ICD-10 Implementation Approaches: Penny Wise and Pound Foolish

Some health care organizations are now looking for “…A good ICD-10 project manager…” to lead the ICD-10 effort.   This appears for some to be budget driven.  Rather than retain an outside consulting firm, some health care companies want a project manager who can deal with the regulatory, payor and provider contracting, physician outreach experience, medical policy, IT, EDI, medical coding, process impacts, revenue cycle, predictive analytics, workflow, data warehouse, business intelligence, and other areas of this complex mandate while costing less than an outside consulting firm

There are three issues with this approach.  First, we know of no project manager in health care who brings all of these competencies together as one resource.  ICD-10 hasn’t been implemented yet by anyone, and usually a project manager’s role is in part driving to a delivery schedule, not having the regulatory compliance skills for example to know if that schedule is cutting corners and putting the health plan or hospital system at risk.

Second, all of the expertise to successfully transition to ICD-10 does not usually reside within any single payor or provider.  ICD-10 tends to bring new responsibilities to already busy stakeholders, operational, medical and IT resources who are needed to keep the business running.  ICD-10 organization strategy would suggest first determining where you have weaknesses and hiring to those weaknesses, or seeking these resources from outside consulting firms if needed.

Third, organizations that want a project manager and sometimes an inexpensive one at that, risk a much bigger reimbursement or regulatory impact if they get ICD-10 wrong.  For example, health plans who fail to comply risk fines of up to $1.00 per covered life per month.  Hospitals risk a shift of reimbursements that may not be in their favor.  For example, one $800 million hospital we work with determined that it could easily see a minimum of a one percent (1%) reimbursement risk or $8.0 million if ICD-10 is implemented without proper planning.  That cost is so high that the risk that the hospital system would be exposed to called for a different approach.  The hospital has determined that micro managing their recruiting and worrying about saving $15.00 per hour on the right project manager without putting together a team with internal and external competencies would be  a costly mistake.

One of our clients told us that they didn’t need a review of HIPAA 5010 and ICD-10 impacts on their dental insurance business because dental wasn’t covered under HIPAA.  We politely asked if they had heard of the 837D EDI transaction, specifically for dental.  Given that it is an EDI eligibility transaction, their dental business is absolutely regulated under HIPAA.   The corporate attorney for the client as well as the HIPAA expert legal counsel for the client somehow missed this point, clearly stated in Title II of the HIPAA regulations.  While dental was a small part of the overall business, the health plan would have been putting their primary multi-billion business at risk of serious fines had they gone ahead with their plans based on their internal assumptions.

Our approach has been to provide “PMP+P” – project managers with PMP certifications PLUS a team of experts who are fractional resources that can be called upon by the project manager and the client for the expertise needed in the competencies to deal with ICD-10 implementation.   One good project manager can help.  A PM backed by experts is better and more cost effective than worrying about the pennies or on the other hand completely outsourcing something that in the end health plans and providers themselves will be accountable for.  We think this is the best ICD-10 implementation approach.

Michael F. Arrigo

Michael Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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