ICD-10, Electronic Medical Records, Analytics May Work Only 65% Of the Time – Or Not at All

The Health Information Technology for Economic and Clinical Health (HITECH) Act – part of the American Recovery and Reinvestment Act (ARRA) – provides incentives for the adoption of electronic medical records (EMRs) and related technologies.  The Centers for Medicare and Medicaid (CMS) mandated change to a new HIPAA diagnosis and procedure coding standard, ICD-10 originally by October 1, 2013, and now by a new date specified by CMS.  Many don’t yet see the inter-relationship between EMRs and ICD-10.  Without coordination between EMR and ICD-10 the clinical documentation of medical necessity that determines claims payment, hospital revenue cycles will be at risk, because the EMR is a container for the ICD-10 codes.  And, most health care companies have hundreds of systems that will be impacted by ICD-10.  Some hospitals run on a 2% profit margin.  Payment reform incentives and penalties based on quality measures – reported in the future using ICD-10 – present unprecedented risk and opportunity to this margin.  A one percent shift in revenue cycle management (RCM) reimbursements is worth $2.6 Billion to our health care economy.

Yet today we find that 35% on average of an organization’s current EMR,  supporting analytics, RCM, documentation, and processes will not have the specificity for the new ICD-10 code sets

This means hospital billing and reimbursements, claims auto adjudication rates, and other health care metrics stand to be negatively impacted.  Meaningful use (MU) of EMRs is an exercise in language.  It translates the vocabulary that physicians use into codes – like ICD-10.  Furthermore, the supporting analytics aren’t tuned to report on ICD-10 CM and ICD-10 PCS (CM for diagnosis and PCS procedure) codes.

Clinical documentation improvement (CDIs) aren’t usually geared toward this issue.  ICD-10 brings new “many to many” ways of expressing a fracture of the tibia, for example, and the procedures to treat.  Most hospital systems we work with have many more ancillary systems in radiology, etc. that are also impacted, and the EMR isn’t the core system of record (yet) for everything that goes on in a hospital.

If you ask a hospital or hospital CFO if they are prepared live on 65% of their income, it gets them thinking more seriously about ICD-10.  ICD-10 may cause an EMR and supporting documentation to only work part of the time, or perhaps not at all.  Health care providers should ensure that the EMR vendor is on track toward ICD-10 compliance, however, they should not rely on their EMR vendor as the panacea.  We recommend that health plans and providers seek an independent third party to assess their major HIT systems and vendors.

The ARRA legislation is separate from the Patient Protection and Affordable Care Act (PPACA) being reviewed by the Supreme Court.  At this time, therefore the HITECH Act is not at risk of being rescinded.

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2016 – Arrigo, Michael F – CDI as a Foundation for Value-Based Care. Published by the Healthcare Financial Management Association (HFMA)

Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See https://www.noworldborders.com/news/ and https://www.noworldborders.com/clients/ for more about the company.

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