Last Minute ICD-10 Thoughts

ICD-10 is upon us.

It is almost here, yes, there will not be a delay. I have had several providers ask that question even as of last week. CMS will go easy on denials and penalties if the first three digits (first one an alpha) are used with less specificity for the first 12 months. 

No guarantee what other payers will do – advice – DIRFT, do it right the first time anyhow!

By now all should have identified the top 20 ICD-9 codes from the billing software and done your cross walk. Recommend that you have a five column spreadsheet handy:

ICD-9   |   Description   |   ICD 10   |   Description   |   Considerations

The considerations are specifics that will help with the cross walk from 9 to 10. Use this in lieu of printing new super bills, laminate several copies and have them all over the office.

Plan on no money in November and December, October should be all right. Get a line of credit and plan on no bonus this year. That may sound extreme but you never know with 650,000+ providers, multiple insurance carriers, labs, imaging centers, pharmacies, etc. all involved something will go wrong. W e hope not too much but be on the safe side.

Cross walk existing patients, those scheduled after 10/1 (remember it’s date of service driven), and new patients with ICD-9 for current billing and then you are prepared for the first visit after 10/1. Some software programs will be a big help.

For authorizations, lab orders, imaging studies, procedures, etc. that will be done after 10/1 talk with the payers NOW about how to deal with them. See who will accept ICD-10 now or when they will accept and if you have to authorize with ICD-10 or if they will allow the ICD-9 authorization that you may already have slide. Not sure I trust anyone so checking is a good idea.

Plan on reviewing your cash picture around 10/20 for Medicare payments since you will be submitting claims on Thursday 10/1 and 10/2 and payments will be made in 14 – 17 days. Plan the same for 11/4 or 5 and 11/20 for your non-Medicare payers based upon payment sequences found in your contracts (check out payment terms, interest payments, etc.

You may do well and have all your testing done, laminated copies, systems in place, providers and staff trained, if so great. Not sure about all those outside of your direct control. Therefore, be cautious and prepared for the worst and hope for the best.

How About Getting Long-Timers Disease? ICD-10 and Cash Flow

The medical practice world is built on a cash basis accounting system. Cash comes it, it is recorded as income, cash goes out  it is recorded as an expense. At the end of the year we take all income out so we don’t have to pay corporate taxes. This creates a void in looking at new investments.

I hate to pay taxes like anyone else except for what I owe to make sure that I get the benefits that I need and deserve, I know we could get into a long discussion about this idea! But that’s not the point. The point is that things are changing and it may be beneficial to think about a long term strategy and long term investment into our business model.

An independent practice can consider switching to an accrual based accounting strategy. We book activities when they occur rather than when they are paid for. If we manage the revenue cycle well, we will know what is coming in and that it is coming in timely, e.g., our days in accounts receivable is less than 30 days. We effectively manage our inventory. Our tax burden is controllable.

Now is a great time to think about this strategy for 2016. Why? Because the ICD-10 conversion will occur in October! I suggest that cash planning for 2015 include NO bonus or significant cash out at year end! It’s not that you will have a problem with managing the change! Half a joke! It’s that the payer is on the other side. So the recommendation is to plan on normal cash in October, but very little in November and December. Plan on cash infusion in January.

Therefore, it you were to start a new program, purchase new equipment, renovate the office, or make some change it should occur in 2016. You may also then elect to move to an accrual based accounting strategy as of January 1, 2016. You then can consider the future with a solid long term investment strategy rather than a year-to-year model.