Tag: ICD-10

CMS Proposes Fiscal Year 2016 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities

On Apr. 23, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining proposed fiscal year (FY) 2016 Medicare payment policies and rates for the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the IRF Quality Reporting Program (IRF QRP). The FY 2016 proposals are summarized below.

Proposed Changes to IRF payment policies and rates:

Changes to the payment rates under the IRF PPS. CMS is proposing to update the IRF PPS payments for FY 2016 to reflect an estimated 1.9 percent increase factor (reflecting a new IRF-specific market basket estimate of 2.7 percent, reduced by a 0.6 percentage point multi-factor productivity adjustment and a 0.2 percentage point reduction required by law). CMS is proposing that if more recent data are subsequently available (for example, a more recent estimate of the market basket or multi-factor productivity adjustment) such data would be used to determine the FY 2016 update in the final rule. An additional 0.2 percent decrease to aggregate payments because of updating the outlier threshold results in an overall update of 1.7 percent (or $130 million), relative to payments in FY 2015.

No changes to the facility-level adjustments. As stated in the FY 2015 IRF PPS final rule (79 FR 45872, 45882 through 45883), CMS froze the facility-level adjustment factors at the FY 2014 levels for FY 2015 and all subsequent years, unless and until we propose to update them again through future notice and comment rulemaking. For FY 2016, CMS will continue to hold the facility-level adjustment factors at the FY 2014 levels as we continue to monitor the most current IRF claims data available to assess the effects of the FY 2014 changes.

ICD-10-CM Conversion. In the FY 2015 IRF PPS final rule (79 FR 45872), CMS finalized conversions from the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) to the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for the IRF PPS, which will be effective when ICD-10-CM becomes the required medical data code set for use on Medicare claims and IRF?PAI submissions. CMS reminds providers of IRF services that the implementation date for ICD-10-CM is Oct. 1, 2015.

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WEDI Survey Suggests Mixed Industry ICD-10 Readiness

The Workgroup for Electronic Data Interchange (WEDI), the nation’s leading nonprofit authority on the use of health IT to create efficiencies in healthcare information exchange, announced the release of its findings from its February 2015 ICD-10 Industry Readiness Survey.  In its March 31 letter to the HHS Secretary, WEDI reported concern with the current level of industry preparedness noting that many organizations did not take full advantage of the additional time afforded by the one-year delay.

“Unless all industry segments take the initiative to make a dedicated effort and move forward with their implementation work, there will be significant disruption on Oct. 1, 2015,” said Devin Jopp, Ed.D, president and CEO of WEDI.

Highlights from the latest survey findings include:

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TEKsystems: Healthcare IT Leaders Continue to Expect Budget Increases in 2015

IT RecruitingLeading into HIMSS15, TEKsystems, a provider of IT staffing solutions, IT talent management expertise and IT services, highlights results that explore the current state of IT operations at healthcare organizations. The findings identify key objectives and challenges for healthcare IT teams, the skills most needed to meet those demands, as well as expectations for spending and confidence. The data is gleaned from information captured within TEKsystems’ 2013–2015 annual IT forecasts as reported by IT leaders (CIOs, IT VPs, IT directors, IT hiring managers) at healthcare organizations.

Key findings from the data include:

Expectations for IT Budget Growth Decrease in 2015; Yet Confidence Continues to Increase

  • Fifty-one percent of respondents expect their organization’s healthcare IT budget to increase in 2015, down from 68 percent that said the same entering 2014, and returning to levels seen entering 2013 (52 percent). Thirty-eight percent expect IT budgets to stay the same, a significant increase over 2014 (23 percent) and similar to levels of 2013 (41 percent).
  • Sixty-four percent are confident in their IT department’s ability to satisfy business demands in 2015, an increase over the 59 and 58 percent that felt confident heading into 2014 and 2013, respectively. Ten percent indicated they are unconfident in 2015, the same percentage as 2014 and down from 2013 (13 percent).
  • TEKsystems’ Take: Expectations for budget increases began to normalize last year. Following the ICD-10 extension by Congress, IT leaders felt less pressure to seek additional funding to meet those deadlines. Confidence has continued to grow even as budget increases have leveled out, now that organizations have core personnel in place or have developed other plans, such as outsourcing, to address workload concerns.

