This blog post is the second in a series of four over the implementation of ICD-10.
The increased level of specificity from the latest iteration of the ICD healthcare classification system presents its share of challenges for physicians and healthcare providers. Most physicians are used to operating under a more forgiving system wherein they could provide vague or insufficient information regarding patient diagnosis and treatments and still expect the coder to accurately categorize the procedure or diagnosis.
Compared to its previous iteration, ICD-10 is highly specific with amended categories. Inaccurate code entries have the ability to result in overpayment, as well as impact revenue and patient medical records. Ensuring that both coders and physicians are adequately trained will mitigate opportunity for error in each of those areas.
This blog is the first in a series of four posts on the implementation of ICD-10.
The new ICD-10 classification system poses challenges for healthcare facilities due to its vastly increased specificity and the associated learning curves for coders and physicians. Failure to successfully implement the ICD-10 classification system by the Oct. 15, 2015 deadline can have a myriad of negative consequences for healthcare providers and their patients. As such, providers have a host of reasons to get things right at the coding level to avoid inaccurate medical records, overpayment and potential impacts on revenue.
Opportunities for Inaccuracy
While financial aspects will drive the focus for these audits—reimbursement accuracy, severity adjustments, fraud and abuse initiatives—the breadth of specificity in the classification system can improve both patient outcomes as well as the bottom line. But this specificity and complexity also opens it to problems. The sheer number of codes associated with ICD-10 represents thousands of opportunities for mistakes during the coding. The last iteration of ICD regulations contains 13,000 codes. By comparison, ICD-10 contains more than 68,000 codes. The ability to identify problems at the genesis will allow providers to improve their charting and coding processes, potentially avoiding costly mistakes downstream.
Small, rural hospitals all across America are facing detrimental plights in a strained changing healthcare landscape. According to media reports, more than two-dozen such hospitals have closed since 2013. While the problems associated with each hospital differs with each location, many of the challenges are rooted in financial and operational pressures. In such cases, a healthcare BPO organization can help with back-office processes.
One hospital reportedly lost nearly $3 million from $55 million in revenue in 2012, a year removed from losing $1.3 million from $57 million in revenue. Granted, this same hospital also experienced major setbacks as a result of a fire that closed the hospital for several weeks, but those problems only served to hasten the inevitable. The financial strains were unsustainable.
Some of the hospitals are provided short-term relief via nominal local tax increases approved by voters, which would float hospitals so many millions of dollars over the course of a few years. That temporary lifeline, however, does little to resolve the financial and operational pressures plaguing these small facilities.
Too small to fail?
These rural hospitals play an important role in a delicate healthcare ecosystem, as demonstrated by the willingness of voters to shoulder the costs to attempt to keep them open. However small, rural hospitals should continually look toward outside resources to decrease the costly and burdensome operations placed on local staff.
This week, September 15-19 is National Health IT Week. This initiative is a collaborative forum and virtual awareness week that assembles key groups dedicated to working together to advance health through the best use of information technology. Healthcare reform is not possible without system-wide adoption of health information technology. As a result, healthcare business process outsourcing coordinates with health IT to play an important role in improving the quality of healthcare delivery, especially by improving processes to promote financial engagement.
As the industry becomes more aware of opportunities to improve the overall consumer experience, providers shouldn’t ignore one of the single-greatest interactions that is liable to make one of the most lasting impressions on patients: the billing experience.
Improving the billing experience
Bills and finances typically are the last interaction providers have with patients. Providers should view the financial encounter as another opportunity in a comprehensive plan that seeks to educate patients about their conditions and involve them in decisions that impact their health.
Healthcare is a complicated business. Hospitals can lose money for a number of reasons: lower surgical volume, increased expenses associated with new procedures or new technologies, and from debt write-offs. Reducing write-offs, in particular, can make a huge difference. When a healthcare center doesn’t receive payments for the full cost of a service, the difference becomes a write-off. For smaller operations, balancing those write-offs is difficult, especially with growing self-pay populations. A business process outsourcing company with experience in the healthcare sector can help eliminate write-offs.
While the Affordable Care Act is creating a massive shift in how healthcare is handled, many hospitals are left to fend for themselves with write-offs. Partnering with a BPO company to manage payment processing and billing can allow a healthcare center to redirect efforts on improving provider/patient relationships.
The write-off problem
A patient’s ability to pay isn’t a determining factor for whether they receive service. As a result, healthcare is a business unlike any other. Eventually, something has to give.
The proliferation of medical data is turning data management into risk management.
Every healthcare provider must be aware of the security risks when handling patient information. For instance, on May 14, 2012, federal prosecutors charged a medical technician with violating HIPAA (Health Insurance Portability and Accountability Act). Over a 17-month period the technician used her position to access patients’ names, addresses and Medicare numbers. She then attempted to sell their information. Earlier, in an unrelated event, this same hospital notified more than 34,000 patients that their medical data had been compromised. A contractor downloaded the patients’ files onto a personal laptop, which was then stolen from the contractor’s car. The data on the laptop was password-protected but unencrypted, which means anyone who cracked the password could have accessed the patient files. Core measures established under HIPAA and the HITECH Act require all parties who touch private medical records to conduct a security risk analysis to be compliant and qualified for incremental government financial incentives.
