Implementing HIPAA 2 New Transactions, New Code Sets What Does it Really Take? Impact on the Revenue...

Implementing HIPAA 2New Transactions, New Code Sets

What Does it Really Take?Impact on the Revenue

Stanley NachimsonNachimson Advisors, LLC

Nachimson Advisors, LLC

Final Rules Issued To Change HIPAA StandardsOn January 16, HHS published 2 Final Rules

▫One upgrading X12 and NCPDP HIPAA administrative transactions, with a January 1, 2012 compliance date

▫ One replacing ICD-9-CM with ICD-10-CM for diagnoses ICD-10-PCS for inpatient hospital procedures With an implementation date of Oct 1, 2013 for

the change (services provided on or after that date)

Transaction Standard Upgrades

Dual Use Period

•Final rules for transactions allow use of either old or new standard until the 2012 compliance date

•Means a spread out testing and transition period, easier for the industry.

• Improvements for business• Clarity and consistency in instructions for

use of each transaction• More uniformity in situations to minimize

differences in usage among health plans.

What Do New Standards Bring

Enables use of ICD-10 Claims

Enables use of POA indicator Separates diagnosis code reporting Clarifies use of NPI Required minutes for anesthesia as

opposed to units or minutes Provides greater consistency between

dental and professional claims.

What Does 5010 Bring

• Remittance advice• Clarifies rules for use• Improves balancing• Can be used with 4010 claims• Includes medical policy segment

• Enrollment/Disenrollment• Improves privacy protection• Adds information such as enrollment

subtotals and coverage reasons

• Premium Payment• Allows for additional payment deductions• Premium remittance detail information now

required• Eligibility inquiry/response

• Adds additional benefit categories and service type codes – more specific information by service type

• Clarifies dependent and subscriber relationships

• Referral/Authorization Certification• Adds necessary functionality for use

Specific information on conditions Number of occurrences Separate segments for key patient conditions Supports and expands authorization

exchanges• Will allow use of this transaction to meet

business needs.

• Claims Status Inquiry/Response• Allows prescription number reporting• Eliminates sensitive information to satisfy

privacy concerns• Instructions for batch and real time use

• Coordination of Benefits• Improves instructions and eliminates many

ambiguities in creating the transaction

Implications•Better information on electronic transactions•Transactions more useful for business

purposes•May be able to automate certain functions•Should encourage more use of eligibility and

remittance advice transactions•May support increased Real Time

Adjudication•You can start using the better transactions

What Should Providers Do?

•Understand these changes.•Determine who is in charge of the changes

for you.•Contact vendor/clearinghouse/health plans

to determine timing of changes•Consider automating tasks to allow staff to

focus on other patient based functions.•Get a workplan in place.•CMS/Medicare will be ready on 1/1/2012 –

will you?

ICD-10 Upgrade

So What Is the Big Deal with ICD-10?•Codes change every year anyway•Transaction version changes (X12 version

5010) will be in place to handle the codes•Why not business as usual?

Major changes from ICD-9 to ICD-10•Not just the usual annual update•ICD-10 markedly different from ICD-9•Requires changes to almost all

clinical and administrative systems.•Requires changes to business

processes.•Changes to reimbursement and coverage.•Why?

Specific Changes

•Diagnosis Codes (ICD-9 to ICD-10-CM)▫Goes from 5 positions (first one

alphanumeric, others numeric) to 7 positions, all alphanumeric

▫From 13,000 existing codes to 68,000 existing codes

▫Much greater specificity

Structure of ICD-10

Examples of ICD-10-CM Specificity

• Diabetes mellitus codes are expanded to include the classification of the diabetes and the manifestation. The category for diabetes mellitus has been updated to reflect the current clinical classification of diabetes and is no longer classified as controlled/uncontrolled:

• E08.22, Diabetes mellitus due to an underlying condition with diabetic chronic kidney disease

• E09.52, Drug or chemical induced diabetes mellitus with diabetic peripheral angiopathy with gangrene

• E10.11, Type 1 diabetes mellitus with ketoacidosis with coma • E11.41, Type 2 diabetes mellitus with diabetic mononeuropathy1

Examples of ICD-10-CM Specificity

•ICD-9-CM 599.7 Hematuria (blood in urine)

•ICD-10-CM▫R31.0 Gross hematuria ▫R31.1 Benign essential microscopic

hematuria▫R31.2 Other microscopic hematuria ▫R31.9 Hematuria, unspecified

Examples of ICD-10 Specificity

•Sports injuries now coded with sport and reason for injury –▫ICD-9 code - Striking against or struck

accidentally in sports without subsequent fall (E917.0)

▫24 ICD-10-CM Detail Codes

Examples of ICD-10 Specificity• W21.00 Struck by hit or thrown ball,

unspecified type• W21.01 Struck by football• W21.02 Struck by soccer ball• W21.03 Struck by baseball• W21.04 Struck by golf ball• W21.05 Struck by basketball• W21.06 Struck by volleyball• W21.07 Struck by softball• W21.09 Struck by other hit or• thrown ball• W21.31 Struck by shoe cleats• Stepped on by shoe cleats• W21.32 Struck by skate blades• Skated over by skate blades• W21.39 Struck by other sports• foot wear• W21.4 Striking against diving• board

•W21.11 Struck by baseball bat•W21.12 Struck by tennis racquet•W21.13 Struck by golf club•W21.19 Struck by other bat, racquet or club•W21.210 Struck by ice hockey stick•W21.211 Struck by field hockey stick•W21.220 Struck by ice hockey puck•W21.221 Struck by field hockey puck•W21.81 Striking against or struck by football helmet•W21.89 Striking against or struck by other sports equipment•W21.9 Striking against or struck by unspecified sports equipment

Specific Changes•Enables laterality (right vs left designations)

•Restructures reporting of obstetric diagnoses▫ In ICD-9-CM, the patient is classified by

diagnosis in relation to the episode of care. ▫In ICD-10-CM the patient is classified by

diagnosis in relation to the patient’s stage of pregnancy

Issue – No Clear Mapping

•Not always one ICD-9 to many ICD-10s•Need more specific information to go

from ICD-9 to 10•NCHS has published “GEMs”, general

equivalence tables.▫Not a clear map

Specific Changes to Procedure Code Reporting (ICD-9-CM to ICD-10-PCS)•New Code Set for ICD-10•A US creation not used anywhere else•Change from 5 to 7 positions•Each position has a specific meaning.•Only used for inpatient hospital

procedures•However, physician documentation for

procedures will be a critical element.

