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ICD-10 Revenue Neutrality: A Strategic Approach

Regardless of the pending ICD-10 deadline extension, the healthcare industry will still need aggressive effort in refinement of defensible ICD-10 General Equivalency Maps (GEMs), remediation of impacted processes and systems, and a roadmap to figure out how payers and providers can work together to achieve neutrality objectives.

To date, there has been only limited guidance to define the dimensions of neutrality. Dennis Winkler, Director of Program Management with BlueCross BlueShield of Michigan (BCBSM), defined six dimensions of neutrality and BCBSM’s approach to achieving payment neutrality during the ICD-10 Summit in Cape Coral, FL on Feb.16, 2012, including: Revenue (Payer), Payment (Provider), Benefit (Member), Clinical (Programs), Operational (Servicing) and Financial (Overall). Dennis defined Revenue Neutrality as, “Neutrality is based on no significant increase or decrease in reimbursement.”

Within Revenue Neutrality payers must consider clinical accuracy, contractual logistics and parsing of procedural coding in a way that encompasses all possible iterations of clinical modeling within revenue modeling. This will not be easy…

Revenue Neutrality must address anticipated reimbursement relationship changes with providers. Reimbursement must consider timing of claim submission, provider coding knowledge/expertise, anticipated variations in provider coding policy as well as remediation of adjudication processes.

In addition, Revenue Neutrality must address anticipated operational and technology changes including gateway systems, data platforms, data channeling for claims submissions, data channeling to address gaps and upgrades during ICD9 to ICD10 transition, and data channeling to address ICD10 coding refinement and contractual fulfillment ongoing.

Revenue Neutrality must ensure clinical accuracy is inclusive of pre-defined mapping to GEMS, MS-DRG, and reimbursement that will serve as a starting point for comparative analyses. Payers must develop capability for ongoing comparison of claims coded in ICD-9, ICD-10, and ICD-9 paired to ICD-10 formats to evaluate assignment of benefits based upon contractual specifications, pre-, concurrent-, and post- transition from ICD-9 to ICD-10. Payers should review claims for billed, allowed and paid amounts based upon higher risk of variability in procedural coding considering volume of specific ICD-9 codes used, dollar value of reimbursement assigned to code within claim, and the utilization associated to specific providers.

Revenue Neutrality verification may occur at Entry, Intermediate or End stages of Claims and Benefits assignment.

Entry-stage verification will entail a thorough review of claims prior to entering payer data processing systems. Entry-stage verification can include complete claims review or pilot analyses. Entry-stage verification will enable lapses in clinical accuracy and financial neutrality in the beginning stages that will deter later processing efforts. Limitations to entry assessment include a lack of incorporating the complete processing systems based on predictive modeling. Advantages include early detection and modeling that can guide later processing.

Intermediate-stage verification will require claims be reviewed in pre-determined stages of data processing, to ensure that information is consistent throughout claims cycling in ICD-9 and ICD-10 submissions. Intermediate assessment will enable a review of the processing infrastructure with regard to all components of financial neutrality. Intermediate assessment will enable real-time modifications to reimbursement determinants before entering extensive adjudication processes. Limitations to Intermediate-stage verification include having a variable number of data processing factors that are not consistent across all claims reporting periods. Advantages include a dynamic review as the information is being processed.

End-stage verification can be further categorized into provider specific, contract specific, and disease specific comparison between ICD-9 and ICD-10. The objectives of an End-stage assessment will encompass an overall differential comparison in billed, allowed, and paid amounts that include the claims submission process in its entirety. Limitations to End-stage verification may be its deficiencies in a comprehensive review of lapses that may occur during provider processing and submission, data processing, and inherent information systems flow. Advantages include having all claims information processed at a final stage of contractual comparison.

The reality is that Revenue Neutrality verification is still subject to the availability of a Claims and Benefits test environment that will mirror production but accommodate GEMs and reimbursement schedule refinement on the fly.  Does this mean that organizations will be subject to an infrastructure investment that also mirrors production?  And will the test environment be subject to the same change control rigor of the production environment? I wonder if we have enough “maintenance widows” to support the number of changes to Claims and Benefits systems’ application logic before we know what changes to make the GEMs and reimbursement schedules…

Revenue Neutrality may have an initial focus on billing and reimbursement based on clinical accuracy in procedural coding, but will ultimately depend upon remediation of information systems and close collaboration between the payer and provider for ongoing refinement of reimbursement contracts.

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One thought on “ICD-10 Revenue Neutrality: A Strategic Approach

  1. Steve Sisko

    Good take on info offered during the ICD-10 Summit.

    Was that reference to “maintenance widows” a Freudian-slip? Or intended to convey the risk associated with leaving untested business processes to fend for themselves in production?

    :)

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