IT Support Aligns with Business Challenges; Focus Is on Improving Operations and Efficiency

Organizational Challenge 2014 Rank 2015 Rank (% of IT leaders)
Operational issues 2 1 (81%)
Risk management 1 2 (79%)
Revenue 3 3 (67%)
Workforce management 4 4 (59%)
Customer attraction, retention and satisfaction 5 5 (22%)
  • Over the last three years, operationally focused areas (e.g., improving efficiency, reducing costs, improving existing IT applications and infrastructure, and managing risk) have all been cited within the top five business objectives that most need IT support.


Business Objective 2015 Rank (% of IT leaders)
Improving efficiency 1 (49%)
Reducing costs 2 (42%)
Improving existing IT applications and infrastructure 3 (37%)
Managing risk 4 (34%)
Delivering operational results 5 (29%)
  • TEKsystems’ Take: Now that healthcare organizations have identified the biggest challenges facing them in 2015, they are working to align IT support priorities to address those challenges. They have laid the foundations for their large IT initiatives and must shift focus to ensure that they are implementing new projects and establishing best practices in a way that allows them to make the most of existing investments. Increasing efficiency and making the most of these implementations will better position them to take on other projects in the future.

Most Impactful Technology Trends Include Business Intelligence (BI) / Big Data, Security, Mobility, Consumerization and Cloud; Expected Spending Increases Mirror These Areas

  • Over the last two years, healthcare IT leaders listed BI/Big Data, security, mobility and consumerization of IT/BYOD as the top four trends impacting their organizations.
Area of Impact 2014 Rank 2015 Rank (% of IT leaders)
BI / Big Data 4 1 (61%)
Security 3 2 (54%)
Mobility 1 3 (42%)
Consumerization of IT / BYOD 2 4 (38%)
Cloud 6 5 (31%)
  • The majority of healthcare IT leaders expect to see spending increases in security (70 percent), mobility (61 percent), BI/Big Data (60 percent) and cloud (55 percent).
  • TEKsystems’ Take: These expectations for spending increases make sense considering that security, mobility, BI/Big Data and cloud are all cited as the most impactful areas and tend to have some interdependencies. These areas play a large part in how healthcare organizations can increase operational efficiency and risk management.

Hands-on Roles Still Most Critical For Success, Also Most Difficult to Fill with Exceptional Talent

  • “Doers” continue to be cited as the most critical positions for an organization to achieve success. In 2014 and 2015, project managers, help desk / technical support and programmers and developers were cited within the top four roles most critical to enabling success.
Critical Role 2014 Rank 2015 Rank (% of IT leaders)
Project managers 2 1 (51%)
Help desk / Technical support 3 2 (47%)
Programmers / Developers 1 3 (45%)
IT managers 7 4 (40%)
Software engineers 6 5 (37%)
  • In terms of the most difficult roles to fill, project managers rank as the No. 1, climbing two spots up from No. 3 in 2014. Security (No. 2), programmers and developers (No. 3), software engineers (No. 4) and architects (No. 5) also ranked within the top five most difficult positions to fill. BI (ranked No. 11 in 2013) ranks as the sixth most difficult position to fill, down from No. 5 in 2014.
  • More than half of healthcare IT leaders expect salary increases for project managers (55 percent), software engineers (53 percent) and programmers and developers (52 percent). Approximately one-third (34 percent) expect increased salaries for help desk / technical support.
  • TEKsystems’ Take: It’s not surprising that project managers and programmers and developers remain in the top four most difficult positions to fill, as these staff members are in the trenches ensuring that organizations continue to make the most of their IT investments to increase ease of use and efficiency. This value translates into greater expectations for salary increases as organizations seek to retain their developed talent.

Vast Majority Expect Staff Salaries to Rise; More Than Two out of Five Expect Full-time and Contingent Hiring Increases

  • Seventy-three percent of healthcare IT leaders expect overall IT salaries to increase in 2015. The remaining 27 percent expect salaries to stay the same, with no respondents expecting salary decreases.
  • Forty-three percent of healthcare IT leaders expect hiring for full-time IT staff to increase, while 52 percent expect hiring to remain the same. Just 5 percent expect to see a decrease.
  • Forty-two percent of healthcare IT leaders expect hiring for contingent IT staff to increase, while 52 percent expect hiring to remain the same. Only 6 percent expect to see a decrease.
  • TEKsystems’ Take: As more work is done to make the most of investments in BI / Big Data, security, mobility and consumerization of IT / BYOD, organizations will need to at least maintain their full-time and contingent workforces in order to cultivate efficiency and make progress. While retaining top talent by increasing salaries will be a key tactic, new staff will need to be brought on as projects expand.

