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ICD-10: Revenue Losses Loom

Karen Minich-Pourshadi, for HealthLeaders Media, July 13, 2011
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Oriol adds that he was surprised that 3% of survey respondents said they felt ready now for ICD-10. “I feel in order to be ready your payers also need to be ready. You have to be able to say, ‘Our systems are in place and we’ve tested this with our payers and they can process claims with ICD-10.’ … I’m not questioning these folks’ truthfulness; I’m questioning how much they thought about what’s [entailed] in that answer,” he says.

Payer preparedness, however, isn’t the biggest concern organizations have with getting ready for ICD-10. The No. 1 challenge providers named in preventing them from attaining ICD-10 readiness was physician cooperation. Oriol and Boynton believe that it isn’t physicians’ lack of willingness to cooperate with the ICD-10 standards; rather, it’s a matter of juggling pressing priorities for them as well.

“They are being faced with a new level of automation [with the EHR and computerized physician order entry systems] going into their workflow, and that’s changing the way they function,” says Oriol. “Though some say that ICD-10 codes are more akin to how a physician thinks, it’s still a lot of learning … and there are a large number of new codes they’ll need to learn.”

No matter where respondents were in the ICD-10 process or what they felt might slow their ability to get there, many leaders expect to take a substantial revenue hit. Forty-two percent of respondents anticipated their revenue loss from ICD-10 implementation could exceed 6% of their revenue for up to two
years after implementation. With most hospitals carrying margins of between 1% and 3%, a revenue loss of that amount sustained over two years could be quite detrimental to some hospitals and health systems.

“I think it’s responsible to assume that no one is coming out ahead at first,” says Oriol. “But if so many [respondents] think it will cost so little to get this done, yet it could cost them so much [revenue], why not get it done now?”

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