Structure of ICD-10 PCS

Example of PCS Code

•ICD-9-CM (sample code)▫47.01 Laparoscopic appendectomy

•ICD-10-PCS (sample code)• Laparoscopic appendectomy 0DTJ4ZZ

▫ 0 - Medical and Surgical Section▫ D - Gastrointestinal system▫ T - Resection (root operation)▫ J - Appendix (body part)▫ 4 - Percutaneous endoscopic (approach)▫ Z - No device▫ Z - No qualifier

Why Make the Changes?

•Modernize Terminology•Increased information for public health,

biosurvellience, quality measurement•ICD-9-CM running out of codes

Why Does This Matter?

•Diagnoses and procedure codes impact virtually every system and business process in plan and provider organizations, with significant impacts on reimbursements.

Provider ImpactsDocumentation of diagnoses and procedures

▫Codes must be supported by medical documentation

▫ ICD-10-CM codes are more specific▫Requires more documentation to support codes▫Expect a 15% increase in documentation time

(per AAPC)▫Revenue Impacts of specificity

▫ Denials▫ Additional Documentation

Provider Impacts

Coverage and payment

▫New coding system will mean new coverage policies, new medical review edits, new reimbursement schedules

▫Changes will be made to accommodate increase specificity

▫May need to discuss changes with patients

Provider Impacts

Contracts with plans

Coding more specific and includes severity Renegotiations will be based on new coding,

coverage, and reimbursement Difficult to measure what the changes will

mean to overall reimbursement.

Provider Impacts

Billing and eligibility transactions•Updated transactions include support for

ICD-10•New codes mean more specificity•How smooth the transition?•Expect increased reject, denials, and

pends as both plans and providers get used to new codes.

Provider Impacts

Laboratory orders•Will need specific ICD-10-CM codes for

laboratory orders•Expect coverage changes•Need to support the tests ordered

Provider Impacts

Quality Measures/P4P

•New measures need to be determined based on ICD-10-CM codes

•Must renegotiate with provider groups•Difficult to measure impact of change – is

it because of code set or because of changes in underlying practice

Health Plan Impacts

•Contracting with providers and employers•Coverage determinations•Payment determinations•Medical review policies•Plan structures•Statistical reporting•Actuarial projections•Fraud and abuse monitoring•Quality measurements

Expected Implementation and Operational Steps•Training – not just coders.

▫Providers▫Administrative Staff▫Systems Staff

•Business Process Analysis▫Where do you use diagnoses/inpatient

hospital procedures?▫What are the interfaces that may need to

be changed?▫What databases need to be changed?

Expected Implementation and Operational Steps•Budgeting•Resource Allocation•Vendor discussions•Workplan•Impact on other initiatives

Expected Implementation and Operational Steps•Documentation/Superbills

▫Need increased documentation to support coding▫Superbills need to be updated/modified▫May need automated support based on increase in

codes.• IT System Changes

▫ System analysis▫ Programming▫ Testing internally▫ End to end testing▫ Partner testing

Expected Implementation and Operational Steps•Patient education•Communication with plans/trading

partners•External testing•Transition

What Will This Cost

•Training - $195 per provider/admin staff, $1625 per coder

•Business Process Analysis – 3-4 months for a team to research

•Changes to superbills• IT Costs – Much higher than transaction

implementation•Documentation – 15% increase in time• Increases in claim inquiries, reduction in

cash flow – 1% at a minimum

Expected Timing

•When can this start?•What other priorities are in line?•What needs to be put aside?•Remember that HIPAA transaction

upgrade will also be occurring•What 5010 changes can be done jointly

with ICD-10 changes?•How long will this take?

Ideal Timing for ICD-10

•WEDI/NCHICA Timeline▫www.nchica.org/HIPAAResources/timeline.

htm•Providers should have begun their impact

assessment•Vendors contacts should have begun•Where are you?•Medicare insists they will be using ICD-10

on the compliance deadline.

What to do now!•Final rules are published with specific

compliance dates.•Understand the impacts, begin the

planning process•Talk to vendors•Start the budgeting process• Identify key staff to begin•Track progress of CMS and NCHS efforts.

▫Coding guidelines▫Additional information

Basic Education Sites

•NCHS – Basic ICD-10-CM information▫http://www.cdc.gov/nchs/about/otheract/icd

9/abticd10.htm•CMS – ICD-10-PCS information

▫http://www.cms.hhs.gov/ICD10/02_ICD-10-PCS.asp

•AHIMA - ICD-10 Education▫http://www.ahima.org/icd10/index.asp

•WEDI – ICD-10 Implementation▫www.wedi.org

Questions?

Stanley NachimsonNachimson Advisors, LLCwww.nachimsonadvisors.comNachimson_advisors@verizon.net

Implementing HIPAA 2 New Transactions, New Code Sets What Does it Really Take? Impact on the Revenue...

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