Health Information Management

ICD-10 financial impact still largely unknown for organizations

APCs Insider, January 24, 2014

Want to receive articles like this one in your inbox? Subscribe to APCs Insider!

There’s no question as October 1 approaches that the transition to ICD-10 will have a huge financial impact on healthcare providers and payers. However, half of them don’t know what the cost will be.
Fifty percent of the respondents to a recent survey by accounting firm KPMG said that they had yet to estimate the cost of moving to ICD-10. Of those who had made estimates, totals ranged from $1 million to more than $15 million.
On the plus side, 72% of the organizations have allocated budget toward readiness efforts, and perhaps not coincidentally, nearly the same amount (73%) responded that they expected the transition to have a moderate to severe impact on their organization’s bottom line.
The transition will impact all aspects of the revenue cycle, and 45% of the respondents expected that claim denial management would be the area most affected beyond coding and documentation.
The uncertainty in the transition’s impact could be eased by performing end-to-end testing of systems well ahead of October 1. However, only one third of the respondents have begun that process, but 28% of the respondents said they still plan on compliance testing before the deadline.
Since performing end-to-end testing during the HIPAA 5010 rollout, CMS originally planned to forego doing it for ICD-10, while urging facilities and payers to conduct their own testing. However, several outside organizations, including the AHA and Workgroup for Electronic Data Interchange, have asked CMS to reconsider.
CMS is mandating front-end testing between MACs and healthcare organizations from March 3-7 and will include live help desk support.
Whether CMS reconsiders and requires end-to-end testing, it’s clear from the survey results that many organizations are still taking only tentative steps toward ICD-10 implementation with less than a year before the deadline. Yet coding and billing departments, payers, and software vendors must work in unison in order to have a chance to test and assess the impact of ICD-10.

Want to receive articles like this one in your inbox? Subscribe to APCs Insider!

Most Popular