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ICD-10 Implementation & Budget An Alternate Perspective. Nicole D. Harper, PhD, RHIA, CCS-P St.Vincent Health - Indiana. Session Objectives. Review Implementation Timeline Outcomes of Implementation Phases Discuss Budget Development & Maintenance

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icd 10 implementation budget an alternate perspective

ICD-10 Implementation & Budget An Alternate Perspective

Nicole D. Harper, PhD, RHIA, CCS-P

St.Vincent Health - Indiana

session objectives
Session Objectives

Review Implementation Timeline

Outcomes of Implementation Phases

Discuss Budget Development & Maintenance

Provide tips on emerging best practices and ICD-10 future success




Phases of Implementation

Organizational Costs


Plan of Action



689 DAYS…

and counting!!!!


it s not just about coding
It’s Not Just About Coding

ICD-10 is more than a compliance activity



More than Just a Larger Coding Inventory of Systems

According to the Healthcare Information Management Systems Society (HIMSS)


Registration and scheduling systems

Advance Beneficiary software

Performance management systems

Medical necessity edits


DRG grouper

Encoding software

Abstract systems

Compliance software

Medical record abstracting

Support Systems

Case Mix systems

Utilization management

Quality management

Case Management


Provider profiling

Quality measurement

Utilization management

Disease management registries

Other registries

State reporting systems

Fraud management

Aggregate data reporting

Clinical systems

Patient assessment data sets (e.g. MDS, RAI, OASIS)

Clinical Systems

Clinical systems

Clinical protocols

Test ordering systems

Clinical reminder systems

Medical necessity software

Disease management systems

Decision support systems

Pharmacy systems


DRG grouper

Conversion of other payment methodologies

National and local coverage determinations

System logic and edits

Billing systems

Financial systems

Claim submission systems

Compliance checking systems


phases of icd 10 implementation
Phases of ICD-10 Implementation
  • Planning
    • Make sure you have the right “people on the bus”
    • Engage your Project Management Office
    • Use standard Project Management methodologies
    • Solid decision-making and escalation process
    • Don’t reinvent ICD-10 planning activities (many industry resources available)
    • Conduct a Stakeholder Analysis
    • Use existing modes of communication
    • Have an action plan before people start working
    • Start outlining your ICD-10 Training Plan



phases of icd 10 implementation1
Phases of ICD-10 Implementation
  • Assessment
    • Carefully select your assessment team
    • Define ICD-10 stakeholders and align expectations
    • Awareness education is needed prior to Assessment
    • Spend time outlining scope and vet with process owners
    • Approach the assessment from a business process workflow perspective
    • Streamline your reporting, create document repository such as Microsoft SharePoint
    • Conduct feasibility studies on opportunities that are strategic to determine if “nice to have”, process improvement for later, or required for compliance
    • Ensure stakeholders are thinking holistically in developing recommendations



phases of icd 10 implementation2
Phases of ICD-10 Implementation
  • Operational Implementation
    • “It’s better to measure twice and cut once”
    • Ensure an integrated project schedule is developed and approved
    • Be persistent in contacting vendors for readiness preparedness
    • Monitor Subcommittee progress
    • Don’t be afraid to escalate issues


phases of icd 10 implementation3
Phases of ICD-10 Implementation
  • Testing
    • Identify existing testing plans that can be built upon for ICD-10 testing
    • Engage stakeholders across functional areas in developing test plans
    • Approach end-to-end testing plans by business process workflows
    • Specifically for IS system changes, vendors are making more than just ICD-10 change and as these changes ripple through the organization the desire is to be proactive instead of reactive


phases of icd 10 implementation4
Phases of ICD-10 Implementation
  • Transition
    • Engage your Audit Committee to perform project health checks
    • Foster collaboration among all stakeholders
    • Joint Ventures – awareness training, meetings, check status of remediation, offer guidance/support
    • Some vendors already have ICD-10 compliant software (start testing now if you can)


icd 10 organizational costs
ICD-10 Organizational Costs

Estimated Organizational Cost by Bed Size

Carmichael, Angela. “ICD‐10‐CM/PCS: What Every Hospital Needs to Know Now.” PowerPoint presentation.

