Why did 11% of organizations call ICD-10 transition a 'failure'?

Another survey indicates that the Oct. 1 transition to ICD-10 went smoothly for most healthcare providers, but 11 percent said it was a failure, according to KPMG.

“ICD-10 is the healthcare industry’s equivalent to the Y2K changeover in scope and has a profound influence on not only the billing and reimbursement, but the ability to track quality of the delivery of healthcare,” said Todd Ellis, managing director at the tax, audit and advisory firm. “This is an ongoing process, however, and this transition affects not just technology, but finance, employee training, clinical information and other functions in healthcare.”

The first few weeks of the transition have been smooth with only limited technical difficulties, but providers will need to dedicate more attention to the quality and specificity of clinical documentation to reduce rejected medical insurance claims,” said Catherine O’Leary, KPMG managing director, in a release.

More than one-quarter (28 percent) of respondents said their transition was smooth and another 51 percent said they “found a few technical issues but overall were successful.” Eleven percent described the transition as a “failure to operate in an ICD-10 environment.” Responses came from nearly 300 attendees of a Nov. 9 webinar KPMG held on the transition.

The largest challenges associated with ICD-10, according to the survey, include rejected medical claims, clinical documentation and physician education, reduced revenue from coding delays, and IT fixes. The survey found 42 percent of respondents said all of these challenges are part of ICD-10. Only 11 percent of claimants said they did not expect those challenges to arise.

With ICD-10 going live, 46 percent of respondents said they were thinking of pursuing initiatives in clinical documentation improvement, revenue cycle optimization and EHR and IT system optimization. The survey found that 25 percent were pursuing none of those options.

Along with the investment in time, money and technology among healthcare organizations, the transition has been beset by delays impacting the bottom line of many healthcare organizations. “Organizations are beginning to see dips in cash flow due to payers delaying the processing of ICD-10 claims while they ensure their ability to appropriately adjudicate these claims, while others are seeing an increase in claim denials over pre-ICD-10 levels” said Craig Greenberg, KPMG director, advisory. Greenberg’s comments focused on the long-term impact upon profitability that revenue cycle management can have upon providers.

“While there seems to be a fairly smooth transition to ICD-10, the 11 percent of organizations that are struggling need to be helped,” Ellis said. “The communities these organizations serve depend upon their healthcare providers to meet their medical needs and we need to help them through these challenges. ICD-10’s implementation was a lengthy process and unfortunately they will address these issues or face greater competitive disadvantages in measuring quality and reduced cash flow.”