50 percent of healthcare organizations stated that they had yet to estimate the ICD-10 impact on cash flow, according to a recent poll conducted by KPMG LLP, the U.S. audit, tax and advisory firm.
Conducted from October 17 through December 9 of 2013, KPMG poll determined that majority of payer and provider respondents had not properly addressed the impact of ICD-10 implementation on comprehensive system testing, determination of impact on cash flow and revenue cycles.
Key Findings
The report did find that majority of payer and provider respondents acknowledged that they had completed an ICD-10 impact assessment (76 percent) and had allocated budget toward readiness efforts (72 percent). Other key findings of the survey include:
- 73 percent believe that the transition to ICD-10 coding would have moderate to severe impact on an organization’s bottom line.
- 45 percent believed that denial/variance management would be most affected in the transition outside of coding and documentation
- Forty-two percent of respondents indicated that they have recently undergone system testing
- One-third of respondents indicated that they are currently conducting end-to-end testing.
- 28 percent) stated that they plan on conducting end-to-end ICD-10 compliance testing, while three percent stated that they would not.
- 74 percent of respondents said that they have yet to or are not planning on conducting testing that involves external entities, such as health plans, providers and trading entities
- 37 percent of respondents said they were unsure of whether they would conduct user acceptance tests
ICD-10 Cash Flow Impact Call to Action
“Successfully managing denials and variance entails a thorough analysis of not just the new codes, but reviewing trends of the previous ICD-9 codes and mapping high volume medical necessity. Organizations also must familiarize themselves with claims rejections and denial representatives under the new process and designing a brand new billing process. It is easy to see why this was a leading pain point among our field,” said Randy Notes, a principal in KPMG’s Healthcare & Life Sciences practice who specializes in revenue cycle operations and improvement.
Survey Methodology:
KPMG LLP conducted a series of webcasts from October 17 through December 9, 2013 and included a series of survey questions pertaining to ICD-10 readiness. Responses were gathered from health plans; healthcare providers, mostly affiliated with hospitals and health systems; large physician groups and nurses. The survey was launched at the conclusion of each webcast.
Image credit: 401(K) 2013 via cc
