Revenue Cycle Management 101: Impact of ICD-10 Coding in Inpatient RCM

Revenue Cycle Management 101: Impact of ICD-10 Coding in Inpatient RCM

Revenue Cycle Management is a method of tracking patient care episodes from registration to final payment. Briefly, the cycle starts with admission. Care is provided, documentation and charging for services follow, then ICD-10 coding, later billing, and finally collection. Do you need help kick-starting your organization’s revenue cycle management in the right direction? Let YES HIM Consulting’s team of qualified, skilled HIM coding and auditing consultants craft a strategic plan to send your organization’s profits into overdrive. Contact YES today!

We can’t delineate this process without considering Errors & Denials and Claim Follow-up. Much of the revenue is collected on the back-end after discharge. Until the patient pays their bill, vendors, staff, equipment, overhead, etc., get their money through loans or bonds. Hence, there is an incentive to code and bill efficiently to limit the interest paid. Revenue can also be totally lost if contractual billing deadlines are not met, or limited funds are available and paid on a first-come, first-served basis. Don’t be last in line.

Keep Staff Informed of DNFB Rate

When leadership makes decisions assuming that ICD-10 coding impacts the revenue cycle process while only in the coding stages of the process, they miss opportunities to decrease DNFB (discharged, not final billed) days. As consultants, we see that accurate and timely coding is not always enough. Keeping the coding staff informed of the DNFB daily tremendously impacts keeping the unbilled accounts within expected dollar figures. As coded encounters go through the coding and reviewing process, coding managers and staff are essential to the RCM process. Here is a brief overview of how ICD-10 coding can impact various stages within the RCM process. This overview provides a good start for decision-makers to assess and identify key aspects in which ICD-10 coding can improve DNFB.

How ICD-10 Coding Impacts RCM Process

• Clean bills avoid delays with claim rejections. If everything is correct the first time, there is no need to reprocess and rebill the claim. Many third-party payers use DRG (diagnostic-related groups) to determine payment. This system standardizes hospital payments for similar admissions (Pneumonia, Appendectomy, Stroke, Hip Replacements, etc.). Encoders are available to help find the appropriate diagnosis and procedure codes and select the DRG. They also identify age/gender edits, inappropriate principal diagnoses, and assist with sequencing diagnoses and procedures.
•  Scrubbers are billing programs that do a final check before releasing the bill. They can find medical necessity issues and errors in abstracting (procedure date, surgeon, and disposition). Return these errors to coding for correction.
•  Assistance from coding may also be needed in the appeals process of claims rejected by third-party payers. There is a tendency to let these claims sit and miss deadlines for appeal, even if the cause is due to a minor technicality that can be easily corrected.
•  Retrospective Audits can be another tool to assist the revenue cycle process. They provide expertise in identifying coding and sequencing errors that can result in over or underpayment. They can educate the coding team, keeping them current with quarterly and annual updates. They can also reassure against major coding issues resulting in negative third-party payer or regulatory agency actions (intensified review, fines, and/or penalties).

Impacts of ICD-10 Coding Efficiency

Pay close attention to what can impact ICD-10 coding efficiency as well. Resources downtime, staffing shortage, holds for missing documentation, and quality review can affect ICD-10 coding. Investing in reliable equipment and redundancy will limit the first item. Overtime, contract coding, and/or hiring additional staff help manage staffing shortages. Also, monitor productivity. Timely resolution of holds requires identifying the correct party to resolve the hold and making them responsible.

Do you need help kick-starting your organization’s revenue cycle management in the right direction? Let YES HIM Consulting’s team of qualified, skilled HIM coding and auditing consultants craft a strategic plan to send your organization’s profits into overdrive. Contact YES today!