How Deep is Your War Chest?

by James Dunnick MD FACC, CPC,CHCQM

Everyone is aware of the affordable care act popularly called Obama care. The health care industry is well aware of ICD 10 and its implementation date of 10/01/14. Most hospitals are in some stage of readiness, most determining now that they are not quite as prepared as they had hoped.

The problems are at several levels.

First, teaching ICD 10 to coders requires qualified and experienced instructors. But at least coders are certified with ICD 9 and have a basis of understanding. Teaching ICD 10 to physicians requires qualified and experienced instructors (preferably physician instructors for audience acceptance). But the physician teaching of ICD 10 is complicated by their absence of a basic understanding of ICD 9.

Second, electronic health records are becoming mandatory, but electronic health record systems have not yet matured to becoming error free, being user friendly, or provider time conserving rather than time expending.

Our third problem is that administrators, being neither coders, providers, nor electronic health record users, do not understand how difficult the tasks facing their team truly are.

Payers represent our fourth area of concern. They too must have internal education and staffing changes to be prepared for this transition. They will not all be ready on time and their system problems will surface in October as they go live.

Payers will not reimburse claims as timely as before. Not trying to hold back, just not able to process claims and clear claim questions in short time frames. In the early months of the payer learning curve, hospitals and providers will have a longer claim submission to claim reimbursement lag time.

Our fifth, and one begins to see this domino effect, is the accounts receivable for the hospital and the provider. Their 0-30 day, 31-60 day, 61-90 day accounts will all shift to the right with an unprecedented number of claims appearing in the greater than 120 day due columns.

As accounts receivable shift, day to day and payroll cycles become in jeopardy. The physicians pay staff before themselves and miss their own draws. Hospitals look to their foundations to cover payment cycle shortfalls.

The solution is not in the hands of any one group, though the hospital administration has the most ability to influence the future. They have the most at stake with the risk of needing to use work force layoffs, equipment improvement spending freezes, and delaying competitive expansion plans to be able to keep revenue cycles in the black.

How administrators, CEOs relying on CFOs, accomplish this is thru education. Teach the providers why they want to learn and explain their stake in the process. With this motivation now present, quickly teach providers how to maximize (not abandon) their own electronic health record system and understand how ICD 10 applies to them. Show how they are an important part, though not the only part, of a process that extends from providing care to reimbursement for that care.

Education takes time. Learning requires practice. Time is short.

How deep is your war chest?


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