With the deadline for conversion to the ICD-10 code set fast approaching, it is essential for healthcare providers, hospitals, clearing houses, and other e…
With the deadline for conversion to the ICD-10 code set fast approaching, it is essential for healthcare providers, hospitals, clearing houses, and other entities covered under HIPAA, to ensure that they are prepared to make the move from ICD-9. One of the important steps is to conduct an ICD-10 simulation exercise to understand health information and the impact of any disruption if it does occur. The exercise also enables participants to identify and alleviate potential areas that are vulnerable to ensure the least chance of disruption within the system during transition.
The need for ICD 10 Revenue Simulation
Providers will encounter and need to face numerous challenges during ICD-10 transition. To begin with, they need to plan for additional resources to support business processes. It also involves training staff on the new, more specific ICD-10 code set. Most importantly, it ICD 10 Financial Simulation will help to estimate the financial impact of ICD-1o on reimbursements and develop a customized strategy for contracts with payers. For hospitals and healthcare systems, it is essential to understand the financial effects of ICD-10 in order to optimize their resource planning.
Impact on reimbursement schemes
The implementation of ICD-10 for all inpatient diagnosis and procedures will have an impact on some reimbursement schemes for providers. This includes any schemes currently based on ICD-9 diagnosis or procedure code set such as diagnosis-related groups or DRGs. Hospitals with a significant number of inpatient claims have an opportunity to analyze and understand the impact of reimbursements in a post October 2015 environment with the help of ICD 10 Financial Simulation software. This type of software addresses areas pertaining to ICD 10 Revenue Cycle operations. For entities, this software offers insight into post conversion ICD-10 Reimbursement to reduce uncertainty and help with financial planning. Simulations are based on the MS-DRG model where custom DRG information specific to an organization can also be included.
What to expect from ICD-10 financial simulation
Your ICD 10 Financial Simulation software vendor will perform an onsite assessment of historical data on inpatient claims and provide metrics for your organization to prepare for ICD-10 conversion. This includes payment range variation from ICD-9 to ICD 10, and DRG variations for a select set of claims with the main DRGs and diagnosis and procedures codes that are to be impacted with the mapping to ICD-10. Part of the simulation includes breakdown of DRG variation by specialty. It involves a financial analysis typically with two distinct dimensions; ICD-10 reimbursement analysis, and financial sensitivity analysis to achieve an accurate understanding of the financial impact of ICD-10 transition. Reimbursement analysis measures the impact of potential shifts in DRGs and coding policies, and the impact caused by changes to payer adjudication systems. On the other hand, a financial sensitivity analysis measures the impact of ICD-10 migration on financial and clinical operations.