ICD-10 implementation is just 2 months away and it is significantly impacting many practice’s financials even now. A small practice can expect to spend as much as $2,000 or even $3,000 per provider to convert to ICD-10 according to the Professional Association of Health Care Office Management. It is imperative to set aside cash reserves now or apply for a line of credit to help mitigate increased expenses before Oct. 1st and revenue reductions after Oct. 1st.
Some experts are predicting a 30% reduction in revenue for the first 3 to 6 months, but practices should prepare for the possibility of a 50% revenue reduction. In addition, according to Workgroup for Electronic Data Interchange, there will be a spike in denials potentially as much as 200%. In order to mitigate the drop in revenue and sharp rise in claim denials, practices should first clean up their current accounts receivable (A/R).
Additionally, practices should enhance their billing system to give specific alerts for denials and rejections. Because different payers may have different "normal" reimbursement timelines, it is critical to customize alerts for specific payers so that employees can quickly follow up when a claim is not paid.
The increased specificity of ICD-10 will remove some of the guesswork and help reduce under-coding and over-coding problems, which will result in more accurate billing. There is still a lot of work to be done, but in the long run, ICD-10 will help practices get paid more accurately and on time. The practices set to benefit the most from the transition are those presently improving their financial management and ramping up their billing processes.
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Alison Killian is a recent graduate of Grove City College who majored in Business Management and minored in Biology Studies. She is a contributor to Medical Groups and passionate about all facets of healthcare. She plans on continuing work in the healthcare field especially in management. She is very interested in healthcare innovation and finding ways to improve the current system. She hopes to go back to school in a few years to earn a degree in medicine.