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What it means to YOU, your PRACTICE and your BOTTOM LINE!

Donna Lyles Basden, BSN, MHA and Krystal J. Miller 2011 SCMGMA Insurance and Legislative Forum May 19, 2011

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42 physician practices and growing More than 50 locations across Lexington County and Midlands 6 Community Medical Centers >200 Employed Physicians >50 Mid-Level Providers More than 850K patient visits in FY10 Expect more than 1M visits this year 414 bed Acute Care Facility 388 bed Skilled Nursing Facility 2 Ambulatory Surgery Centers


Understand the fundamentals of ICD-10 and HIPAA 5010 What this means to:
You Your Practice Your Bottom Line

Industry today... Dynamically changing environment





HIPAA 4010





5010 Implementation

About 2,720,000 results (0.06 seconds)

About 2,190,000 results (0.13 seconds)

International Classification of Diseases 10th Revision

Clinical Modification diagnosis coding

Procedure Coding System inpatient procedure coding

Developed by the World Health Organization Replaces the ICD-9-CM volumes 1 & 2

Canada 2000

Sweden 1997 199

Germany 1998

Russia 1999

ran e 200

China 2002

Thailand 2007

Brazil 1998

South Afri a 1996

Australia 1998

Countries using ICD-10 CM

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Greater Specificity, Clinical Detail, and Complexity Provides Information for Clinical Decision Making and Outcomes Research Improved Evaluation of Quality, Safety and Value of Care Superior comparison of cost to specific medical conditions Allows international comparability

Prevent Medicare abuse and anti-fraud activities by accurately defining services and providing specific diagnosis and treatment information. Provide precision needed for a number of emerging uses such as pay-for-performance and bio-surveillance. Ensure more accurate payments for new procedures, fewer rejected claims, improved disease management, and harmonization of disease monitoring and reporting worldwide. Allow the US to compare its data with international data to track the incidence and spread of disease and treatment outcomes.

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This date was originally set for October 2010 The date has held steady since 2009 President Obama has confirmed that he plans to carry out the implementation of ICD-10 in 2013

14,000 Codes 3-5 Characters Alphanumeric Position 1 is alpha or numeric Positions 2 - 5 are numeric

68,000 Codes 3-7 Characters Alphanumeric Position 1 is alpha (a - z) Positions 2 and 3 are numeric Positions 4 7 are alpha or numeric All letters used except U Very specific improves the richness of the data

Only letters used are E and V Lacks detail difficult to analyze

Numeric or Alpha (E or V)



Etiology, Anatomic Site, Manifestation

3 5 Characters

Alpha (Except U)

Characters 2-7 are Alpha or Numeric

Additional Characters


7th Character (Added extension for obstetrics, injuries, and external causes of injury)

Etiology, Anatomic Site, Severity

3 7 Characters

Diabetes codes are expanded to include the classification of the diabetes and the manifestation.
 EO8.22 Diabetes mellitus due to an underlying condition with diabetic chronic kidney disease  E09.52 Drug or chemical induced diabetes mellitus with diabetic peripheral angiopathy with gangrene  E10.11 Type 1 diabetes with ketoacidosis with coma  E11.41 Type 2 diabetes with diabetic mononeuropathy

The Centers for Medicare and Medicaid Services (CMS) has announced that the last regular annual update to both ICD-9 and ICD-10 code sets will occur on October 1st, 2011. Limited updates will occur on October 1st, 2012 to capture new technology and new diseases. There will be no updates to ICD-9 or ICD-10 on October 1st, 2013. Regular updates to ICD-10 will begin on October 1st, 2014.

