HIMagine That! The Real Deal with ICD-10 Financial Impact

Sue        What’s this buzz I am hearing about the negative financial impact of ICD-10? I thought CMS said that MS-DRGs determined under ICD-10 should replicate the payment generated using the ICD-9 MS-DRGs.

Donna   That’s exactly what CMS said, but there’s so much misinformation out there,   there’s a real sense of panic.  Remember when we went to the AHIMA ICD-10 Summit last April and there was a speaker who warned about “huge financial implications” in going from ICD-9 to ICD-10?

Sue        How could I forget? I had to listen to you rant about it. You were really incensed that the speaker was creating fear with incorrect information and no specific examples to support his case.

Donna   Yes, but some of the attendees didn’t understand this and were very nervous about reporting this information back to their financial folks.

Sue        So, what is the real story?

Donna   CMS has indicated that it wants to replicate the MS-DRGs, so if a claim is coded natively in ICD-9 and then again in ICD-10, the resulting MS-DRG should be the same in most cases..  There are a few exceptions to this based on changes to specific coding of some diagnoses or procedures in ICD-9 versus ICD-10, as well as a few coding guideline changes.

Sue        Like the coding guideline change for reporting anemia due to a malignant neoplasm? In ICD-9, this is reported using anemia as the Principal diagnosis, but in ICD-10, the malignant neoplasm is reported as the Principal diagnosis.

Donna   Right.  And the other changes involve CC and MCCs that have changed from ICD-9 to ICD-10, like malignant hypertension is a CC in ICD-9, and in ICD-10, malignant hypertension is coded the same as benign hypertension with all reported using the code I10. So in ICD-10, the I10 code is no longer a CC.

Sue        I’ve also heard that many of the surgeries are changing and that this can be a larger impact than a change in a diagnosis.

Donna   Remember that speaker I mentioned earlier? He indicated there would be a huge shift in Medicare payment for cardiovascular procedures. In reality, that wouldn’t happen if you assigned a code natively in ICD-10. It might appear to be the case if you use the GEMs to translate rather than actually coding the case natively. The point that the GEMS should not be used for coding can’t be stressed enough.  (sighs) We really need someone to provide accurate information about the true financial impact of ICD-10.

Sue        Well, Donna, I think you just did.

Sue Belley is a Project Manager with the Consulting Services Business of 3M Health Information Systems.

Donna Smith is a Project Manager and Senior Consultant with the Consulting Services business of 3M Health Information Systems.

2 responses to “HIMagine That! The Real Deal with ICD-10 Financial Impact

  1. Gary W. Lucas (Atlanta, GA)

    Thanks for the article! I also feel that many are using scare tactics to get people’s attention (and consulting business) related to the need to proactively plan for ICD-10′s impacts. I would pose, however, that the overall financial implications of ICD-10 are not just impacted by the payment side of the house – a la “budget neutrality” from state/federal payers. On that note briefly, I assume there is no legal standing that mandates that 3rd party payers adopt this strategy and people should prepare.

    Even if we 100% hold firm to the fact that all payments are within 1-2% of existing rates – what about the cost side of the house? If it takes longer to get a claim coded and billed, training costs are higher, physician documentation queries skyrocket, dual coding for X months, the IT impact of running two concurrent systems, potentially slower internal appeals processes, and less leverage and understanding related to 3rd party payment and contracting issues, and so on — is it really going to be budget neutral? I think not.

    With the increased ability to accurately document via EHRs, the beginning adoption of CACs, higher recognition by healthcare facility leadership of the vital strategic importance of the revenue cycle folks – it is possible we could actually positively (and in a compliant manner) actually increase revenue. Prior to EHR adoption – participating in the PQRS was a very manual process – now I should be able to build it into my work processes. Carriers that are trying our P4P can partner with large, well-integrated, data-rich organizations to more easily show the impact of quality care.

    I’ll jump off the soapbox, but put me on the side of Donna and Sue that the sky is NOT falling and we can come out on the other side of this implementation stronger!

  2. Roland Gallagher

    3M: Please do not believe GEMS that we created, we thought they were right but they are not. Also, this is all hunkey dorey, no dollar impact to hospitals. Just use native coding
    Hospital: But… but… you made us pay big bucks to you to buy crosswalk building and GEMS capabilities? What about that?
    3M: Oh, we were just kidding, forget all that. Native coding is the way to go. Forget all that, and offcourse forget the money you spent on us. If anything, hire us again so we can help you train people for native coding
    Hospital: Huh… so now that smarter people in industry have figured out ways to understand financial risk and start to address it, eliminating you; you are saying all that is just false.

    Bottomline, MCC and CC will be dropped in certain cases and will be gained in others as well. Native coding is great theoritically, but for any of our staffs at our hospital without knowing how much we are losing where, we should just plan on financial surprises and huge denials. 3M should make up its mind and stop propaganda, now that they are being sidelined. For a good reason, our hospital decided to go with other vendors for this very reason

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