leveraging collaboration to assess icd-10 readiness and

Leveraging Collaboration to AssessICD-10 Readiness and Reduce ICD-10 Operational and Financial RisksMHDC Lunch & LearnDecember 13, 2012

Melinda Reno, Principal, Deloitte Consulting [email protected]

Selma Ferhatbegovic-Fede, Senior Manager, Deloitte Consulting [email protected]

LaTonya O’Neil, Senior Manager, Deloitte Consulting [email protected]

mailto:[email protected]



Copyright © 2012 Deloitte Development LLC. All rights reserved.1 MHDC Lunch & Learn

Discuss benefits of ICD-10 Collaboration

Define how collaboration efforts can generate value

Discuss how and where collaboration fits within the ICD-10 remediation plan

Share initial industry findings on early stage collaboration efforts

Preview Deloitte’s ICD-10 Collaborate Tool

Objectives

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Setting the context: ICD-10 testing objectives

The key objectives of ICD-10 testing are to demonstrate:

ü Technology Validity – Are the technology changes and integration points valid?

ü Payment Consistency – Are ICD-10 claims payments consistent with ICD-9 payments? Are variances understood?

ü Operations Consistency – Are auto-adjudication rates and claims pend/deny/pay metrics as expected?

ü Business Consistency – Are benefits, clinical policies, care management programs, etc. working as expected?

ü External Interaction Consistency – Are interactions and results with trading partners, TPA’s Networks, Clearing Houses, Providers as expected?

The overall objective is to assess that business outcomes in ICD-10 are similar to those in ICD-9; with variances understood and accepted


Testing for ICD-10 presents different challenges, requiring an enhanced execution approach

Key challenges

Key Challenges

ü Dependencies on availability and predictability of external parties

ü Testing scope is significant and must be prioritized

ü Risk to the organization must be fully understood

ü Complexity and potential volume of issue triage will stretch limited resources

2 Risk-Based Approach An approach toward prioritizing each cycle of testing based on what is critical to the business

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Test Data PlanDetermines the volume of test data required and the level coding accuracy necessary in each testing cycle based on focus

TestingApproach Principles

1 Outcomes Focused Iterative CyclesThe lack of delivery predictability can only be mitigated by a flexible, iterative approach

Analysis Based Scenario Definition Defines the key performance indicators at risk for disruption (i.e. financials, pend rates, reporting and reimbursement for government sponsored programs, etc.)

5 Leverage Trading Partner RelationshipsEngage your high priority external partners as soon as they are available and actively include them in testing


Collaboration with external partners can help meet ICD-10 testing objectives

ICD-10 has varying degrees of impact across the entire health care delivery lifecycle

Testing Focus Area Objectives of ICD-10 testing Role of collaboration

Technical validity

Are the technology changes and integration points valid?

Validate the information flow and technical interactions with external entities (e.g., trading partners, TPA’s Networks, Clearing Houses, Providers etc.) is working as expected

Payment consistency

Are ICD-10 claims payments consistent with ICD-9 payments? Are variances understood?

Identify variances seen with pricing vendors that perform pricing functions for out-of-network claims. Insights into potential variances in natively coded claims from providers

Operations consistency

Are key operational indicators like auto-adjudication rates and claims pend/deny/pay metrics as expected?

Review validations performed by claims editing vendors and ICD-10 code related edits that may adversely impact key operational metrics

Business neutrality

Are benefits, clinical policies, care management programs, etc. working as expected? Are provider reimbursement predictive models accurate?

Determine if appropriate triggers get invoked based on the combined ICD-9 and ICD-10 episode of care

Collaboration can help inform of potential operational and financial impacts of ICD-10 transition and validates readiness across the full value chain

How do you jumpstart collaboration?


