2012 03 18 ICD-10 Payment Reform and Role of the Coder ...static.aapc.com/a3c7c3fe-6fa1-4d67-8534-a3c9c8315... · ICD‐10 Microeconomics Code Sequencing Example (7 of 8) Source:

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Impact of ICD‐10 and Payment Reform on Revenue Cyclesy

Michael Arrigo

No World Borders

April 2012

1All Rights Reserved

Conflict of Interest Disclosure Michael F. Arrigo

• CEO, No World Borders, health care consulting firm.

• Writer, Government Health IT News

• Moderator, Social Media forums on HIT

• Consultant: Kleiner Perkins Caufield & Byers, a venture capital fi i d i h l h ITfirm invested in health IT

• Business partner: TIBCO, Software AG

• Stockholder: Quality Systems Inc.


Agenda

• Research & Sources for this Presentation

• Introduction to Evolving Systems

• Thinking Differently

• ICD‐10 Macro and Micro Economics

• Comparative Effectiveness Research

• HIT, Revenue Cycle & Payment Reform

• Future Role of the Coder


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Research: Who We Talked To

• CMIO

• Hospital CFO

• Director of Clinical Documentation

• Director of Regulatory Compliance

• Primary author, Stage 2 Meaningful Use

• Deputy Director, HHS ONC

• CEO, Electronic Medical Records Companies

• Product Manager, Computer Assisted Coding

• Architect, Clinical Encoder

• Sales person, Computer Assisted Coding

• Sales person, Encoders

• Product marketing manager EMR company

• Orthopedic Surgeon

• Head and Neck Surgeon

• Interventional Radiologist

• CIO, Clinical Imaging Company

• VP Revenue Cycle Management

• Small Medicare Advantage Health Plan

• Large Blue Health Plan

• Customers of HIT solutions

• Patients


Additional Research

• Dr. Greenfield: Center for Health Policy Research, University of California

• Dr. Sox: American College of Physicians

l G b h d S i• Alan M. Garber M.D., Ph.D., and Sean R. Tunis M.D. New England Journal of Medicine

• Dr. Joe Nichols MD – AAPC Speaker


Evolving Systems: What are They?

• Examples:– Families– Parenting– Social Media– Health care (and humans)( )

• Characteristics– Ranges of answers, not finite answers– Deal in probabilities not answers– Compounding effects– Infinitely inter‐related– Randomness – things that happen for no reason

6Source: Jay Walker, Speaker, Founder of PricelineAll Rights Reserved

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How Evolving Systems Make us Think Differently: Be Open to Change

• Teaching:

– Khan Academy



• Social media: Streaming and Twitter fall



• Wikipedia & Encyclopedia Britannica


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ICD‐10 Macroeconomics

• U.S. National Healthcare Expenditures (NHE) are $2.7 trillion in 20111 and are forecasted to grow 34% in five years.

• ICD‐10 will introduce opportunities and risks to hospitals and health plans that may be equivalent to the $148.2 billion to $500 billion in losses$500 billion in losses

• Extreme example: 153% reimbursement risk

• Plausible: 4.4% risk

Source: M. Arrigo, Government Health IT Newshttp://www.govhealthit.com/news/could‐icd‐10‐have‐big‐financial‐impact‐mortgage‐crisis


Hypothetical Extreme Case

• First, reimbursement risk affects all parties in the healthcare service supply chain.

• For example, an 82‐year old female patient with a cardiovascular condition could have a procedure under ICD‐9 CM with a correlating Diagnosis Related Grouping (DRG) of 251 equaling a reimbursement to the provider of $9,622.80.

• Under ICD‐10 this same procedure might be documented and coded similarly and correlate to the same DRG of 2516. In this case the reimbursement would be “neutral” under ICD‐10.

• If the same procedure is documented and coded differently, this procedure could result in a DRG 2307 . The reimbursement might shift to $24,343. This reimbursement risk is $14,721 or 153% of the original reimbursement.

• However, CMS suggests cross‐walking this procedure to another DRG 2548, which could result in a third reimbursement outcome.

• A macroeconomic view in this spreadsheet shows the impacts, using CMS projections.



Possible

• Ambulatory (ICD‐10 CM + CPT)

• Inpatient (ICD‐10 CM + ICD‐10 PCS)

• See spreadsheet next page



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ICD‐10 MicroeconomicsCode Sequencing Example (1 of 8)

Source: Dr. Joe Nichols MD 13All Rights Reserved





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• Coding sequence in ICD‐9 and ICD‐10 has the same effect to changing the DRG

• There are several alternate primary codes that might have been used. It is interesting to note that in Scenario 6 if Hypertensive kidney disease is coded and not Hypertensive heart and chronic kidney disease the weighing is actually higher.Al h i i f h d h i h• Also note the various payment options for other codes that might have been coded.

• If one was coding this and wanted to get paid more, the documentation might state that the patient was admitted primarily related Hypertensive chronic kidney disease with a secondary diagnosis of acute systolic heart failure.

• This is a reasonably good illustration of how coding and documentation in I10 can have significant impacts


What is Comparative Effectiveness?

