Provided By Tim Beldner, Partner, Regional Director at Larson Financial Group

Change and transition have become the norm for physicians recently. In a short period of time, the implementation of the Affordable Care Act, the adoption of EHRs and the testing of value-based purchasing are a few of the ambitious endeavors that have dramatically changed how practices operate and serve patients. Additionally, the implementation of ICD-10 finally occurred on Oct. 1, replacing the existing diagnostic and procedure coding system that had been in place since 1979.

Physician Practice Management

Many healthcare experts cautioned that a new coding system would be too time-consuming and labor intensive for physicians who have already been burdened with additional regulatory requirements. These concerns appear to be valid, as a recent survey by the ICD-10 Advisory Board indicates that hospital productivity has suffered since the changes took effect. However, the American Academy of Family Physicians estimates physicians are only spending about two or three extra minutes on paperwork per patient.

Others feared that the more detailed system of codes would lead to multiple claims being rejected by insurers due to errors or unspecified codes. After all, Medscape estimates there are roughly five times as many diagnostic codes in ICD-10 as there were in ICD-9 on account of their greater specificity about the location of conditions and injuries. However, the confusion has been mitigated by the formation of special teams designed to quickly address issues from clinical, operational and technical perspectives. EHR software has also helped ease the transition for many physicians.

Some are expecting denials to increase gradually as payers become less lenient and flexible in regards to specificity requirements. Medicare announced that it would not deny claims during the first 12 months solely based on precise specificity as long as the code category is correct, and most private insurers have voluntarily followed suit. However, this eventual tightening of standards will likely first occur in the area of pre-authorizations and pre-certification requirements according to Diagnostic Imaging. Physicians should be using the current grace period to master the specificity of the new diagnostic codes and the more detailed chart documentation that comes with it.

For many physicians, the financial livelihood of their practice depends on correct diagnostic coding so that their claims are paid. Vigilance is key. Here are some things to monitor closely moving forward before they affect your bottom line.

  • Review your top 10 codes: In addition to monitoring overall denials, you should regularly run reports on the codes that you bill most frequently because those denials will have the biggest impact on your revenue.
  • Review accounts receivable weekly rather than monthly: It is essential to address denials as soon as they come in to avoid repeating potentially costly errors.
  • Create a cheat sheet: Creating a list of the most commonly used diagnoses used in your practice and their corresponding ICD-10 codes can save you the time of searching for them which can hamper productivity.
  • Schedule audits: Schedule audits once every three months to assess the accuracy and specificity of your coding and documentation.
  • Continually train coders: Advanced classes and classes for specialties are available which can be effective towards addressing any drop in coder productivity.

If possible, you want to make sure you have the financial cushion to cover a potential increase in denials, especially if you have been counting on leniency from payers. Once enough data is collected, payment policies are likely to change and conditions that were covered before may not be covered any longer. You should designate a member of your billing staff to check for policy changes on the website of every major payer at least once a month.

The stress physicians feel regarding ICD-10 is understandable, but this transition could be a major milestone in our evolving healthcare delivery system. The Coalition for ICD-10 is confident that these more modern codes will ultimately result in the availability of better healthcare data, which can be leveraged to improve patient outcomes and safety, lower healthcare costs and move forward with population health initiatives. Other advantages include greatly improved disease management, and the ability to detect new and emerging health threats, like Ebola.

As 2016 unfolds, physicians will need to track the key financial and operational performance indicators of their practices and take timely, decisive action if necessary. In addition, it’s also important to monitor the morale of employees most impacted by the change and show leadership and support. The ultimate objective is to keep the focus on patients and their care to ensure that they are not impacted by the transition to ICD-10.

This article if for informational purposes only and should not be construed as tax advice. Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.