A trusted BPO provider, knowledgeable of HIPAA and HITECH compliance issues, is the best solution for providers looking to streamline back-office processes while maintaining the highest security standards.
The real penalties for bad processes
Failing to comply doesn’t just mean a loss of incentives, there’s a real cost with civil and criminal penalties and fines for lax security processes. The old adage “an ounce of prevention is worth a pound of cure” is especially true here.
As the deadline for HITECH compliance approaches, the BancTec iBPO blog will continue to focus on issues of interest to healthcare organizations. Last week, we looked at the opportunities available with an improved document management solution for EMR. This week, we will explore the challenges to financial administration in healthcare and new payment trends.
The Centers for Medicare are Medicaid Services (CMS) presented the Bundled Payments for Care Improvement initiative, an innovative new payment model. Under the Bundled Payments for Care Improvement initiative, organizations will enter into payment arrangements that include financial and performance accountability for episodes of care. These models could lead to higher quality, more coordinated care at a lower cost to Medicare.
Four Bundled Payment Models
Bundled payments have been proposed as a “middle ground” between fee-for-service reimbursement (where providers are paid for each service) and capitation (providers are paid a lump sum regardless of how many services are given). In this approach, reimbursement to providers is based on the expected costs for clinically-defined episodes of care. CMS established four broad models for care:
1. Retrospective Acute Care, Hospital Stay Only — Medicare will pay the hospital a discounted amount based on the payment rates established under the Inpatient Prospective Payment System used in the original Medicare program. Medicare will continue to pay physicians separately for their services under the Medicare Physician Fee Schedule.
This upward trend is supported by an improving overall economy and rising revenue in the human resource, finance and accounting, customer relations management and insurance sectors. All provide a large portion of BPO business.
“Additionally, rising wages and increased operating costs associated with the passage of Patient Protection and Affordable Care Act (PPACA) helped drive employers to BPO companies as a method of cost control,” says Stephen Morea, IBISWorld Industry Analyst. As a result, in the five years through 2014, BPO Services industry revenue is expected to increase at an annualized 4.1 percent to reach $127.4 billion and includes a 4.5 percent increase in 2014 alone.
IBISWorld is an independent source of industry and market research. It offers a comprehensive database of information and analysis on every US industry.
This study mirrors findings from August 2013. According to a study released by Markets and Markets, the U.S. healthcare outsourcing market has great potential for growth owing to the measures taken by the government to curb the ever-increasing healthcare costs.
BancTec predicted such an impact from the Affordable Care Act, which IBISWorld now confirms. Read our blog post The Affordable Care Act Simplified and Its Impact on Outsourcing or our ebook Untangling the Administrative Knot of the Healthcare Industry for more information.
When it came to healthcare, in the past, there were two options: either the doctor made a house call and came to you or you went to the doctor. However, virtual care may become an increasing significant third alternative. In many regards, patients are already turning to virtual solutions — with or without the actual doctor. Two-thirds of all U.S. broadband households have visited a healthcare website in the past year. Thirty-six percent visited a health portal like WebMD. Sites like these can be tremendously helpful. However, they can also confuse patients when a symptom like “dizziness” could lead to such varied conclusions as middle ear infection, carbon monoxide poisoning, or diabetes.
Providers are exploring virtual healthcare technology to better serve patients. Virtual health kiosks and portals, remote consultations, and electronic personal health records present new opportunities. These digital doctor-patient visits could create a new healthcare claims conundrum. In these instances, an experienced healthcare BPO company can improve efficiency and reduce costs.
According to Forbes.com, by 2018, 22 million households will use virtual healthcare, up from less than a million in 2013. Average visits among these adopter households will increase from 2 per year in 2013 to 6 per year in 2018, which include both acute care and preventive follow-up services in a variety of care settings—at home, at retail kiosk or at work.
October may seem far off, but for physicians and hospitals, the rush is on to comply with HITECH (Health Information Technology for Economic and Clinical Health Act). This mandate requires the adoption of electronic records by the Fall 2014 deadline. If hospitals fail to do so, they face penalties in the form of reduced Medicare/Medicaid payments.
Adopting EMRs (electronic medical records) is a no-brainer for doctors and hospitals. Electronic medical records allow doctors to work more efficiently. However, as reported by Forbes.com, some doctors find that EMRs hinder them.
First and foremost, physicians want reliable electronic medical records. The Atlantic reported on one such error. According to Dr. Richard Gunderman:
An intern recently presented a newly admitted patient on morning rounds, reporting that the patient was “status post BKA (below the knee amputation).” “How do you know?” the attending physician inquired. “It has been noted on each of the patient’s prior three discharge notes,” replied the intern, looking up from his computer screen. “Okay,” responded the attending physician. “Let’s go see the patient.”
When the team arrived in the patient’s room, they made a surprising discovery. The patient had two feet and ten toes. Where did the history of BKA come from? It turned out that four hospitalizations ago, the voice recognition dictation system had misunderstood DKA (diabetic ketoacidosis) as BKA, and none of the physicians who reviewed the chart had detected the error. It had now become a permanent part of the electronic medical record — as if written in stone.
The intern’s mistake highlights a growing concern about government-mandated electronic medical records. Will doctors spend more time in front of computer screens and less time with patients?