In October 2015, healthcare providers transitioned to an advanced version of medical coding, the ICD-10. Replacing the ICD-9, a system developed in the late 1970s for International Classification of Diseases, the ICD-10 reflected a five-fold increase in diagnostic coding capabilities.
For HIPAA covered professionals who rely on codes for diagnosing patients and billing for services, the ICD-10 provides critical information about epidemiology, health management, and treatment conditions. While the transition between the systems was not entirely seamless, the overall number of ICD-10 claim denials has remained low and hasn’t significantly affected the total percentage of claim denials in healthcare facilities nationwide.
To understand the developments and current standing of the ICD-10, one must evaluate the transition from a longitudinal perspective. The expansion satisfied a level of medical detail that the ICD-9 lacked, offering accurate medical descriptions, differentiating risk and severity, distinguishing symptoms of diseases, and efficiently reimbursing claims.
While all indications point to the ICD-10 system being robust and long-lasting, many providers voiced concern about the initial transition. Why were they tentative? Is it possible to measure its current degree of success? Here, we will discuss the potential problems providers faced when instituting the ICD-10, its impact on claims and denials, and how data analysis can prove its viability in individual healthcare facilities.
Providers Fear of a Rough Transition
When the ICD-10 introduced a monumental change across healthcare industries, many hospitals and medical providers feared its institution would complicate claim denials processes and ultimately hurt revenue. To some degree, this concern was warranted; an incompatible transition could be detrimental to the transparency of clinical staff, level of patient care, and efficiency of insurance claim handling processes.
Issues with previous healthcare implementations, such as HealthCare.gov, might have aroused hesitancy among providers and clinicians. In-depth planning, preparation, and collaboration became vital to the success of ICD-10. Like Y2K, however, the projected problem was much broader in scope; the transition between ICD-9 and ICD-10 occurred with minimal difficulties or negative impacts, making most concerns about the change unfounded. Additionally, the ICD-10 has helped hospitals focus on value-based treatment, as its transparency helps patients understand their medical records.
Impact of ICD-10
In the two years following the ICD-10 implementation deadline, few health care providers have reported a noticeable difference in their revenue streams. On average, the current percentage of denied ICD-10 claims for most practices is 1.6%. This number is comparable to and in some areas lower than, the percentage of insurance claims denied under the predeceasing ICD-9 system.
The Centers for Medicare and Medicaid Services declared that their portion of ICD-10 denials was even lower, at 0.07%. No significant increase in claims denials has resulted from the ICD-10; a positive sign that the system is robust, and has the potential for denial prevention. CMS has thus far developed a sound diagnostic system, with a greater focus on the consumer, collaboration among stakeholders and the healthcare community, responses to ICD-10 challenges, and metrics to keep claim processing and denial rates in check.
Despite the significant increases in efficiency and diagnostic abilities afforded by ICD-10, it cannot solve all potential claims denial issues. As many as 1 in 5 claims are denied in some practices, which can have a significant effect, as much as 3%, on a system’s overall revenue losses. Regardless of advancements in medical coding, it is difficult to anticipate or mitigate all claim denials. Almost $13 billion in medical claims has been denied since ICD-10 was implemented.
There is a multitude of resources that can help medical providers understand and effectively institute the ICD-10 system. Whether online or with the help of an experienced health management team, such as eReceivables, one can develop their ICD-10 claims handling process, identify areas of lost revenue, and ultimately strategize how to reduce the rate of ICD-10 denials.
With an emphasis on maintaining accurate data and optimal efficiency, the strategies outlined at eReceivables can also assist providers in managing pre-authorization, optimizing staff time, mitigating financial risks, and leveraging RCM processes. By offering an expertise knowledgebase and managerial support, eReceivables can help providers streamline the implementation and reap the benefits of the ICD-10 system.
Fortunately for health care providers and their patients, most of the concerns leading up to the ICD-10 transition were not warranted. The transition was most difficult for smaller practices, who weren’t guaranteed to have the resources necessary to meet the implementation deadline. Two years after the implementation of ICD-10, however, insurance claim denials are at historically low levels and appear poised to stay that way