Jump starting ICD-10 collaboration

§ Employ a risk-based approach to determine effective coverage of core business processes based on operational and financial exposure

Step 1: Define Test Scenarios and Data Needs

§ Review provider network considering criteria such as volume/cost of claims, geography, existing relationship, and coding methodology

Step 2: Identify and Reach Out to Key Collaboration Partners

§ Leverage knowledge of SMEs to input critical test data into test scenarios for risk coverage across the enterprise

Step 3: Exchange Effective Test Data

§ Collaboratively review results of prioritized test scenarios to analyze business outcomes and understand potential variances

Step 4: Execute & Collaboratively Analyze Test Results

Collaboration is an exchange of information between payers and providers to support testing and facilitate a transition to ICD-10


Identifying and prioritizing test scenarios for collaboration testing

To determine the most suitable test data to use, we should consider types of test scenarios planned for external testing as well as what their priority should be

Group 1Critical to Test

Group 2Important to Test

Group 3Could be Deferred

Test Scenarios Grouped by Priority

Test scenario considerations for collaboration testing• Is the scenario assessing information flow and technical interactions needed promptly after the ICD-10

compliance date with external partners (e.g., trading partners, clearing house, etc.)?

• Is the scenario comparing payment consistency with vendors that perform pricing functions for claims (e.g., out-of-network claims pricing) or providing insights into potential variances in claims from providers?

• Is the scenario comparing operations consistency through business processing performed by external parties (e.g., claims editing vendors with ICD-10 codes that may impact operational metrics)?

• Is the scenario comparing business neutrality for areas supported by external parties (e.g., Fraud and Abuse and Care Management triggers for payers, reimbursement expectations for providers)?

Scenario Priority Considerations

Leverage the priority of the test scenarios to select the type of test data needed to meet the objectives of ICD-10 external testing. Collaboration with your partners assists with this prioritization


Selecting test data for collaboration testingIdentifying and prioritizing your test scenarios is critical for understanding the data needs from your partners. Different types of data can be produced and yield varying insights depending on the scope and focus of testing

“Manufactured” Test Data

“Natively Coded” Test Data

• Translate existing ICD-9 claims to ICD-10 claims using CMS GEMs or customized “smart maps”

• Use of automated tools and crosswalks

• Collaborating with partners to exchange ICD-10 data from real medical records and transactions

• Use of clinical coders at existing providers

Test Data Considerations



Group 3Nice to Have

Test Scenarios Grouped by Priority

The use of “manufactured” vs. “natively coded” data for testing should be evaluated and effectively selected based on the need to simulate “close to production” outcomes for prioritized test scenarios


Targeting the “right” partners for collaboration

Evaluating specific components of relationships with partners can help to identify the “right” providers and payers to engage for collaboration

Shared Matching Factors



Group 3Could be Deferred

Volume, type, and dollar amount of claims

Geography

Existing relationship

ICD-9/ICD-10 coding method

State of EMR system

Clearinghouse and 3rd party vendor readiness

Submission method

Payer readiness

Match Partners to Scenarios

Collaborating in strategic alliances to execute prioritized scenarios often leads to meaningful testing and builds confidence for ICD-10 readiness

Provider-specific Matching Factors

Payer-specific Matching Factors


ICD-10 collaboration considerations

ICD-10 is highly invasive to current business models and technology systems - collaboration of this magnitude, on something this complex, requires broad planning

• Understand the risks before starting ICD-10 collaboration

• Impact to external stakeholders and strategic objectives

• Exposure of invalid or inconsistent test results

• Inconsistent collaboration approaches across the industry leading to potential for disorder with partners

• Role for, dependency on, and readiness of other 3rd Party vendors

• Collaboration requires preparedness of internal capabilities

• Confidence on the readiness, reliability and validity of internal systems

• Adherence to security requirements for data transfer, encryption, masking and de-identification

• When selecting collaboration partners, leverage existing trading partner relationships and local/regional communities for identifying and tracking partner readiness

The ability to establish early collaboration and effectively orchestrate collaboration with trading partners will mitigate key risks and reduce potential financial exposure


Collaboration case study: valuable insightsEarly stages of collaboration provided results that were not predicted and indicated that there are implications to ICD-10 that could only be resolved through collaboration.

