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AHIMA Attendees Abuzz Over ICD-10 and RAC

Kathryn Mackenzie, for HealthLeaders Media, October 21, 2008

There were two topics on everyone's lips this year at the American Health Information Management Association's 80th annual meeting: the upcoming conversion from the ICD-9 code set to ICD-10 and the permanent launch of Medicare's Recovery Audit Contractor (RAC) Program.

The changes to the code set combined with the announcement earlier this month from the Centers for Medicare & Medicaid Services that it is moving ahead with the RAC program have left many in the industry nervous about just how much the changes will affect their practices.

On the big switch
During the four days of sessions held last week in Seattle, panelists from throughout the industry tried to give some insight and relief to attendees who are puzzled about how to handle the upcoming ICD-10 conversion. CMS acting administrator, Kerry Weems stressed that stakeholders need to "be serious about the date" of the conversion, emphasizing that providers should not wait until the eleventh hour to begin learning the more than 155,000 codes associated with ICD-10 (compared to 17,000 in ICD-9).

The proposed date for implementation of the rule is Oct. 1, 2011, however, a final deadline for conversion won't be set until the agency has a chance to review comment from the public (comments must be received by EOB October 21). Weems says though the comments are largely in favor of the conversion, the proposed implementation date remains the primary point of contention. And, though the government has been known to waffle on important deadlines in the past (I know, it's shocking), Linda Kloss, chief executive officer at AHIMA, told attendees the time to make the switch is … well, yesterday.

"We are a decade behind the rest of the world in this vital element of patient care and control, and that just is not acceptable," she says. While Kloss says AHIMA recognizes there will be significant costs associated with converting to ICD-10 (ranging from $83,200 for a small practice to as much as $2.73 million for a large practice, according to a new study), the longer we wait, the more extensive those costs are likely to be, since more systems will have to be converted retroactively. The general consensus from all of the speakers is to act as if the Oct. 1, 2011 deadline is set in stone and begin preparing now. Get hospital staff up to speed and learn the new codes, because the switch, whether it occurs in three years or five, will happen.

Like it or not, RAC is here to stay
After recovery audit contractors reported recovering $1 billion (the government actually netted about $700 million after appeals) in improper Medicare payments during CMS' three-year pilot program, the feds decided to make the RAC program permanent, striking more than a little fear in the hearts of hospital administrators across the nation. During an informal panel on Sunday, conference goers were given tips about how to handle the auditing process.

"If they are able to take one thing away from this panel, we hope it would be an understanding that 8% of the RAC revenues came from technical denials, which means that the hospital simply didn't get the medical records to the RAC in time. That is not acceptable, that information has got to get out. No matter how you handle it, internally or externally, you have to be able to get a hold of those records and get them out," says Nancy Hirschl, president, Hirschl and Associates and a participant in Sunday's panel.

Hirschl and the other panelists recommended five steps to help hospitals prepare for RAC auditors:

  1. Develop a RAC team dedicated solely to dealing with RAC inquiries.
  2. Conduct a risk assessment and perform data mining to identify what the RAC will be looking at (hint: they are looking for improper payments, says Hirschl). By identifying where you could potentially have problems, you can mitigate your risk now.
  3. Provide a financial reserve plan to your chief financial officer. "By letting them know what they will need to provide financially, you are one step closer to being prepared," Hirschl says.
  4. Perform a needs assessment to understand operationally how RAC will affect your day-to-day staff. Do you need to hire more people? Will you outsource? Have these procedures in place ahead of time.
  5. Understand and develop an internal strategy for how your organization will deal with disagreeing. Will you appeal every case?

And of course, take advantage of the technology available to you. There were plenty of vendors on hand this year offering a myriad of solutions for both ICD-10 and RAC.

Now that I'm home from AHIMA, sifting through my various press packets and session notes, I can see that the overall theme from this year's conference was that the next few years are going to be filled with change for healthcare—EHRs, PHRs, ramifications from next month's election, ICD-10 and RAC, genomics, and biometrics. It seems there is no end to the incredible (and sometimes trying) changes on the horizon for HIM and IT professionals.


Kathryn Mackenzie is technology editor of HealthLeaders magazine. She can be reached at kmackenzie@healthleadersmedia.com.
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