ERM News - Enterprise Risk Management (ERM) and the ICD9 to ICD 10 Conversion

Over the past several years, the healthcare community has been gearing up for conversion of the International Classification of Diseases, Ninth Revision called “ICD-9”, to the Tenth Revision called “ICD-10”. The Centers for Medicare and Medicaid Services (CMS) announced recently that they will be implementing the ICD-10 standards on 10/1/15. So what are organizations doing now?

Over the past several years, the large health insurers have spent millions of dollars testing duplicate systems to ensure a framework of cost neutrality. Providers have done the same for their billing and revenue programs. From what has been observed to date, all industry participants will have a lot of work to accomplish over the next few years to ensure cost neutrality and containment.

So, what are organizations doing now? The focus for ERM programs is to employ dedicated technology and teams to predict and manage legacy and chronic claims during the ICD-9 to ICD-10 conversion.  Why? Because it is generally known that 5% of the claims (legacy and chronic) of any health, disability, or casualty program represents over 50% of the costs. The best way to maintain a "neutral" environment will be to predict, benchmark, and manage these claims utilizing both the ICD-9 and ICD-10 standards until enough institutional experience is gained to have confidence in the new standards.

With an entire industry trying to adopt a "concept of neutrality", many insurers and providers are trying to establish operating environments where they can make decisions about future care and cost management. If you are a corporation, third party adjuster, insurer, actuary, or other participant moving toward the new standards of diagnoses and treatments, what should you be concerned about?

Systems –
o   Do you have ICD-9 and ICD-10 "crossover" systems to see the differences in the diagnoses between the two different standards?
o   Do your systems have adequate granularity to assess clinical modifications and procedural classifications?
o   Are there legacy and chronic "flags" for claims that are being processed at the time of the occurrence or admission?
o   Are your systems addressing the clinical and catastrophe risks in an adequate way to match the risk profiles of all participants?
o   Are wellness programs integrated into the clinical systems to address the frequency and severity risks?

Clinical Personnel –
o   Do you have a data-driven, multi-disciplinary team which monitor and address the predicted legacy and chronic claims at the outset of the occurrence or admission?
o   Are there adequate team and outside resources to address specialty claim risks?
o   Are your resources adept at coordinating care for the duration of the case?
o   Are all team members working together to address appropriate care in a cost effective manner?

Management –
o   Is there a culture of education, training, confidence and support for the team's work?
o   Have the efforts been financed in a way that support a long term vision of cost containment and control?
o   Are all stakeholders committed to understanding and supporting the objectives of the transition project?
o   If and when disagreements arise in the process of reviewing and managing the differences in the standards, is there an expedited adjudication process of decision making so that the claimant or patient is not adversely affected by time delays?