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Mapping Out Revenue-Cycle Solutions

 |  By kminich-pourshadi@healthleadersmedia.com  
   May 22, 2012

This article appears in the May 2012 issue of HealthLeaders magazine.

The payer and provider communities are still dealing with HIPAA 5010, and trying to shift attention to ICD-10 is tough," says Craig Collins, division chair for revenue cycle and administrative lead of the ICD-10 transition at the Rochester, Minn.–based Mayo Clinic. "We put together a strategic plan and process map because we're trying to be first to the plate to do the ICD-10 testing with the payers. Our hope is that in early 2013 we can begin testing with larger payers."

The Mayo Clinic, like many other healthcare organizations, is making strides to prepare for the largest overhaul of healthcare codes in the past 30 years. The process—regardless of Health and Human Services' decision to extend the ICD-10 transition deadline to October 2014—includes a process map of the revenue cycle in the hopes of keeping this project revenue neutral.

Although the code set change is intended to be revenue neutral, ICD-10 includes more than 155,000 codes, a significant expansion from the current 17,000 codes in ICD-9. The transition touches nearly every member of a hospital or health system: physicians, clinicians, coders, IT, HIM, and finance. The mandated coding expansion influences documentation, productivity, contracts and business processes, HIM, practice management, budgets, payment conversions, claims edits, and disease and utilization management.

ICD-10 is expected to have significant impact on the revenue cycle. Nearly half of healthcare leaders (46%) expect to lose money while shifting to the new system, according to the July 2011 HealthLeaders Media Intelligence Report, ICD-10 Puts Revenue at Risk. An important step to avoid revenue hits is completing a process map that digs into the effect the transition will have on the revenue cycle.

The process map is work flow plan driven by multiple repositionable notes created to give an accurate picture of all the activities connected to the current and future processes at an organization. It is a full structural analysis of how all processes flow and connect to each other. The map can show gaps in specific areas that are preventing optimal performance or, in the case of ICD-10, areas that will require special attention to prevent an impact on the organization's revenue.

With some 212 IT systems and 80 geographical sites across Minnesota, Arizona, and Florida that include physician practices and several hospitals, the Mayo Clinic finds the process map to be essential for a successful ICD-10 conversion—and that starts with the right team and clear accountability.

Mayo's core team consists of Collins; Jan Graner, administrator of operations for the ICD-10 conversion; and Jeff Thompson, MD, physician lead for the entire Mayo Clinic system.

"When we started to develop the ICD-10 project, we didn't look at it as a revenue-cycle project," Collins explains. "We looked at how it would affect providers and the way they document things and how it would change the work flow, then we looked at how it would impact the revenue cycle. That's the reason why Jan and Dr. Thompson joined the team—they own the practice side."

Getting early physician engagement in the process is essential, the Mayo team says, not only to guide the documentation process, but also to ensure all systems are included.

"If you operate in a black box, you don't know what work is being done and who is doing it and you'll miss something. Physician leadership needs to be a part of this from the beginning. Our team developed an intricate spreadsheet that lists the readiness of systems, what needs to happen next, who's in charge, which systems are vendor areas, and which are homegrown. The physician leadership can look at this sheet and see that the systems are cataloged correctly and where these systems are in the transition process," says Thompson.

Though the trio makes up the core of the ICD-10 transition team, membership fluctuates as colleagues from various departments are called on for guidance. For instance, Graner explains during work flow process mapping that the team called on front office personnel to review the patient access process and explain the daily work flow. And, Collins notes, with such an expansive system to track, having that input is essential to get at the core of what is being done and what equipment and systems are being used. Moreover by process mapping departments with technologies that will be affected by ICD-10, such as the front office, the transition team can assess the potential impact on the revenue cycle if updated technology and training aren't completed in a timely fashion.

Similar to the transition at Mayo Clinic, at the 435-licensed bed South Nassau Communities Hospital, Mark Bogen, senior vice president and CFO for the Oceanside, N.Y.–based organization, says process mapping the revenue cycle for ICD-10 took input from across the organization. Like Mayo, SNCH began its process map journey not by looking at the revenue cycle but by looking at how ICD-10 would affect staff and the need for training. Bogen, along with Richard Rosenhagen, the assistant vice president of EMR, HIM, and the clinical documentation improvement program, and Colleen Garvey, the director of HIM and chair of the ICD-10 steering committee, assembled an organizationwide team to look at the impact of the transition.

"Training was our big concern," says Rosenhagen. "We wanted to know how many people would need training, how to roll that training out, and whether we should do it ourselves or bring in a vendor whose primary purpose was training."

With that goal in mind, the steering committee included financial and patient service groups, members of the revenue cycle, billing, HIM, clinical documentation improvement program and information services, human resources, and the medical staff. Ultimately, the team's mapping process took the committee into the revenue cycle.

"You have to identify all systems that use coding for statistical purposes and any data analysis behind the scenes. We need to know if anyone is using coding in the background because that needs to be ready, too," explains Garvey. For instance, the operating room booking may be collecting ICD-9 codes when booking surgical procedures. Organizations should recognize all potential diagnoses collection areas, she says.

