Post on 25-Aug-2020
3/20/2012
1
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.
2All Rights Reserved
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
3All Rights Reserved
3/20/2012
2
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
4All Rights Reserved
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
5All Rights Reserved
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
3/20/2012
3
How Evolving Systems Make us Think Differently: Be Open to Change
• Teaching:
– Khan Academy
7All Rights Reserved
How Evolving Systems Make us Think Differently: Be Open to Change
• Social media: Streaming and Twitter fall
8All Rights Reserved
How Evolving Systems Make us Think Differently: Be Open to Change
• Wikipedia & Encyclopedia Britannica
9All Rights Reserved
3/20/2012
4
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
10All Rights Reserved
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.
Source: M. Arrigo, Government Health IT Newshttp://www.govhealthit.com/news/could‐icd‐10‐have‐big‐financial‐impact‐mortgage‐crisis
11All Rights Reserved
Possible
• Ambulatory (ICD‐10 CM + CPT)
• Inpatient (ICD‐10 CM + ICD‐10 PCS)
• See spreadsheet next page
Source: M. Arrigo, Government Health IT Newshttp://www.govhealthit.com/news/could‐icd‐10‐have‐big‐financial‐impact‐mortgage‐crisis
12All Rights Reserved
3/20/2012
5
ICD‐10 MicroeconomicsCode Sequencing Example (1 of 8)
Source: Dr. Joe Nichols MD 13All Rights Reserved
ICD‐10 MicroeconomicsCode Sequencing Example (2 of 8)
Source: Dr. Joe Nichols MD 14All Rights Reserved
ICD‐10 MicroeconomicsCode Sequencing Example (3 of 8)
Source: Dr. Joe Nichols MD 15All Rights Reserved
3/20/2012
6
ICD‐10 MicroeconomicsCode Sequencing Example (4 of 8)
Source: Dr. Joe Nichols MD 16All Rights Reserved
ICD‐10 MicroeconomicsCode Sequencing Example (5 of 8)
Source: Dr. Joe Nichols MD 17All Rights Reserved
ICD‐10 MicroeconomicsCode Sequencing Example (6 of 8)
Source: Dr. Joe Nichols MD 18All Rights Reserved
3/20/2012
7
ICD‐10 MicroeconomicsCode Sequencing Example (7 of 8)
Source: Dr. Joe Nichols MD 19All Rights Reserved
ICD‐10 MicroeconomicsCode Sequencing Example (8 of 8)
• 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
Source: Dr. Joe Nichols MD 20All Rights Reserved
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
21All Rights Reserved
3/20/2012
8
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
22All Rights Reserved
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
All Rights Reserved 24
3/20/2012
9
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
All Rights Reserved 25
• 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.)
All Rights Reserved 26
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
All Rights Reserved 27
3/20/2012
10
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
All Rights Reserved 28
Industry Data: Most Health Care Companies Strongest in “Billing and Claims System Data Warehouse” and least in
“Population Health Analysis Systems”
All Rights Reserved 29
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
30All Rights Reserved
3/20/2012
11
Encoder View circa 2010
Source: 3M31All Rights Reserved
Computer Assisted Coding
Source: 3M 32All Rights Reserved
How Does CAC Work?
Source: 3M
33All Rights Reserved
3/20/2012
12
Note:
Computer Assisted Coding Does NOT Replace the Coder
34All Rights Reserved
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
35All Rights Reserved
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
36All Rights Reserved
3/20/2012
13
Thank You
Michael Arrigo
marrigo@noworldborders.com
37All Rights Reserved