“Last year, we saw an early surge in the numbers of healthcare IT leaders expecting to see budget increases due to the overarching mandate to meet the former ICD-10 implementation deadline and to get new healthcare technology initiatives off the ground,” said Ryan Skains, executive director of TEKsystems Healthcare Services. “We are seeing those numbers level out as organizations not only make headway on the projects they have begun, but as they increasingly become confident in their staff’s expanding expertise and ability to meet major deadlines. Moving forward, the focus will be on refining systems and processes to increase efficiency and growth opportunity.”

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Physicians Foundation Watch List Finds ICD-10 and Need for Cost Transparency the Leading Issues of 2015

As significant changes continue to reshape the U.S. healthcare system, The Physicians Foundation – a nonprofit organization that seeks to advance the work of practicing physicians and help facilitate the delivery of healthcare to patients – has identified five critical areas that will have major impact on practicing physicians and their patients over the next 12 months. The Physicians Watch List for 2015 is based on the Foundation’s insights into the medical practice landscape, supported by data from its 2014 Biennial Physician Survey of 20,000 physicians and other Foundation research and white papers.

Consolidation Hits the Gas Pedal

An increased rate of consolidation among hospitals and health systems continues to drive smaller, independent medical practices into larger systems. This trend is adversely impacting competition in regions where consolidation is most pronounced, while increasing costs and reducing patient choice. Rapid medical consolidation is also presenting a challenge to clinical autonomy. According to the Foundation’s 2014 Biennial Physician Survey, more than two-thirds of all physicians (69 percent) expressed concerns relative to clinical autonomy and their ability to make the best decisions for their patients. Since the rate of medical consolidation shows no signs of abating, it is imperative that hospitals and physicians work together to ensure that clinical decisions are being made independent of any bureaucratic or organizational pressures that could potentially affect the integrity of medical decision-making.

External Pressures Strain the Physician/Patient Relationship

An inadvertent effect of medical consolidation and the rising emphasis on valued-based payment models is increasing strain on the physician / patient relationship. According to the Foundation’s most recent Biennial Survey, 80 percent of physicians describe patient relationships as the most satisfying factor of practicing medicine. Yet, factors such as growing levels of non-clinical paperwork and rising administrative and regulatory pressures are leading to an erosion of quality face-time physicians are able to spend with their patients.

In addition, these pressures can also limit physicians’ choices in terms of practice type while increasing the amount of time and resources they must spend on negotiating with payers and vendors. As these regulatory and marketplace forces persist, it will be more critical than ever for physicians to identify ways to work with support staff in order to maximize the amount of quality time they are able to spend with their patients.

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Why Is Everyone Outsourcing Medical Billing, and Even If they Are, Why Should I?

Alex Tate
Alex Tate

Guest post by Alex Tate.

Being a diehard Kennedy fan, this is what I’d normally quote to someone purchasing the latest commodity, or acquiring the latest service that everyone is flocking to stores to get – Conformity is the jailer of freedom and the enemy of growth. However, outsourcing medical billing is a different ballgame altogether.  

I’m often confronted by worried physicians who are already overwhelmed by a recent deployment of an electronic health record (EHR) system at their practice when they hear that the clinic next door is outsourcing medical billing. With an expression that could easily pass off as ICD-9 code number 564.0 (a person suffering from constipation), the hesitantly ask me this: “Why is everyone outsourcing medical billing; and even if they are, why should I?”

In response to all those people and all the physicians out there having similar questions, here’s why:

1.     It costs significantly lesser

Medical billing companies charge rates as low as three percent of your monthly collections to handle this process for you. Compare this with the costs of a dedicated medical billing department at your practice, and the difference will be significantly lower.

The salaries of the staff won’t be the only cost there, as they’ll need a room or office space to work in, desks and chairs to work on, dedicated equipment (computers, fax machines, printers), and miscellaneous expenses, such as stationary in addition to utility costs. Now when you accumulate all of this with the insurance packages of these staff personnel and the maintenance of this equipment, you’ll realize that the percentage of collections work out a lot cheaper.

2.     A large staff base

Each practice assigns a specific budget for billing according to which many small and medium sized practices are able to employ one or two billers who handle all of the practice’s billing related tasks.

