ICD-10 Conversion Takeaways for Health Plans

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Understand ICD-10’s effects on healthcare plans, and take steps to pave the way to a smooth conversion.

By Lanaya Sandberg, MBA, CPCO

The Centers for Medicare & Medicaid Services (CMS) is propelling the healthcare industry to adopt HIPAA 5010 transaction standards and the ICD-10 code set to leverage advancements in healthcare technology—namely, electronic healthcare records (EHR)—for the purpose of reducing government spending. These upgrades are also occurring because code categories are full, and ICD-9-CM codes do not always offer the desired specificity.

ICD-10 Value Proposition

The purpose of ICD-10 implementation is to improve clinical communication through precise documentation and comprehensive reporting of quality measures, advancing clinical quality outcomes. Health plans will benefit from the greater clinical communication and detail that ICD-10 codes offer. For example, health plan medical management departments may be able to more promptly identify members who should be enrolled in case management programs.

As the Oct. 1, 2014 compliance date approaches, recognize that the ICD-10 transition may affect health plans in several ways. If you are a healthcare plan, consider the following ICD-10 conversion takeaways:

Collaboration and Education

Collaborate with significant healthcare providers for testing purposes. As the ICD-10 conversion will require changes to your health plan system, configure and test well in advance of Oct. 1.

Create and distribute provider educational materials as soon as possible. To mitigate risks, work closely with major clearinghouses. You should also establish specific goals (e.g., foreseeable revenue and costs) related to your ICD-10 conversion strategy (and to which providers also can relate), and publically disseminate these goals.

Payment Accuracy

Although ICD-10 won’t transform provider reimbursement, it will facilitate reimbursement methodologies that more precisely reflect member status and care. Specifically, providers may experience:

  • Better discovery of fraud, waste, and abuse;
  • Improved coordination of care across the healthcare delivery continuum;
  • Better case management;
  • More transparent provider performance reporting; and
  • Improved patient centered medical home and pay-for-performance initiatives.
  • Systems Assessment

You should conduct a thorough analysis of all the health plan’s systems affected by the ICD-10 conversion. This may include claims adjudication systems and contract management software.

Recommended Steps

The following are suggested actions, in chronological order, for health plans to take in preparation for the ICD-10 conversion:

Provider Steps

  • Collaborate with providers.
  • Identify and escalate risks.
  • Develop provider contracting strategies.
  • Execute any necessary provider contract legal documents.
  • Conduct testing with providers.

Finance Steps

  • Conduct assessment of those providers affected by the ICD-10 transition.
  • Determine which providers will be impacted the most.
  • Ascertain diagnosis related group (DRG) changes.
  • Update financial modeling based on any new provider contracting executed documents.
  • Monitor financials after implementation on Oct. 1, 2014.

System Steps

  • Update all systems to be ICD-10 compliant.
  • Make applicable DRG changes.
  • Update contract management software.
  • Update systems for ICD-10 Medicare severity-DRG (MS-DRG) conversion project.

If you are interested in learning more about the ICD-10 conversion for health plans, visit CMS’ payer resources website.

Editor’s note: The views and opinions expressed in this article are those of the author and do not reflect the official policy or position of AAPC or any organization associated herein.

Lanaya Sandberg, MBA, CPCO, is chief of staff and head of strategy for a Medicaid managed care organization. She is a member of the Hartford, Conn., local chapter.

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Renee Dustman

Renee Dustman

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.
Renee Dustman

About Has 426 Posts

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.

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