• “…compare the effectiveness of different treatments for the same illness…”(1)

• “CER is the generation and synthesis of evidence that compares the benefits and harms of alternative methods to

t di t t d it li i l diti tprevent, diagnose, treat and monitor a clinical condition, or to improve the delivery of care. The purpose of CER is to assist consumers, clinicians, purchasers, and policy makers to make informed decisions that will improve health care at both the individual and population levels.

(1) NY Times, 2/15/2009


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Clinical Effectiveness Research (CER) vs. Payment Reform

• Research of CER vs. “Operationalizing” Quality measures and payment incentives

• Medicare Advantage – HEDIS 5‐Star: Health Plans

• Medicare Advantage – Hospital Value Based Purchasing HospitalsPurchasing – Hospitals

• Accountable Care Organizations


Comparative Effectiveness & Payment Reform “Operationalized”

Services Limited by Specific Fee Codes and Amounts

Flexibility to Deliver Highest Value Services

Providers Lose MoneyIf They Reduce Unnecessary

Ability to RemainProfitable by Keeping People

Current Payment Systems Aims of Payment Reform

Services

Providers Are Paid the Same or More for Poor Quality Care

Payment Levels Don’t Match Achievable Costs of Services

Providers Paid More to Care for Sicker Patients

Healthy

Lower Payment and Loss of Patients for Lower Quality Care

Adequate Payment without Need to Cross‐Subsidize

Providers Paid More to Care for Sicker Patients

All Rights Reserved 23

Definition of Success

Long Term: Payor / Provider partnerships and reimbursement models that reward improved

outcomes, rewarding value over volume


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Improving Population Outcomes

Population Health

• 5‐Star metrics

• Mortality rates

• Other

Per Capita Costs

• Total PMPM

• Rx PMPM

• Readmissions

Experience of Care

• Patient satisfaction

• PAM scores

measures


• Other measures

(patient activation measures)

Business Challenges• Health Care Reform drives financial incentives and penalties.

– 5‐Star Ratings mean access to CMS reimbursements

– Accountable Care Organizations will drive investment in new areas

– Health Information Exchanges will drive new paradigms

– For providers, Electronic Health Records and Meaningful Use

• Health Information Management regulations– ICD‐10 will change change the logic for quality measures and create

new issues related to data acquisition, data quality and trending

– HIPAA 5010 will force payor / provider trading partner coordination

• More informed member / patient population (performance data available to consumers on the web, social media, etc.)


I.T. Challenges

• Silos lead to a disconnected business and IT infrastructure

• Islands of computing create inefficiency & underutilized assets

• Missing or competing data standards, limited interoperability

• Struggle with regulatory compliance volume of information• Struggle with regulatory compliance, volume of information,

data integrity and security

• Resource constraints, difficulty managing complexity /change

• Volume of data points, quality measures, widely dispersed


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Building the Population Data Management Infrastructure

Payer & Provider Issues• Need to manage data across the continuum of care to enable

population health• Connect system participants via real time interactivity• Analyze and report based on quality metrics

Provider Issues that touch Payers in the Future• Link with population management and payment systems• Wire population to accept responsibility for ongoing care

Enablers for Preferred Care• Business Intelligence, Process Improvement• Data Integration and Case Management Linkages


Industry Data: Most Health Care Companies Strongest in “Billing and Claims System Data Warehouse” and least in

“Population Health Analysis Systems”


Future Role of the Coder (1 of 2)

• Enabling shift from single encounter focus…• To continuity of care focus, episodic care

• Supporting technologies– EMRs : 30% adoption > 50% in 2013? (ONC)– EMRs : 30% adoption > 50% in 2013? (ONC)– Digital Narrative form EMR– Encoders: “tree structure” vs. book, narrative based– Interoperability standards– Computer Assisted Coding (CAC)– Ontologies that “guide” CACs– HHS ONC Clinical Document Architecture Standard: CCD


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Encoder View circa 2010

Source: 3M31All Rights Reserved

Computer Assisted Coding

Source: 3M 32All Rights Reserved

How Does CAC Work?

Source: 3M


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Note:

Computer Assisted Coding Does NOT Replace the Coder


Technology and Comparative Effectiveness – Clinical Document

Architecture• Continuity of Care Document

• Composite Continuity of Care Document

Note: Slides will show two images of CCDs with PHI removed, permission of Optum. These slides are not being published on the internet at their request.

Source: Optum


Future Role of the Coder (2 of 2)

• Continue to be trained on ICD‐9 to ICD‐10

• Complexity of coding will drive increased demand for Computer Assisted Coding

US M k t ll th C di M k t f CAC– US Market smaller than Canadian Market for CAC today, Canadian market uses ICD‐10

• Coder as “strategic member” of quality team in deeper partnership with physician and clinical team


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Thank You

Michael Arrigo

[email protected]


Documents

2012 03 18 ICD-10 Payment Reform and Role of the Coder ...static.aapc.com/a3c7c3fe-6fa1-4d67-8534-a3c9c8315... · ICD‐10 Microeconomics Code Sequencing Example (7 of 8) Source: