ICD-10 Analytics: Keeping your eye on your KPIs

Carl Natale
by Carl Natale

A lot of metrics are going to change come Oct., 1— ICD-10 Day — and they will likely affect a hospital’s entire revenue cycle for a while.

Guest post by Joshua Berman, Director, Analytics and ICD-10, RelayHealth FinancialThere are many variables involved here — and hundreds of factors influencing the key performance indicators (KPIs) for your organization. ICD-10 presents an opportunity for process improvements that will enhance the entire revenue cycle. It’s also a chance to raise awareness of the need to identify KPIs, and to use technology to monitor them.

That’s why I urge hospitals to get a handle on KPIs well in advance of the deadline date. The bottom line: a lot of them are going to get worse, not better, in the days and weeks following the implementation of ICD-10. The trick is to identify the handful of KPIs that will drive your business and to start monitoring and making improvements now.

Hospital leadership should make it a priority to know a few important KPIs. This is good business in general, but more important now than ever before. Many providers are still not tracking their KPIs and that will put them at a disadvantage right out of the ICD-10 starting gate.

Aside from tracking KPIs, providers need to look at benchmarks of hospitals similar in size, region and focus. Identify those KPIs that are trending poorly now and start improving them. This will give you a better understanding of how things will proceed after October 1st.

Among the hundreds of KPIs, there are a few you’ll want to concentrate on before the change-over.

Denials

Know your denial rates. Do you have any benchmarks on how good those rates are? If they’re high, start working to improve them now, because they will go up. For example, your denial rate may be 20% now, but that may rise to 25% to 30% after ICD-10 is introduced because of coding errors. As I’ve said to clients many times, “Buy your credits now for the debits that are coming later.” To improve denial rates, try to identify your categories with highest volume and value, and then investigate the causes of the denials. These efforts will also help you respond better to denials after ICD-10.  

Rejections

Rejection rates may go up for many reasons. Work on improving your clinical documentation and practice coding now to reduce rejections. Here’s another reason to test ICD-10 claims now -- identifying errors in coding and claims that are likely to be rejected.

Time a claim takes to pay (release to payment)

Payers may spend more time looking at why a claim should be paid, which can cause payment delays. According to a 2011 HIMSS article, the nationwide average time for a claim to be paid is 42 days, and that number is expected to increase by as much as 40%. There’s not much a provider can do to influence this rate, as it’s more reliant on the payer’s systems, but avoiding denials due to incorrect codes or information can certainly help.

DNFB (Days Not Final Billed)

From the time a patient is discharged from a hospital to the time the invoice is released, a lot has to happen—and it’s all on the provider. The discharge takes place. The doctor has to write the notes. Coders must code it, and the invoice has to be released. With ICD-10, the doctor needs to take more specific notes and the coder obviously has a tougher job – which all adds up to more time and days not final billed. Hospitals should be looking at their DNFB and how to improve it before ICD-10.

Improving your processes now will put you in a better position after Oct. 1 and you’ll have a better idea of where you stand and what to expect. ICD-10 transition doesn’t have to be a costly burden and reason for your revenue cycle to falter. Instead, make it an opportunity to improve processes, ensure compliance, and get things in place for Oct. 1 — and beyond.

Keep your eye out for my next post on training your staff to prepare for the go-live date.

Joshua Berman, Director, Analytics and ICD-10, RelayHealth Financial