Another Year Ahead of Compliance Activities Dominating the Healthcare Landscape

Giancola

Guest post by Chris Giancola, principal consultant at CSC.

Looking into what’s ahead, 2013 will be another year of compliance activities dominating the healthcare landscape. Mandates on the industry, from both the ARRA and ACA, are fully underway and stretching the financial and intellectual resources of healthcare providers and insurers across the country. Here are three major compliance pressures facing the industry this year:

ICD-10 – Though the U.S. Office of Health and Human Services delayed the ICD-10 compliance deadline to October 2014, it did so back in August 2012. This early action by HHS acknowledges the enormous scope of the challenge facing providers, HIT vendors and insurers that stands to impact every administrative process and workflow. Far beyond simply recoding claims, any process involving a diagnosis will materially change because of the higher degree of clinical specificity described by the ICD-10 code set, such as obtaining referrals and lab tests for patients, providing clinical decision support and e-prescribing.

Insurers and providers also will face the challenge of understanding how the code changes may impact their bottom line by determining the financial neutrality of any potential change in diagnoses and payment for treatment of those conditions. Providers relying on vendors with fixed or appointment-style upgrade schedules should consider as early adoption as possible to reduce the potential negative impact of these changes. There also will also be a period of overlap where both ICD-9 and ICD-10 code sets will need to be supported by all participants involved, increasing the complexity of the problems looming on the horizon.

Organizations that are late on their remediation timelines will increasingly look for solutions, like selective outsourcing and alternative technical solutions that will allow them to minimize the implementation risk and operating costs of achieving necessary compliance. But, if the ANSI X12 4010 to 5010 conversion was any indicator, these alternative solutions will be offered at a premium price.

Meaningful Use Stage 2 – Stage 2 makes much of the optional menu set of objectives in Stage 1 a part of the mandatory core set, meaning that those providers who deferred as many of the optional objectives as possible now face challenges in Stage 2 they can no longer avoid. Also, in 2014, penalties for noncompliance with Stage 2 will begin to take effect, and so 2013 will be the year for many providers to buy or build new capabilities, such as web-based and device-accessible portals to satisfy patient engagement objectives and to change clinical workflows to meet Stage 2’s objectives and gather new mandated quality measures.

In Stage 2, Eligible Physicians (EPs) must complete 17 core and three of six menu objectives for a total of 20 objectives. Eligible Hospitals (EHs) and Critical Access Hospitals (CAHs) must complete 16 core and three of six menu objectives for a total of 19 objectives. Though Medicare or Medicaid incentive payments will offset some of the financial impact of implementing electronic health records, the impact to administrative and clinical staff, as well as to previously paper-based workflows, will be nontrivial.

Payment Reform – Many providers have already felt the financial impact of changes to their contracts with insurers that are implementing alternatives to the fee-for-service reimbursement models of the past. Bundled payments to providers for disease-state management will require higher degrees of care coordination and information sharing not only within delivery systems but across disparate organizations and affiliations.

Effectively managing referral networks will be a key success factor in the coming year. New payment contracts also typically require greater degrees of reporting to the insurer to ensure that quality of care is not being compromised, further increasing the burden on providers to gather, harmonize and report on clinical data previously written on paper or buried in unstructured text.

Compliance with these mandates, though not imposed by federal or state regulations, will grow to be a larger challenge as these new payment models mature and they represent a larger portion of providers’ revenue streams.

Chris Giancola is a principal consultant at technology consulting company CSC with a combination of technical skills, project and product management experience, business development successes, and healthcare domain expertise.

 

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