As SNCH created its map by analyzing work flow, Garvey says committee members would look at the developing list of systems and continually add to it. "Once we had all the systems listed, then we identified all the South Nassau staff that touches coding and billing and created a master file of who does what, so now we can determine how to train everyone."

Rich Rogers, senior vice president of support services and CIO at Health First in Brevard County, Fla., agrees that it takes an organizationwide team approach to tackle such a transition. Like SNCH and Mayo, Health First, a four-hospital system, first looked at this transition not in terms of the larger revenue-cycle impact but in terms of documentation gaps.

Rogers, who was given ownership of the project, created a 15-member executive steering team of revenue cycle, HIM, clinical documentation, and patient business services to scrutinize the work-flow processes influencing documentation. As the organization had done a general revenue-cycle map recently, it was a matter of refining that process map to look at ICD-10. It took just three months to complete, and the analysis concentrated on how the 70 systems across the four hospitals that feed in to the revenue cycle would be affected.

"We did a vendor readiness analysis to decide which systems to upgrade, at which time, and how many resources to allocate," Rogers explains. "So once we pulled together our team we had IT send formal letters to our vendors so we could understand and document the vendor's strategies. We created a list so we'd know internally what system was tracking to which area."

Process mapping led SNCH down a similar path, says Bogen. The potential financial impact of this transition meant not only documenting the potential productivity losses on the hospital side, but also understanding the problems that could result from the payers not being ready.

"We have to know what this means in terms of the potential for productivity losses. How much longer will it take to get through the same caseload and get claims out the door? We looked at whether we'd need to add staff, how we could retrain existing staff, the potential for staff to retire due to ICD-10, and all the costs associated with these," says Bogen.

SNCH assessed that the organization would need to increase staffing in the coding and validation areas by at least 25% in the first year of ICD-10 activation due to the longer time it is expected to take reviewing the charts (even in an EMR environment). However it's the payers, Bogen notes, that are a bit of a wildcard in the financial assessment of the ICD-10 transition. He believes that on the payer side the transition will add at least five to seven days to the average days in A/R, which at $1 million a day in 2012 means a hit to cash flow of at least $5 million to $7 million.

"This may be an optimistic estimate based on the payer community performance on the recent switchover under 5010," Bogen says. "Anytime managed care can demonstrate that something is out of their control you are going to have delays. They may not pay claims, or [may] pay them incorrectly and then have to adjust a payment at a future point; so the financial cost isn't easy to estimate."

Health First may have an idea on how to change that, however. Rogers says process mapping his organization, which took more than six months to complete, revealed a possible gap and opportunity with his payers in terms of readiness.

"We found it's important to have the dialogue with the payers because they will require much more information, too. By knowing what they need now, we are able to get our team better prepared. You have to get this information and start the reeducation of the clinical folks, the coders, and documenters," says Rogers.

Although the government bills the ICD-10 transition as a "revenue neutral" undertaking, the addition of so many new codes can offer hospitals a revenue-making opportunity. Hospitals and health systems that have been coding incorrectly on ICD-9 can potentially reclaim missed revenue.

"The devil is in the details and you have to map it to ensure you have the right processes in place and to be sure you'll be documenting and capturing all the information that's needed. I have difficulty suggesting that there will be a minimal impact to millions of dollars because there's so much risk in the process. … The underlying need from this documentation is to enhance the processes in place to be sure that money doesn't dribble out," says Bogen.

The subtle revenue leak from an underdocumented record in ICD-9 could swiftly turn into a revenue gush after ICD-10, and that's exactly what concerns organizations such as the Mayo Clinic. Its process map focused on clinical documentation gaps and found it could be improved for the ICD-10 transition.

Mayo adjusted its ongoing training to target how the physicians document. The organization uses the physician's existing documentation under ICD-9 and provides comparative feedback on how to adjust the documentation to meet the ICD-10 guidelines.

"It's important to get the training going well in advance," Thompson explains. "Giving them the feedback for the future so they can start adding the documentation now helps make it so ICD-10 doesn't affect billing and it gets the physicians up to speed before it starts affecting revenue."

To know how extensive the training will need to be however, hospitals and health systems have to first know how deeply the documentation challenges run. Health First's process map showed that charge capture was inconsistent in the organization, affecting the case mix being reported. In preparation for the upcoming transition, Rogers says the organization made an investment in computer-assisted coding software. "We think it will offset some of the losses we anticipate will occur from increased denials and documentation deficiencies," he says.

As with Health First and the Mayo Clinic, SNCH found that its map put a spotlight on existing documentation challenges that needed correcting. "From my vantage point … ICD-10 continues to heighten our concerns about areas we've been having issues with for ICD-9, particularly documentation. Our biggest concern now is that this transition will exacerbate it," says Bogen.

Although some organizations may choose begin the ICD-10 impact analysis by only doing a documentation gap analysis, Collins says, the revenue-cycle process map has been an integral part of the Mayo Clinic's approach. "The visual provided by the process map gives us the help we need to really see the steps to take, and with the ICD-10 project you can't miss a step or two because it's just too critical to the organization to get it right."


This article appears in the May 2012 issue of HealthLeaders magazine.

Reprint HLR0512-8

 

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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