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BILLING & COLLECTIONS

Get ready now for critical ICD-10 deadline

ICD-10 takes effect October 1, 2015, which doesn’t leave much time to prepare – especially when you consider the dramatic impact the new code sets will have on medical offices from the standpoint of staffing, training, and, perhaps most significant of all, financial management.

Many physician practices have not started down the ICD-10 path, says Ira Shapiro, CEO of The CODESMART Group, a company that provides a full range of ICD-10 transition solutions.

According to Shapiro, lack of preparation will impact a practice’s bottom line.

“If you’re not ready, and if you submit a claim that is not correct, your payment will be delayed,” he tells Medical Office Manager, pointing out the result could be a serious cash flow issue.

By way of background

ICD-10, the tenth revision of the medical classification list published by the World Health Organization (WHO), is far more complicated than ICD-9. Where ICD-9 consists of 17,000 codes and a five-digit numbering system, ICD-10 includes 155,000 codes and a seven-character alpha-numeric system.

The “new” system isn’t exactly new; it is currently used in many countries. In fact, the United States is the last among developed nations to implement the new code sets.

Deadlines for U.S. implementation have been announced in the past, and then implementation was delayed. This may explain some of the reluctance with regard to preparation, and the perceived lack of urgency. But make no mistake: October 1, 2015 is the deadline.

There is good reason to move ahead with the change. ICD-10 code sets allow for greater specificity, providing more information for physicians and clinicians, which will result in better patient care.

Yet, it is this specificity that creates challenges for medical office managers.

Productivity implications

Under ICD-10, the average inpatient medical chart requires about one hour of coding, according to Shapiro, where an outpatient chart requires approximately half an hour – which, on average, is about twice as long as ICD-9.

Expect a drop-off in productivity of 50 percent, Shapiro says.

As a result, medical offices need to hire more coders and/or outsource a portion of coding. Outsourcing, at least in part, seems to be a popular solution. “Every single hospital is outsourcing coding to some degree,” Shapiro says.

They often have little choice. The problem with hiring more coders is that the good ones are being snapped up. Meanwhile, others are leaving the profession. “We think we’re going to lose one-third of the coders,” Shapiro tells Medical Office Manager. Indeed, he expects a shortage of 3-4 million coders as a result of ICD-10.

Knowledge requirements

With so many job openings, why are medical coders leaving? And why aren’t more entering the profession?

ICD-10 requires a whole new knowledge base. Coders must have subject matter expertise in medical terminology, as well as in anatomy, physiology, and pharmacology, Shapiro explains.

In other words, coding is more than a clerical job. Indeed, the average starting salary for an ICD-10 coder with no experience is $50,000 to $60,000 per year.

Moving forward

Needless to say, lack of preparation means many practices have not budgeted for expenses related to ICD-10. These expenses may be related to training, higher payroll, and/or the cost of outsourcing coding.

Shapiro tells Medical Office Manager that the American Medical Association (AMA) puts the cost of transitioning to ICD-10 at $50,000 to $120,000 annually.

His recommendation? “Budget for it; it’s not going to be free.”

Meanwhile, Shapiro stresses the importance of making sure everyone is properly training in coding, billing, and clinical documentation. “Education is key; it’s the most important thing,” he says.

In addition, he says it’s essential to look at your electronic health record (EHR) system and make sure it’s ICD-10 compliant.

He suggests medical office managers approach the transition from a project management perspective, with attention to detail and the looming deadline.

“Take ICD-10 very seriously,” Shapiro says. “If you don’t, the practice can go out of business.

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