Georgia Hospital Association Audio Conference, Telnet 2673. 12 May 2011


implementation project expenses
Implementation Project Expenses

Sullivan, Tori. "Budgeting for ICD-10: Hardware Costs Should be Peaking Next Year, Contract Support Rising." Journal of AHIMA 81, no.9 (September 2010): 30-33.


budget development
Budget Development
  • What worked?
    • Conduct budget working sessions with individual functional area stakeholders to examine the impact of ICD-10
    • Creation of Capital and Operating budget – multi-year, pre- and post-implementation (including contingencies)
    • Develop methodology for estimating vendor system costs (high, medium, low impact)
  • What didn’t?
    • Absence of sample budget modeling tools
    • Out-of-date industry financial estimates
  • Obstacles to avoid…
    • Tunnel vision (all locations/in-scope areas; e.g., hospitals and physician practices)
    • Not considering potential budget cuts and other impacts
    • Not considering for a disruption to cash flow and increase in expenses


budget maintenance
Budget Maintenance
  • What worked?
    • Develop a budget request/approval process
    • “Accounting for ICD-10 Conversion Costs”
    • A blog has been posted stating the ICD-10 accounting rules; although must follow your organization’s policy
  • What didn’t?
    • Make sure you understand your organization’s accounting rules or your budget allotment could suffer
  • Obstacles to avoid…
    • Not determining how the organization wants to track costs upfront (e.g., sunk costs, estimations, actual, etc.)
    • Not reviewing costs allocated to the project



plan of action alternate perspectives
Plan of Action – Alternate Perspectives
  • Project Management Perspective
    • Program not Project
    • Communication, Communication, Communication
    • Identify Champions across locations and functional areas
    • Conduct education on Project Management Processes
    • Leverage previous work performed to assist with preparations
    • Identify competing priorities and resource constraints as soon as possible
    • Allow associates access to information about the project and a place to submit questions
    • Continually conduct Risk Assessment activity


plan of action alternate perspectives1
Plan of Action – Alternate Perspectives
  • Emerging Best Practices
    • Training & Education
    • Timing of Go-Live
    • Governance Model
    • Clinical Documentation Efforts
    • No Paper Forms
    • Accelerating Movement to EHR
    • Determining Coder Productivity/Capacity Right Now
    • Dialogue with Large Commercial Payers
    • Process key strategic decisions before planning
    • Measurement and tracking of Key Performance Indicators (KPIs) across upstream, midstream, and downstream processes in the revenue cycle


preparation is key
Preparation is Key

Early Preparation

  • A well-planned, well-managed implementation process will increase the chances of a smooth, successful transition.
  • Experience in other countries has shown that early preparation is the key to success.
  • An early start allows for resource allocation, such as costs for systems changes and education, process evaluation and change, as well as staff time devoted to implementation processes, to be spread over several years.

Supporting Continued Urgency

  • Switch focus to Clinical Documentation Improvement
  • Engage Non-HIM Stakeholders
    • WIIFT
    • Report Readiness
  • Use this time wisely!!
    • …keep your foot ‘on the gas’!!


ICD-10 Steering Committee

Comprehensive assessment (including gap analysis and System Inventory)

Roadmap to guide implementation planning

Clinical Documentation Assessment

Claims analysis to identify top impacted specialties

Educational Needs within Organization

Identify top specialties and education to physicians

Implement education/documentation improvement plan for ICD-10 (“ICD-9 improvement”)

Open communication channels with system vendors and payers

Collaborate/combine efforts to maximize resource utilization

Keep yourself educated and in tune with the latest ICD-10 news

Attend industry conferences to collaborate with providers, payers, and vendors

Buy-in from the top-level down throughout the organization

ICD-10 cannot wait for Electronic Health Records & other health IT initiatives to be completed

Start early enough so that thorough testing can be performed

Continued urgency is a must!

There is still plenty of work to do!

What I Know for Sure…


implementation self status questions
Implementation: ‘Self’ Status Questions
  • Do you fully understand the outcome of the impact assessment and are able to initiate resolutions?
  • Do you continue to evaluate effect on data analysis?
  • Are you monitoring Trading Partner readiness?
  • Have you implemented your Training and Education Plan (Awareness)?
  • Do you update and reassess the project as necessary?
  • What are your plans to continuing assessing CDI practices?
  • Have you reviewed your reimbursement impact?
  • Have you developed Risk Mitigation Strategies to minimize transition problems?
  • Have you developed plans to mitigate decreases in productivity and quality?
  • Do you continue to expand the ICD-10 Communication Plan?

AHIMA – 2011 Clinical Terminology/Classification Practice Council AHIMA – 2011 Clinical Terminology/Classification Practice Council


the delay was a gift of time
The Delay was a Gift of Time!
  • Take a deep breath
  • Get organized
  • You CAN do this



thank you
Thank You!!

Nicole D. Harper