Transcript ICD-10 Conversion and Quality - California Health Care Safety Net

ICD-10 Conversion and Quality
Presented November 10, 2010
Quality Leaders Forum
Presented by:
Seraphin Nicholson, MSE, MHSA
ICD Overview
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ICD-9 codes will be replaced
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ICD-9 is obsolete
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Current codes are 30 years old
Diagnosis coding systems and data structure will change
Federally mandated, conversion must occur by October 2013
Current codes do not reflect current medical knowledge or
advances in technology
Is running out of structural capacity
Inhibits the transition to interoperable health data exchange
U.S. is the only industrialized country not using ICD-10 codes
Scope of impact
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All healthcare settings and providers
All health plans and payors
All IT solutions using or storing diagnosis and procedure coding
Code Changes
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The ICD-10 code set is a full replacement of the ICD-9
code set. This new structure provides additional
granularity for diagnosis and inpatient procedure codes
and has a different structure:
# of Codes
ICD-9
ICD-10
Total codes
16,000
155,000
Diagnosis codes
13,000
68,000
Procedure codes
3,000
87,000
Structure
Change
ICD-9
ICD-10
Diagnosis
   . 
   .   
Procedures
  . 
   .   
Code Changes, cont.
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This new granularity offers greater specificity for
diagnoses and procedures.
For example, under ICD-9, 250.61 is a diabetes mellitus
patient, not states as controlled, with Type I neurological
complications.
Under ICD-10, this could be coded as:
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E10.40 Type I diabetes mellitus with diabetic neuropathy, unspecified
E10.41 Type I diabetes mellitus with diabetic mononeuropathy
E10.44 Type I diabetes mellitus with diabetic amyotrophy
E10.49 Type I diabetes mellitus with other diabetic neurologic
complications
Financial Impacts of Code Changes
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Hospital revenue may significantly be impacted by code
changes
For example:
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ICD-9 code 31.99 “Other operations on trachea” currently
groups to DRG 168 “Other respiratory systems O.R.
procedures w/o cc/mcc” with CMS weight 1.3026 and pays
$6,513
ICD-10 0B717DZ “Dilation of trachea with intraluminal device
via natural or artificial opening” will group to MS-DRG v26.0
“Major Chest Procedures w/o cc/mcc” with CMS weight
1.7662 and pays $8,831
Provider & Staff Impact
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Provider impact
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New framework of thinking about disease states
More details need to be documented in chart
Massive expansion of categories to be familiar with
Hospital-based support personnel
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Coders: new scheme, increased information needed to code
validly
Finance & billing office: new scheme, payor conversion
problems and disparities, overlap during aging of old scheme,
new fee schedules and financial models
Health IT: support of new data formats, handling of old data
and reports, legacy systems that will not convert
Consequences
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Some consequences of ICD-10 conversion include:
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Decreased coding productivity
Increased provider queries
Increased delays in reimbursement
Discontinuity in data structures will impact related analytics,
trending and associated decision-making
Revenue cycle performance will likely:
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Increase in unbilled receivables
Increase in accounts receivables
Slowed and/or reduced cash flows
Long Term Value & Benefit
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Public Health
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Research
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Better data for mining and improving predictive accuracy
Health Reform
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Better disease epidemiology information including signs and
symptoms, risk factors and co-morbidities
Supports pay for performance
Supports determination of episodes of care and high risk pool
patients
Reimbursement
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Reimbursement based upon complexity and outcome
ICD-10 & Quality
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Improved Quality Measurement
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Data availability for quality metrics, patient safety and
compliance
Clinically robust pathways can be based upon detailed codes
ICD codes used for measuring quality
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HealthGrades, AHRQ, NCQA are just a few of the many
organizations that use ICD codes
Increased granularity in ICD-10 codes will help payors and
providers more easily identify patients in need of disease
management and more effectively tailor disease management
programs
ICD-10 & Quality, cont.
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Organizational Monitoring and Performance
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ICD-10 offers providers and payors better data in support of
their efforts to improve performance, create efficiencies and
contain costs
RAND believes the coding error rates will be less than what is
currently experienced under ICD-9-CM codes because of the
improved logic and standardized definitions of ICD-10-PCS and
the more accurate clinical terms in ICD-10-CM1
Increased code specificity will:
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Make it easier to compare reported codes with clinical
documentation
Check for consistency between diagnosis and procedure codes
Check for illogical combinations of diagnoses
1RAND
Corporation. “The Costs and Benefits of Moving to the ICD-10 Code Sets.”
ICD-10 & Quality, cont.
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Replacing ICD-9-CM with ICD-10-CM and ICD-10-PCS will provide
higher-quality information for measuring healthcare service quality, safety,
and efficacy. This will in turn provide better data for:
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Quality measurement and medical error reduction (patient safety)
Outcomes measurement
Clinical research
Clinical, financial, and administrative performance measurement
Health policy planning
Operational and strategic planning and healthcare delivery systems design
Payment systems design and claims processing
Reporting on use and effects of new medical technology
Provider profiling
Refinements to current reimbursement systems, such as severity-adjusted DRG
systems
Pay-for-performance programs
Public health and bioterrorism monitoring
Managing care and disease processes
Educating consumers on costs and outcomes of treatment options
ICD-10 & Quality, cont.
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Moving to the new code sets will also permit improved
efficiencies and lower administrative costs due to replacement
of a dysfunctional classification system. This in turn allows:
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Increased use of automated tools to facilitate the coding process
Decreased claims submission or claims adjudication costs
Fewer rejected and improper reimbursement claims
Greater interoperability
Decreased need for manual review of health records to meet the
information needs of payers, researchers, and other data mining
purposes
Decreased need for large research organizations to maintain dual
classification systems (one for reimbursement and one for research)
Reduced coding errors
Reduced labor costs and increased productivity
Increased ability to prevent and detect healthcare fraud and abuse
ICD-10 & Quality, cont.
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In a 2004 cost/benefit analysis for the Department of
Health and Human Services, the RAND Corporation
quantified some of the benefits of improved data derived
from ICD-10-CM and ICD-10-PCS. RAND concluded
that the benefits far outweigh the costs of
implementation, estimating the dollar value of the benefits
in the following categories:
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More accurate payment for new procedures
Fewer rejected claims
Fewer fraudulent claims
Better understanding of new procedures
Improved disease management2
2RAND
Corporation. “The Costs and Benefits of Moving to the ICD-10 Code Sets.” March 2004. Available online
atwww.rand.org/pubs/technical_reports/2004/RAND_TR132.pdf
Compliance
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HIPAA 5010 Transaction Sets
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Required to enable transition to ICD-10
Effective date 1/1/2012
Based on transaction date, not date of service
ICD-10
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Effective date 10/13/2012
Based on date of service (all OP settings) and discharge date
(all IP settings)
Meaningful Use & ICD-10 Relationship
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Must pursue HIPAA 5010/ICD-10 at the same time as
EMR adoption to receive meaningful use incentive
payments
Meaningful Use Stage 1 Criteria:
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Maintain an up-to-date problem list of current and active
diagnoses based on ICD-9-CM or SNOMED CT
The Office of the National Coordinator (ONC) under
HHS has stated that later criteria will require utilizing
ICD-10 or SNOMED CT for problem list documentation.
Bottomline
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The rule is final and HHS does not intend to delay the
compliance date
Health Reform and ARRA-HITECH legislation both
strengthen the need for ICD-10
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Meaningful use criteria
Administrative simplification provision in health reform
Noncompliance will jeopardize reimbursements
and critical business and clinical operations
Questions?
Seraphin Nicholson
[email protected]
510-874-7221