By now, most health plans have October 1, 2014 marked in red ink on their calendar. That date is well known (and sometimes feared) as the latest implementation deadline for ICD-10, set by the Department of Health and Human Services. The ICD-10 coding system is the first change to the U.S. medical billing and disease-tracking coding system in 30 years.
While most health plans have begun assessing the impact of the transition to the ICD-10 coding system on their organization, many might be overlooking an important component of the transition, the complexity of the testing that will be required. From the delivery of patient care, to the management of claim reimbursement, to the analysis of that information in order to improve health care quality, the ICD-10 migration will touch almost every function, technology, and process of a health plan’s business. All of these components will require testing.
Testing is the process used by health plans to assess operational readiness and red flag any potential issues or unexpected outcomes prior to formal implementation. The best strategy for developing ICD-10 test data combines two distinct approaches. One uses actual experience as the basis for testing by translating historical claims from ICD-9 to ICD-10. This approach provides insight into how historical billing patterns may present themselves in the future and offers a meaningful view into operational impacts such as auto adjudication, population management, and quality programs such as HEDIS and Stars.
The second approach considers how providers will assign ICD-10 codes from clinical records by building a set of test claims that are coded directly from medical records. By using a mixed strategy that combines translation algorithms applied to historical claims with a limited amount of native ICD-10 coding, organizations develop a testing methodology that reflects their own history while providing insights into the challenges that providers will face with ICD-10.
Using these two approaches will provide insight into:
- Operations Readiness: The testing helps ensure all operational areas – including care management programs and authorizations, claims intake and reimbursement, benefit policy assignment and fraud and abuse identification – are ready for use. Payers must ensure that their new systems are able to process these common transactions well before October 2014.
- Claims Transparency: Both payers and providers know all too well how claims denials prolong the time between date of service and reimbursement. This delay makes it difficult for payers to see the actual cost incurred from the claim and obscures reimbursement patterns. During ICD-10 testing, payers can work with providers to look for ways to reduce claims denials and proactively address them.
- Neutrality or Outcomes: Neutrality testing reveals changes in reimbursement or other business rules that are driven by ICD-10. As a result, testing can prevent or predict negative impacts and identify unintended financial consequences so health plans can be prepared. This testing presents an opportunity for health plans to make sure that the information they received from trading partners is accurate and what was expected – and it also allows partners to make sure that the information a payer sends back is correct. This type of testing also can reveal whether the financial outcome is the same in ICD-10 as it would have been in ICD-9.
Despite the importance of these tests, many plans will have difficulty finding the resources – whether financial or human – to take on this task without interfering with the daily work being processed by their current systems. To overcome this issue, testing and operations teams must find solutions to help automate the creation of test data to reduce the manual intervention required to develop the multitude of scenarios required to test all of the changes.
HHS is recommending up to nine months to test new coding systems internally and with external partners. In other words, the time is now for health plans to start preparing for the extensive testing to ensure they are ready for the 2014 deadline.