More often than not, these understaffed and overworked personnel come across situations whereby they have to decide between negotiating over denied and underpaid claims, or moving on to the numerous pending cases. Given their constraints, they choose to move on, settling for lower (sometimes zero) payments on such claims.

The large staff base of a medical billing company will rid you of this problem as they’ll have different personnel to handle different processes, resulting in the maximization of reimbursements.

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How the 2014 Meaningful Use Final Rule is Playing Out in the Field

Tom Lee, Founder and CEO, SA Ignite
Tom Lee

Guest post by Tom S. Lee, Ph.D., CEO & Founder, SA Ignite.

If the few years since the onset of meaningful use haven’t been proof enough, the speed and unpredictability of regulatory change in the last five months has cemented our field’s status as truly not-for-the-feint-of-heart.

Yesteryear’s glacial rate of change in healthcare IT regulation is nowhere to be seen. May 2014 brought both a CMS reset of the ICD-10 transition deadline to October 1, 2015, and a proposed meaningful use rule to enable the use of 2011 edition certified EHR technology (CEHRT) to meet compliance in 2014. The summer then ended with the August 29th finalization of the 2014 meaningful use final rule, the ensuing disappointment that the mandated start of Stage 2 was not delayed and then the swift Congressional response in the form of the September 15th proposed Flex-IT Act to introduce quarterly meaningful use reporting for 2015; enough to spin heads more than once around.

What’s happened in the field since the publication of the final rule among provider organizations bring the phrase “threading the needle” to mind. To further illustrate, we have culled some sample issues from our client base of more than 8,000 providers, across more than 15 EHR brands, and representing numerous combinations of meaningful use stage, payment year and program. These issues, none of which yet have universal and clean solutions, span three areas for provider organizations as seen in the field: 1) properly adhering to the requirements of the final rule, 2) working within the constraints of what EHR vendors can deliver per the final rule’s timeline, and 3) redirecting or pausing organizational momentum for change on short notice.

Regarding the first consideration, note that the final rule requires that an organization attest that it is “not able to fully implement” 2014 Edition technology because of “delays in 2014 Edition CEHRT availability.” Although the rule outlines what does not meet this eligibility test, provider organizations have a persistent question about what documentation and conditions are sufficient to satisfy the test.

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Taming the Revenue Cycle Beast: Leveraging Same-day Billing Strategies to Improve Cash Flow

Allison Errickson
Allison Errickson

Guest post by Allison Errickson, CPC-H, director of coding compliance, ProVation Medical, with Wolters Kluwer Health.

Never before have effective revenue cycle management strategies been so critical to future positioning in hospitals and health networks. In today’s lean environment of declining and unpredictable reimbursement, effective oversight of timely billing practices can simply be a make or break element to success.

Because the revenue cycle is dependent on the time-to-bill for procedures and diagnostic care, healthcare organizations must enact processes to support the most efficient coding practices to speed receipt of payment. Success in this area remains an obstacle for many organizations struggling with how to allocate limited resources to ensure the most accurate coding and efficient turn-around.

Denials plague the industry in terms of maintaining consistent cash flow. Inaccurate or incomplete documentation can impact as much as 5 percent of revenues if a healthcare organization is experiencing denial rates of 25 percent or more. Revenue is also negatively impacted when documentation does not support the highest level of acuity, minimizing reimbursement potential.

While accurate documentation remains an ongoing issue, resource allocation to effectively address the issue will likely be further impacted with the introduction of ICD-10. The industry has been granted a reprieve with the recent deadline extension of Oct. 1, 2015, but the reality of the transition will be coming into focus very soon. Coding challenges will be exacerbated as coders will now have 72,000 unique procedure codes to choose from, increasing the complexities associated with specificity and accurately coding to the highest level of reimbursement.

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Analytics Outweighs Accountable Care, Population Health, ICD-10 as an IT Priority, say Health System Execs

A new survey of senior information technology executives at some of the nation’s largest health systems reveals that their top priority for IT infrastructure investment is analytics – a technology that is central to achieving the systematic quality improvements and cost reductions required by healthcare reform.

Health Catalyst surveyed members of the College of Healthcare Information Management Executives (CHIME), all chief information officers (CIOs) or other senior IT executives of US healthcare organizations. Survey respondents provided a high-level view of the many competing priorities for IT investment that hospital leaders face in the era of “value-based care” – a term describing elements of the Affordable Care Act as well as private industry incentives that reward providers for improving their patients’ health.

