ICD-10 transition successful at 80 percent of organizations: KPMG survey

October 1st’s changeover to ICD-10 – a five-fold increase in the billing codes used in healthcare – consumed a great deal of time and energy among IT, clinical and finance professionals, but a KPMG LLP survey found 80 percent of organizations said the transition has proceeded smoothly.

 “ICD-10 is the healthcare industry’s equivalent to the Y2K changeover in scope and has a profound influence on not only the billing and reimbursement, but the ability to track quality of the delivery of healthcare,” said Todd Ellis, managing director at the tax, audit and advisory firm. “This is an ongoing process, however, and this transition affects not just technology, but finance, employee training, clinical information, and other functions in healthcare.”

 

ICD-10 (International Classification of Diseases, 10th Revision) represents a vast changeover in medical coding and billing, expanding the number of diagnostic codes to 68,000 from 13,000 set more than 30 years ago. More specific coding allows greater insights into reimbursement and the quality of care, healthcare experts say.

Catherine O’Leary, KPMG managing director, said the first few weeks of the transition have been smooth with only limited technical difficulties, but providers will need to dedicate more attention to the quality and specificity of clinical documentation to reduce rejected medical insurance claims.

The survey of 298 attendees of the Nov. 9 Webcast, ICD-10: Just the Beginning, bear this out with 28 percent saying the transition has been smooth and another 51 percent found “a few technical issues, but overall successful.” About 11 percent described the transition as a “failure to operate in an ICD-10 environment.”

Survey respondents said the largest challenges they see with ICD-10 include rejected medical claims, clinical documentation and physician education, reduced revenue from coding delays and information technology fixes. The survey found 42 percent of respondents said all of these challenges are part of ICD-10. Only 11 percent of claimants said they did not expect those challenges to arise.

With ICD-10 going live, 46 percent of respondents said they were thinking of pursuing initiatives in clinical documentation improvement, revenue cycle optimization, and electronic health record and IT system optimization. The survey found that 25 percent were pursuing none of those options.

Along with the investment in time, money and technology among healthcare organizations, the transition has been beset by delays impacting the bottom line of many healthcare organizations. “Organizations are beginning to see dips in cash flow due to payers delaying the processing of ICD-10 claims while they ensure their ability to appropriately adjudicate these claims, while others are seeing an increase in claim denials over pre-ICD-10 levels” said Craig Greenberg, KPMG director, advisory. Greenberg’s comments focused on the long-term impact upon profitability that revenue cycle management can have upon providers.

“While there seems to be a fairly smooth transition to ICD-10, the 11 percent of organizations that are struggling need to be helped,” Ellis said. “The communities these organizations serve depend upon their healthcare providers to meet their medical needs and we need to help them through these challenges. ICD-10’s implementation was a lengthy process and unfortunately they will address these issues or face greater competitive disadvantages in measuring quality and reduced cash flow.”

Survey results were gathered during the Nov. 9 webcast, featuring Ellis, O’Leary and Greenberg. A replay of the Webcast can be heard here.

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