Countdown to ICD-10 compliance: Why KPIs and provider relations matter

kecia_rockoffIt seems like we’ve been talking about ICD-10 for a long time now and in fact, we have. There are just a few months separating payers, providers — and even patients — from the changes that will arrive with the October 1, 2015, compliance deadline. The limitations of decades old coding will finally give way to a system that more accurately reflects current medical practice. This increased specificity will eventually lead to better medical data, and more precise analysis and predictive modeling, resulting in more accurate quality measures and improved patient outcomes.

With two years of ICD-10 prep time, payers should be aware of where most of the risk is likely to occur, and get those proverbial ducks in a row. The ICD-10 environment is complex, and its impact is likely to be felt across operations, finance and technology systems.

A completely new language for the health care industry.

Since ICD-10 will change how payers and providers talk to each other, provider relations will play a vital role in ICD-10 compliance. Check in with your providers to see how far along they are in their own transition processes. It should come as no surprise they may be slow to break ICD-9 habits. Due diligence is needed to determine hospital and vendor ICD-10 readiness, and hopefully you have action plans already in place to help mitigate risk. Payers will need collaboration and transparency with providers and vendors to ensure that the transition to ICD-10 is a smooth one.

The keys to KPIs.

If you haven’t done so already, determine which key performance indicators (KPIs) will be most appropriate to monitor, and set up relevant baselines. Ideally, KPIs should:

  • Measure what matters:
    • Financial impacts
    • Clinical impacts
    • Operational impacts
    • Member and provider impacts
    • Cross functional impacts
  • Be based on at least one year of historical data
  • Be objective and measurable
  • Consider seasonal shifts and trends

Once you have your KPIs, develop your tolerance bands and impact. Plan for both increases and decreases in claims volumes and pend rates, and identify the amount of change that’s tolerable. Of course, as you monitor your KPIs — whether it’s daily, weekly or monthly — you may find your tolerance levels need adjusting.

For more information regarding ICD-10 compliance, please download our ICD-10 testing white paper.

–Kecia

About the author

Kecia Rockoff, FSA, MAAA, Director of Actuarial Consulting, Resource Optimization Group

Kecia is a Director of Actuarial Consulting in the Payer Solutions practice of Optum. She has more than 22 years of experience in the health care industry managing actuarial and financial processes for both health care providers and health plans.

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