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11/21/2013 Pam Thompson
RE: ICD-10, a Recipe for Disaster? (Neil Hecht, DPM)
ICD-10 has adverse financial consequences well beyond those concerned with preparation for the transition. A Canadian hospital study of ICD-10 implementation reported physician productivity losses of 50% in the first month. A year later, the loss continues, at 19%. It is unlikely that the change-over in the U.S. will fare much better. Anticipation of claims processing interruptions, coding errors and other FUBAR'd but heretofore unknown issues, are estimated to result in at least 5 percent physician income loss, and up to a 30 percent short-term cash flow loss. Of course, income loss is money you'll never see again. CMS estimates that claim denials will increase 100 – 200 percent. Days in A/R (how long it takes to pay you) will increase 20–40 percent. Claim error rates will increase 6–10 percent based on improper coding. The cash flow loss could extend for three to six months. Do you have operational capital to cover a 5 percent income loss and a 20-30 percent cash flow loss for three months? Six months? It will be of great benefit to prepare for the attendant revenue interruption.
Is it possible that this will not occur? That payers will reimburse you just like they always do, promptly and correctly, with no untoward delay, underpayment or calls for additional information? That they won't take advantage of an opportunity to use ICD-10 "problems" to advantage themselves at physician expense?
I've recommended that my clients focus as much on increasing revenue and decreasing costs as they do directly preparing for the Oct 1st transition. A healthy credit line would be helpful.
Pam Thompson, Guerrilla Podiatry, pamthompson@guerrillapodiatry.com
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