In the 1996 film Jerry Maguire, an anxious NFL player yells and screams to the titular agent, “Show me the money!” Rod Tidwell’s famous line was his last-ditch effort to motivate Jerry and secure a new contract. In a similar way, today’s hospital CFOs are asking health information management (HIM) directors to show them the financial returns of dual coding as part of their overall ICD-10 preparation plans.
Dual coding yields customized data analytics and reporting and impact analysis for risk mitigation, both financial and operational. Coders, clinical documentation improvement (CDI) specialists and clinicians can receive practical, hands-on training in order to achieve competency. Yes, dual coding delivers tremendous value to hospitals, clinics and physician practices. But there is a cost! And this cost must be justified.
In a follow-up to our article in the August 20, 2013 edition of ICD10monitor e-news describing the concurrent and retrospective approaches to dual coding, this article gives HIM directors the ammunition they need to cost-justify their own dual-coding programs.
Cost-justifying a dual-coding program requires two important ingredients: costs and returns. Be practical, pragmatic and realistic when presenting the benefits of dual coding. Focus your conversation on keeping cash flow positive and accounts receivable in check. Address organizational business goals such as the ability to rework managed care contracts, identify glitches in billing workflow, and avoid unnecessarily missed reimbursement opportunities before Oct. 1, 2014, not after.
Here are 10 more benefits of dual coding to include in your executive pitch:
- Reduces risks of mounting coding and billing backlogs due to coding errors or incomplete documentation
- Minimizes outcome reporting inconsistencies
- Helps ensure interfaces are working properly
- Allows time to alter business processes impacted by system changes
- Strengthens new documentation and coding skills
- Builds speed and accuracy in real-life environments among physicians, coders, CDI and other key staff
- Provides information to develop appropriate staffing budgets for 2014 and beyond
- Targets training and education dollars
- Gives coders progressive experience to provide a more accurate estimate of productivity impact
- Gives your organization the ability to assess impact on case mix index
Know Your Destination
The first step in determining costs for your dual-coding program is to know your destination. Identify the answers to the following four questions before even beginning your dual-coding journey.
- What do we want to accomplish?
- What do we need to accomplish?
- When do we want to get there?
- What resources (people, places, things) do we need?
A baseline gap analysis helps answer these important questions and exposes actual coding and case mix index (CMI) impacts based on existing coder knowledge and clinical documentation – without making any changes. Finally, a baseline gap analysis provides important data for benchmarking, targeted reviews, and targeted education.
Baseline coding time studies should be conducted by work type. This is not a productivity report, but rather an actual measurement of time required to code cases in both ICD-9 and ICD-10. Allow a few weeks between measurements to remove any time advantages for the coder having just read a case. In other words, the chart-read time should be equal for both ICD-9 and ICD-10 time studies. The baseline also gives a starting point to measure graduated increases in ICD-10 coder productivity and code quality. Future decreases in expenses and risk also are calculated from the initial baseline study.
Second, an IT assessment must be conducted with regard to dual-coding capabilities. Here are three questions to ask:
- Can your encoder and core HIS handle dual coding?
- Can any other systems in the infrastructure accept dual coding?
- What systems need to be updated for dual coding?
Finally, while conducting baseline gap analysis, time studies and IT assessments, also perform coder assessments in anatomy and physiology. ICD-10-CM/PCS training should be completed during this time period as well, with in-house ICD-10 trainers identified. With your destination clearly defined, actual costs can be calculated.
Calculate Your Costs
From a cost perspective, keep conversations centered on time, dollars and people. Avoid describing each detail of the “how,” and don’t oversell the promise. And begin determining costs now for your dual-coding program.
Your chosen method for dual coding, concurrent or retrospective, drives cost calculations. Other factors include the types of accounts to be dual coded, volumes of accounts for dual coding, and how much information will be collected, analyzed and integrated into other initiatives. Here is a dual-coding budgeting and staffing example:
If baseline analysis reveals:
Dual coding means a 20 percent drop in productivity for your organization
(and in current production, coders process 10 cases per day),
Then in dual coding:
Coders only will be able to process eight cases per day.
Staffing must be increased to cover the two lost cases per day.
Will overtime hours, additional coding services, or new contractors be required to get the lost cases done? What is the cost of this?
Alternatively, a new coding team could be developed and dedicated solely to ICD-10 dual coding. Budgeting could be directed at FTE additions rather than operating budget dollars for overtime or professional services. While payroll will increase during the dual-coding period, the chances of financial disruption due to claim denials and reimbursement delays are to be reduced in 2014.
Other items to include in your dual-coding costs include ICD-10 books and resources, management staffing time, and software licenses (if appropriate).
Extend the Value of Dual Coding
The final component of a complete dual-coding cost justification should include how the value of dual-coding efforts extends during many years to come. Three areas in which extended value can be achieved are:
Coders: Dual-coding practice equals productivity, accuracy and feedback.
Physicians: Medical staff will adopt new documentation practices before the 2014 deadline.
CDIS: Documentation “must-haves” will become rote. Program effectiveness and financial return are then boosted.
No One Has All the Answers
Don’t fret over explaining dual coding to your boss. And don’t expect to have all the answers. Even Dicky Fox, Jerry Maguire’s mentor, states, “Hey, I don’t have all the answers.”
Lay out all the benefits of dual coding, conduct a thorough baseline analysis, and produce your best cost estimates. Assuming your CFO doesn’t use Mr. Tidwell’s same pressure tactics and abusive superlatives, your dual-coding program will be easily justified and prove its value far ahead of the Oct. 1, 2014 implementation of ICD-10.
About the Authors
Elizabeth Stewart is the corporate director of HIM for HRS. Her areas of expertise include coding, HIM, patient access, and patient financial services, compliance, and HIPAA privacy and security. In addition to her role at HRS, she continues to serve as the executive director of the South Carolina Health Information Management Association.
Kim Carr is the clinical documentation manager for HRS. She brings nearly 30 years of HIM experience to HRS. Kim’s background includes revenue cycle improvement, coding and compliance, coding and CDI education, and denials management in a variety of provider environments and consultant settings.
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