As the October 1, 2013, deadline for ICD-10 compliance gets closer, the Revenue Cycle Management will surface as the next Healthcare Organization show stopper. ICD-10 clinical specificity will better position Providers to accurately identify actual conditions and treatment, but reimbursement accuracy will require verification of acceptable variance utilizing historical ICD-9 coding, billing and receivable data.
ICD-10 clinical specificity is intended to improve understanding of diseases which will allow for realignment of costs from administration of care to delivery of care. ICD-10 will allow for refinement of financial/reimbursement models, but not without its challenges along the way…
The ICD-10 code sets are not a simple forward crosswalk or backward crosswalk update of ICD-9. The ICD-10 code sets have fundamental changes in structure and concept that make them very different from ICD-9. If healthcare entities are able to address medical policy change to defend a General Equivalency Map (GEM), reimbursements for ICD-10 coded claims must still be within an acceptable variance for Payers and Providers. Any change to GEMs, reimbursement structure or methodologies must be made on a Payer and Provider revenue-neutral basis.
For example, ICD-9 Code 6149 is categorized under MS-DRG 759. When converting to ICD-10, ICD-9 Code 6149 can be mapped to two different ICD-10 codes: N735 or B3749. These map to DRG 759 (same as ICD-9) and 690, respectively. The resulting payment in the second case is about $6,000 more than what would have been paid before the ICD-10 transition.
In order to manage the risks associated with DRG based reimbursement, Payers will need to assess their ICD-9 to ICD-10 GEMs and corresponding DRG groupers and prioritize remediation efforts towards mappings that expose the highest degree of variability while considering the associated reimbursement.
Healthcare organizations have started to prepare to address this issue by creating a seat at the executive management table for Revenue Cycle Management. Payers and Providers must be able to forecast possible changes to cash flow to protect revenue losses before, during and after ICD-10. The challenge is that financial/reimbursement models will require mutual Payer and Provider verification and Payer and Provider verification must be grounded in defensible medical policy associated to underlying GEMs.
The question is “Are Payers and Providers refining GEMs and reimbursement in an environment of collaboration?” If not, we may need to buckle in for an extended re-contracting cycle…