Most experts agree that value-based care will require hospitals to use sophisticated analytics to comb through terabytes of clinical and financial data to reveal actionable opportunities for improving quality and efficiency. The survey’s findings confirm that view, with 54 percent of respondents rating analytics as their highest IT priority, followed by investments in population health initiatives (42 percent), ICD-10 (30 percent), accountable care/shared risk initiatives (29 percent), and consolidation-related investments (11 percent).

importance of the IT infrastructure investments

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Healthcare Big Data Defined: Improving Care, Coordination and Coding

Lance Speck
Lance Speck

Lance Speck, general manager of Actian cloud and healthcare, speaks here about healthcare big data and how it can be used in healthcare to improve processes from care coordination to coding for ICD-10. In his day job, he is focused on delivering healthcare solutions to help payers and providers address an estimated $450 billion annual opportunity created through data analytics, ranging from fraud analytics to patient re-admission reduction to staff optimization to accountable care reporting and clinical auto-coding. For more than 20 years, Lance has served in a variety of management, sales and product roles in the software industry including a decade focused on SaaS, cloud and healthcare.

How can big data analytics improve patient care?

According to a recent PwC survey, 95 percent of healthcare CEOs are exploring better ways of using and managing big data; however, only 36 percent have made any headway in getting to grips with big data.  All agree that big data analytics has the potential to improve the quality and cost of care, but many are still struggling with finding the right ways to infuse analytics into everyday operations. Assuming they realize that they already have access to the data, what do they do with it? What are the areas that will have the biggest impact? Where do they start?

Start with the basics. Organizations should focus in infusing big data analytics where a big impact can be recognized. They should ask themselves:

Very early in the process, organizations should address how they plan to incorporate big data into the everyday workflow of clinicians, financial staff and other healthcare stakeholders for organizations to:

How can healthcare providers transition to ICD-10 as simply as possible?

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RAC Audits: Surviving the Inquisition

Michael Murphy, MD
Michael Murphy, MD

Guest post by Michael Murphy, MD, co-founder and CEO, Scribe America.

In May 2014, the Department of Health and Human Services released findings of their most recent study pertaining to reimbursement amounts provided to outpatient physicians for evaluation and management services. The study uncovered that Medicare overpaid outpatient physicians close to $7 billion and most improper payments were results of errors in coding and insufficient documentation (Table 1, highlights the percentage of claims that were wrongfully claimed for in 2010.). However this is not a problem isolated to physicians from the outpatient clinics, as physicians from inpatient clinics could also be found guilty of miscoding and insufficient documentation.

Recovery audit contractors (RACs) were created by the Medicare Modernization Act to evaluate the accuracy of Medicare claims. If a claim is determined by RAC to be flawed for any one of the many different reasons, the claim is denied. Although Medicare’s retrospective program of auditing bills is good, it is not perfect. There has been a huge spike in appeals of Medicare payment decisions, from hospitals mainly, since the introduction of the auditing program and delays in the appeal process has resulted in hospitals facing great financial difficulties as a lot of their funds are tied up till the appeal has been heard.

Type of Error Percentage of Claims for outpatient services Medicare Payments (in Billions)
Incorrectly Coded 42.4% $3.3
-Miscoded 40.4% $2.8
-Upcoded 26.0% $4.6
-Downcoded 14.5% ($1.8)
-Other Coding Error (e.g., Wrong Code, Unbundling) 2.0% $0.5
Lacking Documentation 19.0% $4.6
-Insufficiently Documented 12.0% $2.6
-Undocumented 7.0% $2.0
Overall Gross 61.3% $7.9
Overlapping (6.7%) $2.0
Overall Net 54.6% $6.7

Adapted from : “Improper payments for evaluation and management services cost medicare billions in 2010”

In order to receive reimbursement from Medicare, a physician needs to follow a three-step process: 1) appropriate coding of the service provided by utilising current procedural terminology (CPT); 2) appropriate coding of the diagnosis using ICD-9 code; and 3) the Centers for Medicare and Medicaid Services (CMS) determination of the appropriate fee based on the resources-based relative value scale (RBRVS). It is not surprising that physicians often incorrectly code patient visits and procedures as there exists a truly daunting number of codes from which to choose. Moreover, coding structure and reimbursements schemes are constantly evolving and becoming more complex, resulting in a coding process that is often cumbersome and difficult.

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