September 23, 2011
I will always remember the 2000 New Year’s Eve because I was on stand-by for crisis management. I was Director of Public Relations for CIGNA Healthcare of California and like many large corporations, our senior management team was very concerned about 1/1/2000 (better known as Y2K). Fortunately, the IT departments at CIGNA and other large corporations had prepared well and basically nothing happened to any business computers. When we reached 12:01 am ET (9:01 pm PT, thank goodness), everyone breathed a sigh of relief and we could go home.
As 1/1/2012 approaches, some medical group and hospital executives are becoming increasingly worried about the switchover to the ANSI 5010 electronic claims. Here are some of the fears being expressed:
- many medical groups won’t be ready
- some vendors won’t be ready
- health insurers won’t be ready
The switch is complicated and poses challenges because the new ANSI 5010 standards will communicate much more information. They will require the medical group to capture, store and format more patient registration information and more clinical documentation. For example, the authorization and referral transactions will now contain more medical information so that health plans to make more timely and efficient decisions.
In addition, the practice address used for credentialing purposes will now be required on all claims. Some payers have stated they will require both the insurance policyholder’s ID and the treated patient’s ID.
Federal policy makers expect the effort to pay off for both providers and payers. With 5010, more automated processing will be possible for secondary claims. The improved authorization transaction should reduce staff time spent making phone calls to health plans and care managers for treatment approvals. Health plans will be able to populate remittance transactions more accurately and completely, allowing providers to automate the claims payment functions that now are still manual for many provider organizations.
From the cost standpoint, there is good news and bad news. The good news is that the Department of Health and Human Services estimates that the net financial benefits to the healthcare industry for 5010 implementation could reach $38 billion over five years. The bad news: implementation costs will be between $5 and 11 billion.
September 16, 2011
The Wall Street Journal had a funny article yesterday titled “Walked into a Lamppost? Hurt While Crocheting? Help Is on the Way. New Medical-Billing System Provides Precision; Nine Codes for Macaw Mishaps.”
While this article was in the vein of “those crazy government bureaucrats are at it again,” the fact is HIT vendors and hospital leaders are faced with the very real task of complying with the coming ICD-10 requirements.
The CMS deadline to start using ICD-10 codes is Oct. 1, 2013; however, vendors are now working on the new 5010 implementation (deadline Jan. 1, 2012) which must support ICD-10. The HIPAA 5010 has more than 850 complex changes compared with the existing HIPAA 4010 transaction sets.
One industry analyst has suggested that the ICD-10 conversion will be a “make or break” event for smaller EHR vendors because of the major costs involved.
Although physicians and billing staff won’t have to officially comply with ICD-10 for two years, they would do well to learn from the experience of Canada, where nine of 10 provinces switched to ICD-10 in 2004.
The current Healthcare Informatics contains an article from Bruce Hallowell, a PriceWaterhouseCoopers executive, who reports on the Canadian experience with ICD-10 conversion.
In Canada, the billing staff at medium-to-large hospitals experienced a 50% decrease in productivity. At one hospital, one month post conversion, coders were coding at rates under 50%. One year later, they had returned to 81% of their 4.6 charts per hour rate.
One important caveat: in Canada the ICD-10 initiative required expanding to 17,000 procedure codes. In the U.S., the ICD-10 program will contain 120,000 procedure codes, making both the learning and the task itself that much more onerous.
The PWC executive concludes by advising, “It is strongly recommended that managers undertake a bottom line assessment of coders’ current education and skill levels. ICD-10 will require an expanded coder knowledge base, specifically in the areas of detailed knowledge of anatomy and medical terminology; comprehension of operative reports; comprehension, interpretation and application of standardized ICD-10-PCS definitions; and increased interaction and collaboration with medical staff.”
What about physicians? While hospital leadership may not need to provide specific ICD-10 training for them, they should be advised to support billing staff in the conversion effort and to expect an increase in coder requests for collaboration.
September 9, 2011
The McKinsey Quarterly has a new article out on the challenges facing home-care health IT. The article is free with registration.
According to McKinsey, HIT for use in home care settings facing a “daunting array of financial and operation barriers.” These include the misalignment of incentives between payers and providers, the lack (to-date) of a strong clinical value proposition, and the problem of designing attractive devices that patients find easy-to-use.
That’s the bad news. The good news is that home care HIT can not only “bend the cost curve for ever-growing health care expenditures” it also offers the “moral value of enabling older members of society to live in grace and dignity in their own homes.”
I understand the latter very well, having had to move my own mother into a nursing home after she was unable to remain in her own house.
Currently, home care accounts for about 3 percent ($68 billion a year) of national health spending or $68 billion a year with 9 percent annual growth.
The article reports that only certain conditions can be successfully addressed by technology. Medical conditions that can be addressed must be chronic (years, not days); prevented by standardized protocols and “nonintensive,” not requiring round-the-clock attention.
It suggests that diabetes, hypertension, congestive heart failure, chronic obstructive pulmonary disease, and fracture prevention are “high-prevalence medical conditions that satisfy these criteria.”
Another positive indicator: health care reform measures such as ACOs and bundled payments will start to end the current “misalignment” of incentives between payers and providers.
For example, hospitalization reimbursements for congestive-heart-failure patients are currently misaligned with hospital-based technology-enabled home care programs because every patient successfully kept at home means less revenue for a hospital.
The article provides a good overview of a dynamic and visually exciting industry. Every year when I go to HIMSS, I see more and more of the home-care devices. The technology has advanced by leaps and bounds, yet the total market penetration remains frustratingly low. Like so many areas in healthcare IT, “misalignment of incentives” is blocking adoption.