ICD10 READINESS AND PREPARATION ARE YOU READY AAHAM

ICD-10 READINESS AND PREPARATION ARE YOU READY? AAHAM WESTERN REGION May 4, 2015 Presented by: Elaine Lips, RHIA President & CEO ELIPSe, Inc. 1

Today’s Speaker Elaine Lips, RHIA is the President & CEO of ELIPSe, Inc. She has thirty years experience in HIM consulting and information systems in the user, integrated health organizations, and vendor environment Elaine Lips, RHIA President & CEO ELIPSe, Inc. 2 Elaine is an Advanced Member of HFMA , Senior Member of HIMSS (Health Information Management Systems Society), and AHIMA. She served on CHIA’s (California Health Information Association) Board of Directors. Elaine was a speaker at AHIMA’s ICD-10 Summits in 2011, 2012, and 2013. She is the senior ICD-10 Advisor to several hospitals in So CA. Elaine has been serving on the HIMSS ICD-10 Task Force for the past three years, and is an Editorial Board Member for Medical Record Briefings. She is a frequent speaker and author. Elaine was the recipient of AHIMA’s Visionary Award.

DISCLAIMER • This material is designed and provided to communicate information about ICD 10 readiness in an educational format and manner • The author is not providing or offering legal advice but, rather, practical and useful information to achieve ICD 10 readiness • Every reasonable effort has been taken to ensure that the educational information provided is accurate and useful. 3

AGENDA • Impact of ICD-10 • Why Physicians Care About ICD-10 or WIIFM • Steps to Compliance • ICD-10 Readiness – Lessons Learned So Far 4

ICD-9 vs. ICD-10 ICD-9 Issues • • • More than 30 years old; outlived its usefulness ICD-10 is not new – it was developed between 1983 and 1992 ICD-11 is already under development U. S. is next-to-the-last industrialized country using ICD-9 Running out of codes to assign especially for new procedures ICD-10 Major Objectives • Start date of October 1, 2015 • ICD-9 codes will not be accepted after this date • Improves accuracy and efficiency of coding • Standard code set that is expandable • Improves communications with physicians • ICD 10 has detail needed for population health 5

Do You Know…. • The Energy and Commerce Subcommittee on Health held a hearing on 2/11/15 exploring the 10/1/15 ICD-10 go live date • The GOP Chair and the Dem Ranking Member issued opening statements supporting this date and six of seven witnesses testified as such • The only dissenting views from the Committee were from two GOP members, both docs; it is difficult for many docs in small groups to code in ICD 9 and prepare for ICD 10 • The full committee chair, Fred Upton also issued a statement supporting 10/1/15 compliance date 6

Do You Know…. • The US House of Representatives Committee on Energy and Commerce announced that the House voted 392– 37 to approve permanent repeal of the sustainable growth rate (SGR) formula • Late Tuesday, April 24, the Senate voted 92 -8 to finally repeal the SGR formula adjusting Medicare payments to physicians, and subsequently signed by President Obama • Unlike last year, an ICD-10 implementation delay was not part of that legislation • ICD-10 stakeholders can breathe a sigh of relief, but we have not made it out of the woods just yet! 7

Do You Know…. • It’s been a 7 -year delay for ICD-10 implementation • There are only 21 Mondays remaining before 10/1/15, or • There are only 5 months remaining before 10/1/15 • ICD 10 has detail needed for population health • October 1, 2015 is a Thursday v. Coders will code in ICD-9 Mon-Wed and then switch to ICD-10 on Thursday 8

Facilities Using The Code Set Physician ICD-10 -CM CPT/HCPCS *Only required for reporting procedures performed on hospital inpatients 9 Hospital Inpatient ICD-10 -CM ICD-10 -PCS* Behavioral Health ICD-10 -CM CPT/HCPCS Outpatient ICD-10 -CM CPT/HCPCS All Others Long Term Healthcare ICD-10 -CM CPT/HCPCS

Who Must be Compliant? Hospitals Medical Devices Physicians Outpatient Facilities HIE/RHIO ICD-10 Compliance CDC Home Medical Equip. State Medicaid Programs Health plans & payors 10 Home Health Agencies Reference Labs

Non-Covered Entities • • 11 Worker’s Compensation Auto Insurance Disability Insurance Plans Quality Measures Reporting v. National Quality Forum (NQF) v. National Committee for Quality Assurance (NCQA) 11

IMPACT OF ICD-10 12

Scope of Impact • Organizations v Providers of all types v Payers & Clearing Houses v Patients • Information infrastructure v All systems and databases v Interfaces v Reports: internal & external v Forms • Workflow v Clinical documentation v Access management v HIM and Revenue Cycle v Quality & Scorecards v Contract management 13

