As the October 1, 2014 deadline nears for the implementation of ICD-10, a new survey shows that physicians and health plans may be largely unprepared for the disruption that change will bring to their cash flow.
As the October 1, 2014 deadline nears for the implementation of the International Classification of Diseases-10th Revision (ICD-10), a new survey shows that physicians and health plans may be largely unprepared for the disruption that change will bring to their cash flow.
The survey found that although 76% of respondents had completed an ICD-10 impact assessment, about half of respondents had not determined what effect it will have on their revenue cycles and cash flow.
KPMG LLP, a tax, audit and advisory firm, conducted the survey at the end of a series of webcasts from October 17 through December 9, 2013. The respondents were from health plans and healthcare providers at hospitals and group practices.
“As October 1 inches closer, healthcare organizations have their work cut out to properly absorb the impact that the new coding will have on their businesses,” Wayne Cafran, an advisory principal in KPMG's Healthcare & Life Sciences practice, said in a press release. “A full 50% stated that they had yet to estimate the new coding system's impact on their cash flow. With estimates by those who did measure the impact tallying anywhere from $1 million to more than $15 million, healthcare organizations are in for a rude awakening when they finally realize what the new standards will have on their bottom lines.”
About 45% of survey respondents said that denial/variance management would be most affected during the transition.
But many health plans and providers have already begun testing. The survey found that 42% of respondents had already begun testing their coding systems. The Centers for Medicaid and Medicare Services plans to conduct front-end claims testing during the week of March 3.