Claim Denial Rates Stay Relatively Level with ICD-10 Implementation!

Claim Denial Rates Stay Relatively Level with ICD-10 Implementation!

The day before the ICD-10 implementation officially launched on October 1st, 2015 and became the new basis for medical documentation, the upcoming transition was reportedly generating severe physician trepidation about the possibility of payment delay. According to a SERMO  poll, 91% of physicians expected that payment delays would be in their future, especially after the ICD-10 grace period. Moreover, 67% of over 300 physicians responding to the SERMO poll reported that, in order to prepare for ICD-10 payment delays, they had taken out a line of credit.

Similarly, one month after the official launch, Barbie Hays, coding and compliance strategist for the American Academy of Family Physicians (AAFP), noted that “physicians (were) taking an extra two or three minutes per patient (for paperwork) since the transition.”    The fact that two or three minutes per patient adds up quickly, an hour to an hour and a half at the end of the day, is not something easily overlooked and 86% of physicians confirmed that ICD-10 diverted their attention away from patient care.  All of which leads to two bedrock issues that seemingly surrounded the early days of ICD-10 implementation, money and time.  One anxiety causing topic for healthcare administrative staff, prior the rollout, centered on productivity. Forty-eight percent of respondents to a November 2015 survey moved this issue to a top concern over revenue and cash flow disruption, whereas, an earlier survey had named productivity as a lesser worry.

Now fast forward – six months into the implementation – for an update on ICD-10 implementation and we find pretty good news!  Specifically in a March 21st, 2016 article by Jim Daley, ICD-10: What Did or Didn’t Work? WEDI Survey Underway  that states “ICD-10 marked one of the most significant large-scale changes ever attempted within the healthcare industry, and yet it seemed to go off without significant problems.  There were some smaller issues, but by and large it has been labeled a “non-event,” much like Y2K.”  Other surveys, notably one by Porter Research and Navicure, from February 2016 showed that of all the healthcare organizations surveyed, 60% reported that there had been no impact on their monthly income after October 1st, 2015.  However, the same survey reported that at least one-third of the participants saw a 20% decrease in revenue during the same period.

In general, it was the larger healthcare organizations that reported no major issues, and a further look into the numbers revealed that it was the small provider, the individual practices, which were especially affected by the rollout.   This can be attributed to two situations:  1) smaller resources to work with as they implement the new coding system, 2) less monetary resources to deal with delayed payments and denials due to coding problems.

The time issue and with it productivity, will work itself out as administrative staff, physicians and healthcare practitioners become familiar with the coding adjustments. In fact, in a January 2016 article, which examines the post ICE-10 landscape, Jacqueline DiChiara writes that 360 healthcare organizations confirmed they have experienced either negligible or no staff productivity impact following ICD-10 implementation.  It seems that the majority of productivity issues are related to the granularity of the ICD-10 codes requiring further information than the ICD-9 code and this is an issue that only time can help.

So it appears that the revenue cycle will remain as a focus of the post ICD-10 implementation. With claim denial rates seemingly in the clear, and per a key finding of Porter Research and Navicure’s fifth survey, remaining the same for 45% of respondents, proactive healthcare organizations planned to focus their efforts on improved patient collections, including enhancing patient price estimation efforts and developing robust denial management processes. Their 2016 priorities center not only on overall healthcare revenue cycle management, but also working towards a value-based care model (15%), followed by updating and automating patient collections strategies (9%).

One potential area that medical groups and small providers should keep an eye on, according to the Medical Group Management Association (MGMA), involves patient screenings. “Practices in many cases have correctly coded these claims, yet some Medicare Advantage Contractors (MACs) have rejected them,” said Robert M. Tennant, director of health information technology policy with MGMA.  Tennant went on to say that “most of the claims payment issues have had to do with faulty local coverage determination system edits and, for the most part, the MACs have been responsive in fixing the problems.”

All in all, despite the many apocalyptic forecasts regarding the ICD-10 implementation, for healthcare entities and the U.S., the ICD-10 rollout progressed much better than earlier surveys indicated. To this point, in a February press release, RelayHealth Financial announced that out of 262 million medical claims, only about 1.6% had been denied. The report analyzed claims data that encompassed $810 billion. According to RelayHealth Financial, this denial rate has not changed since November 2015 and it represents a total of $12.9 billion in denied reimbursement since the implementation date on October 1st, 2015.

Now with the pre ICD-10 trepidation allayed, there are benefits that we can look forward to, such as better data that will allow organizations to make improved health comparisons across the world and according to Thomas Gordon, the chief executive officer of the American Health Information Management Association, ICD-10 “will be good for improving quality and population health, as well as driving down health-care costs.”

Tennant, goes on to say that medical practices and healthcare organizations can take several steps to ensure that claims are processed using the correct codes and thus ensure that denials, certainly the bane of any organization, are held to a minimum.

    • Make sure your electronic health record technology is in line with ICD-10
    • Have ongoing educational programs for staff and healthcare professionals
    • Review pending and denied claims for coding issues
    • Conduct organizational audits to ensure that everyone concerned is capturing the necessary documentation and selecting the correct codes

All of which will make sure you are ready for the inevitable updates that are coming. In fact, the ICD-10 implementation has been deemed such a success that the moratorium on new diagnosis codes, put into place last year, has been lifted and the revised codes are available on the CMS website.   Contact us to learn more or for help in your practice.