This Was Then – 2013/2014 2013 Jan-Mar Apr-Jun Jul-Sep Oct-Dec IT Upgrades & Testing for ICD-10 Phase I: ICD-10 Assessment & Planning Clinical Doc Enhancement for ICD-10 Education and Training for ICD-10 Compliance Date October 1, 2014 15 Adjust & Stabilize

Now - Tight Implementation Timeline 2015 2014 Jan-Mar Apr-Jun Jul-Sep Oct-Dec Now < 5 Months remain until ICD-10 IT Upgrades & Testing for ICD-10 Phase I: ICD-10 Assessment & Planning Clinical Doc Enhancement for ICD-10 Adjust & Stabilize Education and Training for ICD-10 Compliance October 1, 2015 16

Impact on Revenue Cycle Blue = low impact Red = high impact 17

Impact on Revenue Cycle • • • • 18 Preauthorization and Scheduling Patient Access/Admitting/Registration Physician Clinical Care: Orders, Diagnoses, Results Case Management/Utilization Management Laboratory, Radiology, Ancillary Results Charge Capture Transcription Coding Pre-bill Edits Claims Processing/Status/Follow-up Payments Adjudication Appeals Audits Denials Reports

Documentation Impact – Diagnoses Clinical documentation will need greater specificity • • 19 Not more, just more detail Link complication to specific disease process Laterality and detailed locations Episode of care for all injuries Gustilo Classification for open fractures Trimester for Obstetrics Unspecified categories may impact reimbursement

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Impact on Revenue Cycle • Documentation requirement changes • Coding • Prolonged learning curve Reduced productivity • Billing • Payers may take longer to adjudicate claims • Increased denials • Delayed cash flow 21

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Reports and Conversion Impact External • CORE measures • Benchmarking • Registries • Regulatory • HIE • State Reporting 23 Internal • Patient Care • Quality & UR • Registries • Billing & Reimbursement • Research • Regulatory • Med Staff Credentialing

Organizational Financial Impact Transition Costs • Hardware upgrades • Software upgrades/changes • EMR template revisions Training Costs • Hundreds $ per provider • Thousands $ per coder Reimbursement Unknowns Denials Unknowns 24

Why Physicians Care About ICD-10 WIIFM (What’s In It For Me? ) 25

Why? • • • 26 Enhances individual patient care Improves clinical data among care team members Supports population health management Improves reimbursement rates and costs RAC risk mitigation Source: Navicure

Potential Benefits • Descriptive enough for precise medical and clinical identification. • New codes for emerging diagnoses and procedures • More detailed information than ICD-9 • May help improve quality by facilitating better evaluation of medical processes and outcomes • May improve the accuracy of payments for services rendered 27 Source: Centers for Medicare & Medicaid Services

Additional Potential Benefits Ø Measuring the quality, safety and efficacy of care Ø Designing payment systems and processing claims for reimbursement Ø Conducting research, epidemiological studies, and clinical trials Ø Setting health policy Ø Conducting operational and strategic planning, and designing healthcare delivery systems Ø Monitoring resource utilization Ø Improving clinical, financial, and administrative performance Ø Preventing and detecting healthcare fraud and abuse Ø Tracking public concerns and assessing risks of adverse public health events 28 Source: Centers for Medicare & Medicaid Services

ICD-10 Effects on Reimbursement Traditional CPT-and HCPCS-based reimbursements will not be directly affected since these codes are not part of the ICD-10 change. Indirectly, fee-for-service payments may potentially be affected for the following reasons: • Increased denials due to incomplete or inaccurate translation of existing policies, benefit, and payment rules in payer systems • Delays in payments because of challenges in claim processing 29 Source: CMS Implementation Guide for Small and Medium Practices www. CMS. gov/ICD 10

What’s the “Good” News? • Much greater accuracy in matching diagnoses and procedures • Improvements in clinical decision support, quality (reporting) and disease management capabilities • • Much more information needed to support the new modifiers • We need to determine who and how this information will be collected • Discussions surrounding clinical and billing “impact” and responsibilities for new workflows are required 30

Steps to Compliance Assessment & Gap Analysis 31

Program Organization Structure Multi-Hospital System • Executive Sponsors • Project Sponsor • Work Groups • Site Sponsors • Consulting Team Standalone Hosp • Executive Sponsors • Work Groups • Sub Task Groups • Consulting Team Executive Sponsor(s) Project Sponsor(s) Site Sponsors ELIPSe CHAIR LBMMC/MCH Physician Liaison IS Leads OCMMC Managed Care Contracts PFS Leads SMMC HIM Leads 32 Project Team Planning Work Group COO + CFO Project Mgmt Technical Operations Analysts