Health Information Portability and Accountability Act (HIPAA) of 1996

a.k.a. Kassebaum-Kennedy Act

Expand healthcare coverage for patients who lost/changed jobs OR have pre-existing conditions Improve accountability through administrative simplification



Administrative Simplification

Medical Savings Accounts

Group Health Plan Provisions

Revenue Offset Provision









Original healthcare transaction version of HIPAA Required to be used by all HIPAA covered entities by 10/16/2003 Established the Format for electronic data interchange

NEW healthcare transaction version of HIPAA Required as a result of Dept of Health and Human (HHS) final rules published on 1/16/2009 Required to be used by 1/1/2012 Standardizes the content


Anesthesia Billing
Under 4010, anesthesia services can be reported either using base units or minutesoften depending on payer preference
x 4010 established where this information is reported

Under 5010, all anesthesia services must be reported in minutes

x 5010 defines what is reported

Now what is reported will be as uniform as how it is reported

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Claims Submission (Primary/Secondary) Referral Authorization Eligibility Verification Electronic Remittance Advice (Payments) Premium Payments Enrollments

Patient Information

Eligibility Inquiry (270) Eligibility Response (271)

Patient/Subscriber Information Premium Payment

Enrollment (834)

Plan Sponsor
Subscriber Information Premium Payment

Review Request (278)

Premium (820)

Prior Authorization Referral

Review Response (278)

Prior Authorization Referral

Claim Encounter

Claim(837) Remit(835) Claim Status Inquiry (276) Status Response (277) Extra Info Request (277) Claim Attach (275)

Claim Encounter

Claim Status

Claim Status

Sending physical address for billing provider

P.O. Box address cannot be used for the billing provider P.O. box may be used for pay-to address

9 Digit-Zip code required for billing provider and pay-to addresses NDC billing for Medicaid rebate program
Only 1 NDC per service line: 4010 allowed for multiples

Using same subpart NPI in billing provider for same claim to all payers
Involve your Provider Enrollment department now Review current NPI subpart enumeration to find cases where an NPI is only used with one payer Either work with payer to find a way to stop using this NPI or else inform other payers of that NPI and its associated address

Subscriber and Patient Data

Patient should be sent as subscriber when a plan assigns a unique identifier to the dependent vs. policy holder Revised subscriber/patient relationship to coincide with information returned in an eligibility response

Are identifiers consistent across the board for the trading partner, or does it vary by health plan? When plans vary, how will your billing system handle?

Pre-requisite to ICD-10
Technical enabler of ICD-10 codes in Electronic Transactions Law dictates 5010 be implemented 21 months before ICD-10 compliance date

January 1, 2010
Internal Testing Begins

January 1, 2012
5010 Required All Covered Entities*






January 16, 2009

Final Rule Published

January 1, 2011
External 5010 Testing Medicare & Medicaid accepting 5010 Claims
*Small Health Plans have until 1/1/2013 to submit 5010

General Equivalency Mappings

Tool from CMS* created to assist in the conversion Gives all plausible translation alternatives for the complete meaning of the code being looked up (source system code) Facilitates large database conversions based on ICD-9

ICD-10 code to single ICD-9 code

S72031A Displaced midcervical fracture of right femur, initial encounter for closed fracture To 820.02 Fracture of midcervical section of femur, closed

Single ICD-9 likely has many ICD-10 alternatives There may be multiple translation alternatives for a source system code, all of which are equally plausible

942.23 Blisters with epidermal loss due to burn (second degree) of abdominal wall

T2122xA Burn of second degree of abdominal wall, initial encounter T2122xD Burn of second degree of abdominal wall, subsequent encounter T2162xA Corrosion of second degree abdominal wall, initial encounter T2162xD Corrosion of second degree abdominal wall, subsequent encounter

Available to anyone/organization that uses coded data:

Payers Providers Medical researchers Informatics professionals Coding professionalsto convert large data sets Software vendorsto use within their own products Organizationsto make mappings that suit their internal purposes or that are based on their own historical data

Probably not.. May be helpful in converting practice paper super-bills or encounter forms to ICD-10

Eliminate need for Coding Staff and Providers to learn ICD-10 CM /ICD-10 PCS

NOTE: Maps should not be used for coding medical records

The Perfect Storm of 1991

The Healthcare Perfect Storm


Physician Shortages

Healthcare Reform



` Educate

yourself ` Obtain buy in ` Create your task force ` Set a timeline ` Assess systems impact ` Develop budget

` Change

Agent Management

Determine who will help lead and transition the team to ICD-10

` Change ` The

Evaluate change and make adjustments as needed.

