ICD-10 metrics: Are we looking at the right indicators?
This week, I observed we didn't have enough data to judge whether the ICD-10 transition was successful or not. Basically we need more data to know that.
When we think about that data, we tend to think about how long it takes to process medical claims and get reimbursements. But that's not all that's important. Jason Williams, Vice President of Business Strategy and Analytics at RelayHealth, writes about tracking key performance indicators (KPI) for Revenue Cycle Insights.
Days to final bill (DFB) and Days to payment (DTP) are time-based KPIs, according to Williams. On this site, we have considered these KPIs to be part of productivity analysis and key to a medical practice's survival. "These timing measures provide us a general idea of what is happening and changing with our claims submission and the adjudication processes," he wrote.
But it also is important to monitor revenue-based metrics:
- Denial rate helps identify shifts in denial patterns. The problems it reveals can be addressed immediately.
- Reimbursement rate is a long term KPI indicating reimbursement related to a corresponding medical procedure. This may not be significant for an individual claim but can be over time.
The denial and reimbursement rates are important because there is a theory that ICD-10 coding is a way for healthcare payers to reduce reimbursements. That can't be denied. No one in government or private industry is saying we need to spend more money on healthcare overall. (Note: This does not include medical research for specific diseases.) ICD-10 coding will emerge as one of the tools to do that.
Chris Nerney, Managing Editor at Revenue Cycle Insights, spent some time summarizing revenue concerns at a panel that was part of Revenue Cycle Solutions Summit in Atlanta. "Hospitals are going to see decreases from the managed care players," said Mike Simms, vice president of Revenue Cycle for Cone Health.
But Nerney does there is hope. To fight back, Joe Nichols, principal of Health Care Consulting, said healthcare providers need to use data:
"If we have better data we can truly improve the cost effectiveness of data. The folks that have the most control over the data, the most accurate data, will win."
Accurate ICD-10 data can identify process flaws and problems that affect a medical practice's revenue cycle. But it also can identify high-value diagnoses and treatments.