 codes hence it became easy for a user to
easily do the comparison.
4 major impact of
transition on which we applied our testing approach.
- Planning to mitigate negative impacts.
- Managing the process of migration
- Ensuring the business remediation and due diligence
- Manage tools and expertise to maintain the change and reduce the financial loss.
Ensuring the
business remediation and due diligence
Changes to hospital service provider practice
management system to accommodate the ICD-10 codes are potentially a large
expense. Depending on the contract between hospital system and vendor, the
system upgrades may be included in ongoing maintenance. The system upgrades may
be completed by the vendor when they install the upgrades for the version 5010
HIPAA transactions. Some vendors may charge for the upgrades. Provider need a
contract to determine if regulatory updates are included in their maintenance.
Following due diligence criteria taken care while
doing the business readiness testing and business remediation process.
- Can current system accommodate the data format changes for the ICD-10 codes?
- Will there be a charge for the upgrade?
- When will the upgrades be available for installation?
- When will the upgrades to system be completed? So that the hospital can start system and integration testing for the specific module.
- If existing system is unable to accommodate the ICD-10 codes or vendor is not upgrading the system for ICD-10, healthcare provider likely need to purchase a new system. If it needs to purchase, plenty of time and required research different systems and determine the best system available. Provider should also think about budget for the costs of a new system.
How business readiness testing approach helps us to
solve above mentioned challenges
Since we have already
performed ICD 9 testing for the specific healthcare provider, we were well
equipped and confident about the changes. By applying system readiness testing
we ensured the customer that system is ready to accept ICD 10 codes and if not
then what changes that vendor need to do?
The
other aspect of business readiness testing approach to maintain the bridge
between vendor – customer and
service provider to insure all kind of charging fees or upgradation fees
and there is a continuous check between vendor and service provider to insure
all the installation and patches on time.
By applying system integration testing we can
thoroughly check the behavior of the application during end to end testing
scenarios. We have designed the testing by applying BRT in such a way that all
the aspects should be covered.
Planning to
mitigate negative impacts
The ICD-10 transition introduces
number of risks that impact the providers, payers as well as the patients.
Risks such as financial risks,
Knowledge Transfer risks, Coding errors, etc.
Due to the change in the diagnosis codes from ICD-9
to ICD-10, the DRG calculation may take a hit and that in turn affects the
payments involved. In many cases, the sequencing of the diagnosis will change
due to this transition and may result in a changed DRG weightage.
To avoid such alterations and risks, we need to
understand and analyze the high risk claims well before this transition
happens. And that has been our approach while testing for ICD-10 transition.
We have considered all such claims and designed our
test scenarios in that manner. For every such claim, we have analyzed ‘what
types of patient it is applicable to?’, ‘what kind of diagnosis and procedures
were involved’, ‘what are the corresponding ICD-10 codes that will be
applicable for that case’, and all those possible risks that may arise post the
actual transition.
Managing the
process of migration
Professional need to have the
ICD-10 codes implemented and report them in all transactions for encounters or
discharges based on the designated date. Meeting this compliance date requires
healthcare provider to begin work and analyzing their systems and identifying
the necessary changes. ICD-10 implementation work overlapped with the
implementation work for the version 5010 HIPAA transactions. Following are the
major focus areas where provider needs to focus from transition perspective.
Administrative Transactions:
Before ICD 10
transition, all the machines and soft wares are designed to handle ICD9 codes
but they are not ready to accept ICD 10 codes. There are many systems and work
processes where provider need to review for possible modification or upgrade to
ICD-10. Following are the areas where administrative reform and upgrade
required.
Clinical
documentation
The increased
specificity of the ICD-10 codes requires more detailed clinical documentation
in order to code the diagnosis to the highest level of specificity. Whatever
clinical documentation that providers has used so far will become insufficient
since the granularity of the ICD 10 data will increase and it will add more
details in the patient demographics section.
Encounter
forms or “superbills”
Current encounter forms or superbills listing
hospitals practice’s frequently used ICD-9 codes need to be updated for ICD-10.
The increased specificity of ICD-10 will make these forms more complex and
lengthy.
Practice
management system
Hospital’s practice management
system needs to be upgraded to accommodate the data format of the ICD-10 codes.
Electronic
health record or electronic medical record system
Healthcare provider
needs to update their electronic health record or electronic medical record
system needs to be upgraded to accommodate the ICD-10 codes.
Quality
Reporting
Any quality reporting
currently do needs to be updated to ICD- 10. Provider needs to consider how
these reports are generated and if it involves a system or work process that
needs to be updated.
Public
Health Reporting
Any public health
reporting currently do needs to use ICD-10 codes after the compliance date.
Health care provider need to review how these reports are generated and if it
involves a system or work process that needs to be updated.
Contracts
Any contracts that
providers have with payers need to be reviewed to determine the impact of
moving to ICD-10.
Manage tools and expertise to maintain the change and
reduce the financial loss
Regardless of the remediation
approach a health system takes, the first critical step is understanding the
threat landscape. Among the top risks is the potential impact of an ICD-10
transition on the provider’s revenue cycle. The greatest threats to reimbursement
neutrality are the potential DRG shifts between ICD-9 claims and corresponding
ICD-10 claims.
To minimize risk, the provider must
first understand the changes associated with ICD-10. Most providers will have
already received training in the ICD-10-CM and PCS code sets and realize they
are moving from 16,000 codes to some 150,000 codes. For example, ICD-9
encounter codes (V codes) for rehabilitation are no longer acceptable as a
principal diagnosis; coders are instructed to assign the medical condition as
the reason for the encounter when coding in ICD-10. The sequencing rules of
several diagnoses have changed as well, with many of these alterations
automatically resulting in changing reimbursement. Anemia with neoplastic
disease, for instance, is sequenced differently in ICD-9 compared with
ICD-10-anemia is sequenced first in ICD-9, but malignancy should be the
principal diagnosis in ICD-10. This sequencing change may result in a different
DRG weight. The problem, in general, stems from the increased granularity of
ICD-10, which significantly increases the coding options that may change the
DRG weight. Factors that may trigger a DRG shift include mistakes by
inexperienced coders and insufficient physician documentation at the point of
care. In some cases, the financial impact may be unavoidable, requiring a
provider’s team to reopen conversations with payers. Identifying reimbursement
risk and establishing priorities for remediation can prove a daunting task.
Conclusion
Business readiness testing
helped health care provider to seamlessly Implemented the transition from to
ICD 10 cutting across multiple
application and service areas. This approach can help in future as well
target
Any kind of new remediation or
conversion happening in service provider area.
Author -- Ravi Upadhyay
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