October 1, 2015 has finally arrived – a day that marks an industry-wide operational disruption for healthcare. I’m of course talking about the launch of the updated International Classification of Diseases (ICD)—ICD-10, the highly anticipated new coding system that will affect every facet of the healthcare industry and offers tremendous new opportunities for healthcare providers and payers.
Let me provide a little context for the dramatic introduction. Healthcare has been operating under ICD-9 for more than 30 years. That’s right, three whole decades. When ICD-9 arrived, Reagan was president, the Berlin Wall divided Europe, and “We Are the World” was the number 1 song.
The world has changed. Think about the advances in medical technology since the early 80s: the procedures, the medicines and especially the smart devices used to enhance medical care. The transition to ICD-10 is designed to align with these advances, so providers and payers alike can better manage their revenue cycles, and of course, take better care of their patients and members.
Naturally, with this magnitude of change, there are bound to be obstacles and complexities. A recent study on the impact of ICD-10 implementation (click here to see the infographic) estimates a period where claim error rates will be two times higher, and denial rates could increase even more! Why? Because ICD-10 carries exponentially higher amounts of data and codes associated with a diagnosis. To put it in perspective, the level of detail is so meticulous, there are even hundreds of codes associated with event-related injuries!
Now I’ve got a whopper of a fish story for you. One example I like to reference is the hundreds of codes that are associated with fishing. That’s right, for something as obscure as a fish bite, or swallowing a hook…well, there’s a code within the ICD-10 data architecture for that. Under ICD-9, there were a grand total of nine results related to fish. Under ICD-10, however, that figure jumps to 272 results and five classifications—a thirty-fold increase! Similar levels of detail extend across the entire ICD-10 system.
Along with this incredible increase in complexity and detail comes opportunity. ICD-10 offers a more precise evaluation of new medical procedures, something lacking in the old system, which often grouped new procedures with old ones. This greater detail will allow providers to evaluate their performance relative to their peers, better allocate resources, and promote themselves to patients and referring physicians.
Opportunity abounds for payers as well. Both providers and payers can utilize ICD-10’s increased specificity to achieve cost savings through a more accurate analysis of diagnosis and care. This greater detail can improve a payers’ ability to forecast healthcare needs and trends and better analyze costs. Payers and providers can harness the data to monitor service and resource utilization, monitor outcomes and measure performance.
Of course, these long-term benefits don’t eliminate the business challenges that will come with the transition. However, it is our priority at RemitDATA to help reduce the estimated financial impact of the ICD-10 integration through the use of benchmarking and peer-to-peer comparisons with comparative data analytics solutions to monitor errors and provide proactive corrective actions to help minimize cycle disruptions.
In a nutshell, our solutions can help payers, providers, and billing companies track and monitor the impact of ICD-10 from a revenue cycle, claims adjudication, and administrative cost perspective. So, no matter how “fishy” the codes can get in ICD-10, comparative data and benchmarking from RemitDATA is a surefire way to gain insights for proactive resolutions.
On that note, anyone want to go fishing?
Cost savings for payers is more important than ever. Yet surgeons performing the same procedure at multiple facilities are generally unaware of the reimbursement rates that each facility has negotiated with individual health plans.
Surgeons are generally reimbursed the same amount no matter where they perform the procedure. Since most facilities’ reimbursement rates can vary greatly, there are wide price variances that can range as much as 400%-500% amongst in-network providers for the same procedure.
RemitDATA’s comparative analytics provide health plans with actionable information on their top surgical procedures by surgeon. With the ability to identify which surgeons are practicing at multiple facilities during the pre-authorization process, health plans can direct or incentivize surgeons to conduct the service at lower cost facilities where they currently practice. As a result, health plans and their patients will both realize cost savings without reducing the surgeon’s reimbursement.
See how a large national carrier is realizing savings of approximately $1.8 million for a specific procedure leveraging RemitDATA’s Surgeon Site of Service data.
The headlines would lead one to believe all is well post-ICD-10. “ICD-10: Smooth Transition for Claims…” and “ICD-10 is here – and it’s going great” are among just a few tidbits.
And while things have been admittedly pretty quiet during the first 30 days’ post-conversion – with just a few glitches reported here and there – we feel a reality check is in order.
It’s far too soon to tell how ICD-10 is going.
Results are still developing, according to RemitDATA’s data analysis.
In fact, year-over-year data reveals that when you compare October 2014 claims processing figures to October 2015, only 24 percent of the anticipated claims volume has been processed for the month of October.
To give some perspective: when you look at payment velocity for October 2014, 69 percent of claims were processed within the first 30 days of submission; 16.9 percent hit the 31 – 60 days’ mark; 4.4 percent were processed 61 – 90 days; and 9.7 percent were over 91 days. The data doesn’t lie, and it’s telling us to be patient, and to avoid making assumptions as to how ICD-10 is really going.
Most industry experts would agree that reports hinting at smooth sailing post-ICD-10 are extremely premature, as the vast majority of industry experts expect a gradual rise in issues related to claims processing. However, today many are making assumptions, without the data to back up their predictions.
RemitDATA will be monitoring the claims processing cycle, and will provide monthly updates revealing what the data is telling us with respect to ICD-10 and its impact on claims processing. Visit our “ICD-10 Reality Check” blog in December, when we provide another report on the status of processed claims at the 60-day mark.
I’m excited. It’s as simple as that – to tell you about a comparative analytics solution that can enhance your collaboration efforts, guide initiatives and build stronger relationships within your network.
I recently joined RemitDATA, as VP, Payer Solutions, where my sole focus is to help payers overcome business challenges through the use of comparative analytics.
Comparative Analytics might not be as exciting as jumping out of a plane or traveling the world. However, the mere fact that we develop solutions that make a difference in the way healthcare organizations utilize data to achieve business optimization is what does it for me.
Through comparative analytics payers can lower their medical cost of care, reduce administrative costs and enhance member and provider engagement.
With all of the complexities that payers are dealing with in healthcare today, the most valuable resource we can give back is comparative data that is simple to digest.
That’s the value RemitDATA brings.
- A large national databasethat enables health plans to explore a wide range of longitudinal and comparative cost studies.
- A robust and unique cost of care analytics tool that measures episode of care based on pricing performance and key cost drivers.
- A data perspective that health plans can leverage to guide their providers and strengthen their networks.
In simple to view dashboards, payers can see key areas for savings potential, and benchmark their provider network to industry peers.
Here is an example of a dashboard in the Episode of Care Pricing Analytics solution:
Intriguing? Visit, Payer solutions.
To learn more email me, MWaltrich@RemitDATA.com.