Assessment & Gap Analysis • Technical and Operational Inventory v Identify current use of ICD-9 in systems, workflows, and managed care contracts • Assess training and education needs • Identify internal and external reports • Identify gaps with recommendations for remediation • Prepare Budget • Implementation Plan 33

Assumptions & Constraints 34 Multi-Hospital Standalone Hospital • Workflows standardized around EMR • Analysis performed at a high level due to scope and available hours • Description of work flows and the use of ICD-9 taken at face value • Industry partners not ready to disclose timing, procedure or cost information • Budget and project timelines will need to be developed in some areas using assumptions based on prior experience • Workflows not standardized around EMR • Analysis performed at a high level due to scope and available hours • Focus interviews with more departments at one time • Able to obtain ICD-10 ready dates from some vendors • EMR vendor ICD-10 readiness • Budget and project timelines based on new compliance date

Assessment & Gap Analysis Standalone Hospital Multi-Hospital System • • EMR fully rolled out EMR product suite 21 upgrades of minor apps ~200 reports ~10 forms Acquired hospital Started medical foundation CDI program maturity just for some hospitals • EMR clinical doc template refresh • ICD-10 content wove into education 35 • • • EMR in early adoption cycle Best of breed applications 21 upgrades more substantial ~600 reports ~500 forms • CDI program maturity • ICD-10 woven into build of OB clinical documentation

Assessment Deliverables • • 36 ICD-10 Budget Education & Training Plan Communication Plan Implementation Plan

ICD-10 Timeline Example 37

ICD-10 Project Plan 38

Organization of Implementation Work Streams Multi- Hospital System Standalone Hospital • ICD-10 Systems Compliance • Revenue Cycle/Denials Management • Revenue Cycle Redesign • Clinical Documentation/ Content Enhancement • Physician Education • CSI (CAC, Scanning, Image. Now) • Physician Education & Alignment • Coder Retention Strategy • ICD 10 Integrated & External Testing • ICD-10 Data Strategy • Full ICD-10 Operations • Program Management 39 • ICD-10 Integrated & External Testing • Program Management

Key Budget Components • Operational experts necessary to support business processes, namely Coding and Claims Billing systems • Extension of internal training resources • Clinical Documentation Improvement Strategies or Redesign • Significant resources necessary to prepare & support IS for upgrades and ongoing support • Physician Education • Internal and External testing time and resources 40

Implementation Risks • Big Bang cutover on 10/1/2015 • Steep learning curve – revenue impact • Shortage of qualified coders – availability and cost • Costs • Managed Care game changer • Clinical documentation specificity 41

What’s Keeping the CFO Awake at Night • • • Cash flow disruption Denials HIM coder retention Cost of double/dual coding ICD-10 is mandated ROI may take years or maybe no ROI

ICD-10 Readiness Lessons Learned So Far 43

Site Sponsor Leadership Knowledge • • HIPAA mandated compliance by October 1, 2015 Enterprise change – not just a revenue cycle, IT, HIM or vendor issue Financial and productivity indicators will be impacted (down) Breadth and extent of preparation and ongoing impact Investment • Most expensive and dramatic change to healthcare in decades • Timing of the project vis à vis your Fiscal Year budget cycle Perspective • Opportunity to further your hospital’s market leadership through strategic use of ICD-10, going beyond basic technical compliance • Long term view is required Change management 44 • Support your managers and staff as they convert to ICD 10 • Uphold project goals and deadlines • Help maintain the organization’s focus

Organization of Implementation Work Streams Multi- Hospital System Standalone Hospital • ICD-10 Systems Compliance • Revenue Cycle/Denials Management • Revenue Cycle Redesign • Physician Education • Clinical Documentation/ Content Enhancement • CSI (CAC, Scanning, Image. Now) • Physician Education & Alignment • ICD-10 Integrated & External Testing • Coder Retention Strategy • Program Management • ICD 10 Integrated & External Testing • ICD-10 Data Strategy • Full ICD-10 Operations • Program Management 45

Communication Plan Organization-wide • Intranet site • Brochures • Newsletters (Medical Staff, hospital employees) • Countdown to Implementation Date flyer/banner • Education plan roll-out Don’t forget the patient 46