ü “We will incorporate the cases that has caused us coding issues as part of our training program for ICD-10”

ü “It is taking us about twice as long to code claims in ICD-10 than ICD-09”ü “The collaboration on the financial impact of ICD-10 is of mutual benefit as we assess

and plan for the financial impact of a much more complex and expanded code set”ü “The information has been valuable. It has been interesting to see the impact of both

coder variation and coding guideline changes that will potentially impact our DRG assignments going forward.”

Provider Feedback from Collaboration Findings:

ü Assume only 50% ~60% of the selected hospitals will participate ü Coding claims is labor intensive, ~600 claims take a 3 month turnaround ü Need to be prepared to show “value” to provider for their effort (“what’s in it for them?”)ü Prepare data and choose data elements that help the provider pull Medical Recordsü Bring in resources with DRG grouper expertise, have access to coders

Health Plan Lessons Learned:

Deloitte ICD-10 Collaborate Tool overview


How can organizations simplify collaboration?Collaboration is complex and healthcare organizations are dependent on external parties in the health plan delivery lifecycle for the exchange of test data

Trading Partners

Analytical Vendors

Clearing Houses

Care Management

Rental Networks

Providers

i10 Collaborate Tool can be used to simplify the exchange of data in preparation for ICD-10 readiness

Collaboration is reliant on external partners and is

critical for ICD-10 readiness

Payers


i10Collaborate tool: background and overviewDeloitte’s i10Collaborate Tool assists important collaboration functionality to help our clients make informed decisions and mitigate risk for the ICD-10 transition

i10 Collaborate Tool

Central repository

Data exchange

Native coding

• Assists data exchange of ICD-9 and ICD-10 information between payers and providers prior to their internal systems being ready and capable of testing externally

Analytics

• Serves as a central repository for payers and providers to both store ICD codes and limited claim information for sharing with collaboration partners in multiple exchange cycles

• Provides dashboards with analytical reports and trend analysis for payers and providers to provide insights on coding patterns as well as DRG and MDC shifts

• Allows “native coding” of ICD-10 claims from real medical records that were used to code ICD-9 claims and performs validation of code versions


i10Collaborate tool: framework for effective collaborationThe i10Collaborate tool provides functionality to support payers and providers in collaborating effectively and gaining insights through the multiple phases of the claim adjudication lifecycle in the ICD-10 world

Deloitte Payer/Provider Provider Payer Payer / Provider

• Deloitte sets up the i10Cllaborate tool for the organization and their collaboration partner

• User uploads ICD-9 claims file either via 837 file upload or via upload of a flat file

• Provider views ICD-9 claim and natively codes ICD-10 claim through user interface

• User can also map ICD-9 claim into ICD-10 claim using the GEMs

• Payer downloads the ICD-10 claims and adjudicates them on their systems

• Payer uploads adjudication details

• Tool generates DRG Shift Analysis Report

• Payer reviews analytics and reports and shares with their collaboration partners

Set up i10 Collaborate

Upload ICD-9Claims

Code ICD-10 Claims

Adjudicate and Upload Results

View Analytics and Reports

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Deloitte can provide support and advise throughout many steps of the collaboration process


i10Collaborate cleansing module: payer loaded ICD-9 claimsThe i10Collaborate tool’s system architecture was designed including a cleansing module to reduce risk of PHI exposure outside of the payer and their corresponding provider partner

i10Collaborate

ClaimClaimICD-9

PHI

Payer environment Deloitteenvironment Provider environment

Source claim 837 file (ICD-9)

Cleansed claim 837 files

Recode the claim in ICD-10 using i10

Collaborate

ClaimICD-10

Claim

Claim

PHI

I10

Col

labo

rate

Cle

ansi

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odul

eTest claim 837 file (ICD-9)

Test claim 837 file (ICD-10)

Load claims into i10Collaborate

Store cleansed PHI records

Un-cleanse ICD-10 claim file

Records with PHI Records without PHI

I10

Col

labo

rate

Cle

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Portal with Database and

Reporting Features

“ASP” Model

Claim

Source ICD-10 claim with paid info (flat file)

Process ICD-10 claim and submit results

This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting,business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

Copyright © 2012 Deloitte Development LLC. All rights reserved.Member of Deloitte Touche Tohmatsu Limited

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