Switch to ICD-10 should prove very costly!

Switch to ICD-10 should prove very costly

By anne
Created Aug 27 2008 - 4:11am

Providers are far from done in their struggles to implement the new National Provider Identifier number, which has proved to be every bit as troublesome as the industry predicted. But apparently, HHS was determined to raise the angst level further. With its recent announcement that it was pushing for an October 2011 deadline for the industry to switch from ICD-9-CM to ICD-10 codes, health organizations are bracing themselves for millions in additional IT and operational expenses.ICD-9-CM codes, which are used for electronic claims processing, remittance, advice, eligibility inquiries, referral authorizations and more, have been in place for 30 years, but most other developed nations around the world use ICD-10 codes. The new code set will allow clinical IT systems to record far more specific and rich diagnostic information than ICD-9 codes, as it contains more than 155,000 codes, while ICD-9 contains only 17,000.As the switch occurs, brace yourself for reimbursement nightmares. HHS admits that the switch--like the NPI cutover--could initially cause significant cash flow problems for providers because of the increased risk of payment hold-ups due to coding and systems problems. HHS is predicting that claims-error rates will rise between 6 and 10 percent, up from a normal 3 percent rate typically seen for annual updates of ICD-9. (If NPI experience is any indication, that's probably a pretty conservative error estimate--so expect significantly worse cash holdups than HHS is predicting.)Meanwhile, as readers know, such a switch will prove to be immensely complex, not to mention quite costly, on the IT front. While estimates vary from one consulting firm to another, HHS estimates the cost of the switch at $1.64 billion industry-wide, including $356 million in training costs, lost productivity costs of $572 million and system change costs of $713 million.

Great press about CASE MANAGERS!

Wall Street Journal

Aid From Unlikely Sources

By JILIAN MINCER
August 24, 2008

When a serious medical crisis occurs, your insurance company may provide more than hospital coverage.

A growing number of plans offer specially trained case managers to help patients during a major illness.

Different from disease-management programs, which focus on patients with a chronic condition such as asthma or diabetes, the case-management services are for patients with costly and complex medical conditions such as cancer or an organ transplant. These managers -- typically nurses -- help patients with everything from avoiding duplicated tests to finding the best-priced prescriptions and other services.

(CLICK BELOW FOR THE REST OF THIS ARTICLE): http://online.wsj.com/article/SB121954162768766735.html?mod=dist_smartbrief

AHCCCS Numbers Jump

Arizona's Medicaid population has grown by 56,500 people over the last 12 months.
The number of enrollees in the Arizona Health Care Cost Containment System, the state's Medicaid health care program, stands at 1.12 million, up 5 percent from August 2007. That comprises nearly 18 percent of the state's 6.3 million residents. Another 1 million Arizonans do not have health insurance, according to St. Luke's Health Initiatives.
Sixteen percent of Maricopa County's 3.8 million residents are enrolled in AHCCCS.

2nd Article in RACS Series!

RACS and Case Management: Medicare Patients Can’t Be Pushed to the Bottom of your Priority List Anymore

August 15, 2008
By Randi Ferrare
for the Arizona Case Management Blog

If your hospital is as typical as the majority of the hospitals across the country, your Case Management department may be engaged in the preparation for RACS because of your involvement in the appeal process. However, if this is the only role your organization thinks Case Management can play, that could cost your organization millions of dollars.

During the 3 year RAC demonstration project, CMS had an overwhelming 40-45% denial rate. 99% of those denials were categorized as either services that could have been rendered in an outpatient setting or the inpatient stay was not medically necessary. When it came down to it: the denials were for unnecessary hospitalizations.

Unlike the demonstration project in Florida, New York and California, the new yet-to-be released CMS RAC contract will have a provision that the RAC is only allowed to ask for medical records for patients that had an admit date of October 2007 or later. This creates an opportunity to do a stellar job concurrently while the patients are still in-house.

Case Management needs to treat Medicare as they do managed care. The days of reviewing Medicare charts every three days are gone. Chart review should occur every day, along with making sure that the patient’s care is progressing and moving toward discharge.

So considering that fact, you are probably saying, “Our caseloads are too high to manage that work”. You are probably correct; most Case Management departments across the country are grossly understaffed, sometime with caseloads as high as 40 -45 patients per Case Manager. Not only does that effect job satisfaction and departmental turnover, but it greatly impacts LOS, denials, and patient throughput. All of these key indicators are vitally important to the financial health of the hospital.

You don’t have to be a rocket scientist to realize that you need staff and internal processes that will be able to handle the additional duties and workload that a RAC audits brings.

So, now what? Well, the first step is to engage your immediate supervisor, CFO, CEO - basically anyone that can assist you in hiring enough Case Managers to get their caseloads to a more manageable level of 15-20 cases per manager.

How do you do that? Educate upper management and provide a cost benefit analysis to them that substantiates your need for more staff.

2nd Article in RACS Series coming soon!

Stay tuned for the next installment in the Article series on Medicare RACS. It will be posted to the blog soon!

Steve

Article: Medicare adds to do-not-pay list

By KEVIN FREKING
ASSOCIATED PRESS WRITER

WASHINGTON -- Medicare is adding to its do-not-pay list for hospitals two new categories of preventable conditions it won't cover, a much smaller number than it had been contemplating.
Last year, the Centers for Medicare and Medicaid Services set new ground by determining it no longer pay would extra costs for treating certain preventable conditions, referred to as "never events." An example of a never event is a transfusion with the wrong blood type.

Medicare officials announced Thursday that it no longer will pay the extra-care costs associated with treating dangerous blood clots in the leg following knee or hip-replacement. The program also will not pay extra for complications stemming from poor control of blood sugar levels.

To view the rest of this article click here:
http://seattlepi.nwsource.com/national/1152ap_medicare_hospital_payments.html