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Reviewing Top 10 DRGs, Codes Insufficient for ICD-10 Prep
By Valerie Rinkle

Hospital executives need to forecast and model ICD-10’s impact on future reimbursement on an individual payer basis. This is particularly important to perform before this summer when providers will be entering negotiations with payers for the calendar year 2014.

Can providers afford to enter negotiations not knowing how a full quarter of their claims will fare under ICD-10? Payers will have the upper hand if providers do not acquire the intelligence to model their historic claims under ICD-10 before negotiations begin.

Hospital executives may not understand how this modeling and/or analysis are possible. Even worse, they may believe that the software deployed in their HIM departments is capable of providing this information. It is important that executives understand that while complex, the data analytics for this analysis and modeling is possible with the right tools.

Often a hospital will ask its HIM department to pull the top 10 diagnosis-related groups (DRGs) or ICD-9 codes for revenue and volume, and analyze how these codes will be represented in ICD-10. The problem is that this approach does not systematically root out the areas of greatest financial risk. To better isolate the areas of greatest risk requires a tool that can apply the general equivalence mapping (GEM) translation maps taking the ICD-9 codes to their ICD-10 code options and the reimbursement maps that show how payers will likely process the ICD-10 codes. Ideally, these maps and analytics are applied to a full year of hospital claims.

The tools should allow knowledgeable coders to view all possible ICD-10 code options and select the ones that are appropriate for the medical staff, services, and documentation. Once the ICD-10 codes are selected, these in turn are mapped to the reimbursement map’s ICD-9 codes. Numerous payers have acknowledged that they intend to process ICD-10 claims by applying the reimbursement maps and then grouping the codes from the maps. This is where significant financial impact can occur.

Executives need to be prepared by asking their major payers who pay according to a DRG-based system whether they intend to process ICD-10 codes using the reimbursement maps from the Centers for Medicare & Medicaid Services (CMS) or whether they have developed their own maps. Several Blue Cross/Blue Shield plans have developed their own reimbursement maps using the CMS maps as a basis or beginning point. The right tool will allow these payer-specific maps to be integrated so that a more refined impact analysis for the hospital’s major commercial payers can be performed.

The issue is that the ICD-9 codes that change most significantly may not be in the top 10 codes, but rather the codes that change are likely very important, as they may be a major complication and comorbidity or a code that represents high severity of illness for risk of mortality scores. Encoder programs used by the HIM department may have the GEM translation maps but not the reimbursement maps. Furthermore, these tools work on a single account at a time and are not capable of regrouping a batch or full years’ worth of claims. Even if you have interfaced the encoder with the decision-support system, this system does not have the reimbursement maps or allow for custom mapping or integrating the other payer’s maps.

The right analytics tool should have the ability to perform analytics on a full year’s worth of both inpatient and outpatient claims, display the translation and reimbursement maps to allow for custom mapping, allow integration of contracted payer maps (if applicable), and provide an embedded grouper to allow regrouping and modeling after custom mapping.

The bottom line? Ensure that your ICD-10 financial impact analysis is not merely limited to a static top 10 analysis.

— Valerie Rinkle is vice president of revenue integrity informatics at Health Revenue Assurance Associates.