Human Factor





Info Systems





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Documentation will play a key role in ICD-10 An ICD-10 code could not be produced from most of the documentation in todays medical chart. This is due to a lack of detail and specificity. Medical Providers will find that this is the area in which they are most affected. Education is going to need to be extensive and needs to begin now.

Compliance and transition planning starts with you


Understand what your organization is doing to prepare and comply with this transition Promote understanding and accountability in your practice

Which health care transactions are used in your practice

Eligibility (270/271) ERA (Electronic Remit) 835 Claim Status Inquiry/Response (276/277)

Where are they used?

Registration Referrals Back-office/AR staff

Patient Information

Eligibility Inquiry (270) Eligibility Response (271)

Patient/Subscriber Information Premium Payment

Enrollment (834)

Plan Sponsor
Subscriber Information Premium Payment

Review Request (278)

Premium (820)

Prior Authorization Referral

Review Response (278)

Prior Authorization Referral

Claim Encounter

Claim(837) Remit(835) Claim Status Inquiry (276) Status Response (277) Extra Info Request (277) Claim Attach (275)

Claim Encounter

Claim Status

Claim Status

Successfully managing any significant change starts with clear communication among stakeholders Identify the stakeholders in your practice
Providers AR/Billing Staff Coders

Establish regular communication forums to inform staff/Providers of 5010/ICD-10 compliance activities

If you havent started yet.. Go back and share with them what you learned today! Minimize fear of change and fear from rumors

Be Creative!

Talk about the basics structural changes ICD-9 to ICD-10 Talk about how HIPAA 5010 and ICD-10 fit in the bigger picture of what is happening in the health care industry
Electronic Health Records Health information exchange Greater demand for external quality reporting

Your responsibilities are broader as you need to ensure direct communication with these payers and ensure your processes and transactions are compliant

Are you being proactive in trying to establish a tentative testing and migration schedule with the payers?

Though you have a more central point of contact for transaction compliance

Do you know when your clearinghouse will deliver the initial software update? Do you know when your clearinghouse will be able to test with each payer and thereafter deliver the various edit masters for the claim scrubber?

What steps does your practice need to take to coordinate with the clearinghouse? Is individual testing between the practice and clearinghouse required? What is their timeline?

All HIT vendors:

Practice Management Systems Clearinghouse solutions Eligibility vendors

Every vendor involved with Claims, ERA, eligibility, premium payments, referral authorization, or plan enrollment Practices need to ensure these vendors are ready..

Identify systems in use in your practice that store or send ICD codes Contact your vendors
Practice Management and EHR software vendor Clearinghouse and Billing Service Partners Other IT vendors whose products intersect with ICD codes and are in use in your practice


Some vendors may have difficulty complying

Practice needs and Vendor expectations may not be the same

Custom Reports and Interface Changes need to be identified by the Practice

Vendor Schedules may not be aligned with Practice

Ultimately it is YOUR responsibility not the Vendors to comply

When was your last Practice Management software upgrade? What will it take to get to the latest release (compliant release)? If you use a combined Practice Management/EHR how will the upgrades for compliance impact charge passing, documentation?

Start NOW!
Awareness! Documentation specificity wont happen overnight Connect ICD-10 compliance and enhanced documentation needs with EHR

Coding Staff
End of 2012into 2013

Insurance Follow-up and Denial Management

x Intensify oversight of payments x Assess whether adjudication has properly occurred based on ICD-10 vs. 1CD-9 diagnoses x Follow-up with Payers x Educating Provider Relations staff

Greater standardization of claims data Should ease the process of filing claims electronically to all payers thus increase the number of claims that are filed electronically More electronic secondary claim billing possible due to better data from 835, improved instructions, elimination of unnecessary fields