Revenue Cycle Readiness • Coding/Abstracting systems ready now • Billing system can hold both code sets for dual or double coding • Plan B: Cash retention strategy in case of cash flow irregularity issues • Denial management team • Work edited claims daily • Coders given ample time for dual or double coding 47

Testing • Do end-to-end testing early and often v. Don’t rely on one test • Understand what your payer is testing • Use production data for testing true accuracy • Understand what your Clearinghouse is doing with your data to test the files and what you expect in return • Paper claims 48

Budget Considerations • Additional resources for integrated and external endto-end testing • ICD-9 backfill coders during dual/double coding time • Increase net new coder FTEs prior to 10/1/15 • Increase net new CDI FTEs • Temp FTEs to manage claims resolutions after 10/1/15 49

Early Adoption – Thinking Outside the Box Code only in ICD-10 at least 4 months prior to compliance date ICD-10 Fiscal Cliff 50

Early Adoption Strategy People Process Technology 51

Early Adoption Strategy • An “Early Adoption” strategy was developed, wherein the conversion to the use of ICD-10 codes as the primary coding method is adopted far ahead of the 10/1/2015 compliance date. • Several benefits are anticipated: v HIM coders will traverse the lengthy learning curve prior to the compliance date v A base of historical data with ICD-10 codes, that can be used in contract and reimbursement monitoring 52

Early Adoption Strategy • Reduced need for additional coders in dual coding or double-coding scenarios • Ramp up of clinical documentation content so notes have supporting detail for the new more detailed codes • Coders will code exclusively in ICD-10 while their billing system will be able to maintain both codes sets, and generate claims in ICD-9 53

HIM Solutions Strategy Key HIM-driven solutions having significant ICD-10 operational implications: • Computer-Assisted Coding (CAC) • Coding suite (encoder, groupers, abstracting, etc. ) • Clinical Documentation Improvement (CDI) • Historically separate, these solutions are rapidly converging, with bundling being a clear market direction 54 CODING SUITE CDI CAC INTEGRATED CODING

Coder Education & Retention Plan • e. Learning tool is not enough • ICD-10 procedural coding can be difficult and challenging v. Low productivity • Not all coders will agree on final codes during dual coding practice • Encoder may take coder down wrong path to incorrect code • CAC too new for ICD-10 • Bonus Plan (include coder proficiency assessments ) 55

Clinical Documentation Improvement • Strong CDI program will ease the transition • A mature program will: v. Reduce the stress on staff and providers v. Mitigate risk of poor audit outcomes v. Easily implement identified improvement needs • Strengthen a weak program • If no current program, start now • An increased focus on clinical documentation content and physician education will generate most accurate codes 56

Clinical Documentation Enhancement Considerations • Develop new and/or refresh current templates, smart sets, and queries to include ICD 10 documentation requirements • CDI expansion to other payers • CAC vendors integrated CDI workflow into software 57

Physician Education • EMR template and smart sets v. Refresh/enhancement v. Develop new • e. Learning Tool • Specialty education • Podcasts • Lunch and learn with their office staff • Intranet (ICD-10 Corner) 58

Keys To Readiness 59

October 1, 2015 No Longer a Scary Date IF: • Ready by September 2015 • Coders have already traversed the learning curve with early adoption • Ample ICD-10 SMEs in-house • Physicians educated and providing appropriate and sufficient documentation • Physicians educated on pertinent ICD-10 codes • Systems and reports tested and ready 60

October 1, 2015 No Longer a Scary Date Benefits: • With early adoption, will have 3 -4 months of valid ICD-10 coded accounts prior to compliance date • Accounts Receivable minimally impacted • Anticipate fewer denials from day 1 61

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ICD-10 Resources • www. himss. org – ICD-10 Playbook; Articles, free Podcasts • www. aapc. org – ICD-10 Education & Articles for Physicinans & Coders • www. ahima. org – ICD-10 Coding Articles; Coder Education programs; and. Implementation Tool Kit • www. ama. org – ICD-10 Coding Articles and Info for Physicians 63

ICD-10 Resources • NCHS –Basic ICD-10 -CM Information http: //www. cdc. gov/nchs/about/otheract/icd 9/abticd 10. htm • CMS –ICD-10 -PCS Information http: //www. cms. hhs. gov/ICD 10/02_ICD-10 -PCS. asp • AHIMA -ICD-10 Education http: //www. ahima. org/icd 10/index. asp • WEDI –ICD-10 Implementation http: //www. wedi. org 64

CONTACT INFORMATION Elaine Lips, RHIA President & CEO elaine. lips@elipsehealth. com www. elipsehealth. com Phone: 310. 820. 3592 65

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