At the Margins

ICD-10 from the inside: How Munson prepares for the unexpected

This is part of a series of weekly posts from the frontlines of the ICD-10 transition. Each blog post will recap interviews with Advisory Board members who talk to us about the transition at their organization. Make sure you're subscribed to our blog so you don't miss out.

Think about how much our health care industry has spent on ICD-10 preparation and education. Yet despite this investment and a successful October 1 go-live, we still cannot forecast what is ahead. Top organizations are asking what will make the difference between success and failure in the coming weeks and months.

Predicting the road ahead is difficult for a number of reasons. Post-ICD-10 efforts across all organizations still largely lack prioritization because we have yet to measure sufficient outcomes. It is too early to have conducted ongoing monitoring and few have the technology to adequately track a full complement of key indicators over time.

Fortunately, there are lessons to learn from some of our best prepared members, like Kelly Whittle, ICD-10 program lead, and her team from Munson Healthcare. Headquartered in Traverse City, Mich., Munson Healthcare, an eight-hospital system, instilled an ethic of preparation and contingency planning that is grounded on leveraging data and analytics. As the earliest metrics start to come in, we can learn a lot from this approach and how to prepare for unexpected challenges.

Pursue a comprehensive analysis of productivity data

In a short survey of our members using Revenue Optimization Compass, our comprehensive mid-cycle analytics technology, 86% reported experiencing ICD-10-related IT issues within their internal systems. While many of these issues have not halted business, they trim away at productivity and can be cumulatively disruptive if they reappear across future month-ends. Ongoing monitoring and escalation will be essential.

While Munson Healthcare escaped the go-live with flying colors on the IT front—all key 36 applications went off without any hitch or outage—leaders are nonetheless keeping a close watch on a range of metrics that impact productivity. For Kelly, access to data and analytics before, during, and after the transition is a vital way to help her teams stay adaptable in the event something unpredictable arises.

Closely analyzing coder productivity pre- and post-transition helped Kelly’s teams prioritize course corrections. In Munson’s smaller hospitals, inpatient coding time increased around 10%. At the 400-bed tertiary medical center, they reported about a 38% increase. Thanks to pre-transition projections, Kelly’s teams had established contingency plans to prioritize when and where they really needed to focus. As a result, her team implemented a strategy to offset time for inpatient coding where it was most critical. Using an ICD-10 coding "huddle," they were able to bring the most difficult cases to a cross-functional team for more efficient and effective coding.

The downstream impact of a glitch

While one of the earliest ICD-10 issues was called a "glitch," the impact has turned out to be more widespread, even for some of the most prepared organizations. According to latest reports, problems exist with some medical necessity determinations because software in Medicare databases did not include translations of certain codes into ICD-10.

While CMS and the Medicare Administrative Contractor (MAC) plan to update their local or national coverage determinations (LCD and NCD, respectively), these missing codes have increased the procedures or tests that do not have medical necessity. This causes delays, may require future appeals, and will certainly impact reimbursement or even patient decisions to pay out-of-pocket.

Kelly reports that while Munson Healthcare waits for the medical necessity fixes to be published in the software databases, operational flows have been delayed because of the LCD issue. With 65% of all revenue coming from outpatient areas, this creates a significant reimbursement threat for the organization. Fortunately, Munson Healthcare had contingency plans in place for cash flow deficiencies and they expect to be able to weather this issue through until resolution.

Waiting for inevitable payment delays and denials

Despite being one of the most prepared organizations we partner with, Munson Healthcare is not letting early success cloud its long-term vision. Kelly reports a 98% rate of clean claims exiting their billing system. Additionally, no delays have been reported in early payments from large payers like Blue Cross. Yet her team has already planned for how to adjust resources in the event of unexpected denials. They have cross-trained billing staff to join their denials team, believing that a combination of in-house knowledge and billing expertise will help them adapt to the challenges payers are likely to send their way.

For many, data on payment delays is still coming in. Of members participating in our survey, 80% reported no delays in payment (at that time). For those who reported delays, however, the vast majority cited governmental payers as among those already denying their earliest claims. Conventional wisdom suggests we are still too early for all payers to have informed hospitals of delays or denials. Organizations should monitor data closely and adapt to trends as more information comes in.

We recommend the approach adopted by Munson Healthcare to stay on top of the unexpected. Track metrics through a centralized reporting team, not the business units, to improve efficiency and standardization. Report KPI data on a daily basis across multiple key stakeholders. And most importantly, map scenarios and outcomes to contingency plans so teams know what to do in a variety of circumstances. All organizations can benefit from these principles as they prepare for uncertainties down the road and look to understand long-term success factors.


Next article on ICD-10

ICD-10 from the inside: A CDI lead shares her transition experience

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