Standardization of Electronic Remittance data (ERA) should increase the success rate for automatic posting
Practice Benefit
x Reduction in payment posting costs x Improve patient balance billing x Improve secondary claim filing success rate

Enhanced EDI Eligibility Inquiry and Response

Must be prepared to use Version 5010 transaction standards by January 1, 2012 Must be ready to accept ICD-10 codes for claims with dates of service beginning October 1, 2013, or inpatient claims with dates of discharge on and after October 1st 2013

Talk to your payers and clearinghouses about what they are doing to prepare for the ICD-10 transition. Take advantage of training sessions and educational materials provided. Work with your payers and clearinghouses to test the submission of ICD-10 claims prior to October 1st, 2013.

During the transition staff will have to work with both ICD-9 and ICD-10 simultaneously Forecast an increase in the number of denials and the time spent to work them due to the unfamiliarity Productivity loss CMS projects an additional two minutes will be needed for each encounter

Medical Practice Size 1-2 Physician Group 3-5 Physician Group 6-10 Physician Group 11-20 Physician Group 21 + Physician Group

Cost of Implementation $2,000 - $8,000 $5,000 - $10,000 $10,000 - $20,000 $20,000 - $40,000 $50,000 - $100,000
Information provided by HayGroup White Paper by Thomas Wildsmith

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Staff Education and Training System Modifications Implementation Team Superbill Changes Increased Documentation Costs Cash Flow Disruption Communication Supportive Resources Loss of Revenue Contingency Reserves
Information provided by HIMSS

A transition budget will be needed

This normally includes a 10% contingency and a 5% 20% reserve budget

Contingency funding will be needed due to the loss of revenue and productivity Gather estimates from all associated vendors and contractors Keep the necessary changes to health information in mind

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Assign a resource to manage the budget Review the budget vs. expenses monthly with your steering committee Consolidate the budget plan across the organization Plan for failures or loss in revenue

1. Organize the Implementation Effort 2. Develop Communication Plan 3. Conduct Impact Analysis 4. Organize Cross Functional Efforts 5. Contact System Vendors 6. Estimate Budget 7. Internal System Design and Development 8. Development of the Training Plan 9. Implementation Planning 10. Phase 1 Training 11. Business Process Analysis 12. Education and Training, Phase II 13. Policy Change Development 14. Outcomes Measurement 15. Deployment of Code by Vendors to Customers 16. Implementation
Information provided by the AAPC

Phase 1 Impact Assessment

Establish a implementation planning team Identify key tasks, goals, and objectives Determine what information systems will be affected Budget for information system (IS) changes, education, staffing, and decreased cash flow

Phase 2 Overall Implementation

Implementation of required IS changes Follow-up assessment of documentation practices Increasing the education of the practices coding professionals Update Encounter Forms / Superbills Complete any items carried over from Phase 1
Information provided by AHIMA

Phase 3 Go Live Preparation

Finalization of systems changes Testing of claims transactions with payers Intensive education of coding professionals Monitor coding accuracy and reimbursement with prospective payment systems results Complete any items carried over from Phase 2

Phase 4 Post-Implementation
Monitor coding accuracy for reimbursement Monitor for any other data management impact Monitor coding productivity Continue with appropriate coding professional training
Information provided by AHIMA

Build your goals around these areas and keep your focus!
Validate your Practice Management and billing systems are ready to handle 5010/ICD-10 Maintain coding productivity and accuracy Reduce claims rejections and denials Monitor proper claims payment Improve strategic decision making based on more detailed data

CMS reiterates it will not allow healthcare organizations a grace period after the compliance deadline----Healthcare IT News-Mar 23, 2010-National Provider Conference Call

ICD-10 CM Complete Code List

Centers for Medicare and Medicaid Services ICD-10-PCS

5010 Timeline Tools (PDF and Project)

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This information does not constitute legal advice nor is it promoted as an exhaustive presentation of these topics. This is a professional sharing of our research intended for educational purposes only. Please note unless otherwise credited, our graphics are our own, adapted from various sources and fundamental concepts.