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September 24, 2012

ICD-10 Testing Strategies
By Selena Chavis
For The Record
Vol. 24 No. 17 P. 10

As hospitals prepare for the new coding system’s arrival, sound testing strategies will be critical to success.

Unprecedented. That’s how some industry professionals describe the impending impact of ICD-10 on healthcare organizations’ systems and processes. Like the implementation of any new large-scale project, testing will play a critical role in ensuring that the go-live has a minimal effect on patient care and revenue cycles. And it’s hardly going to be as easy as an open-book test, experts say.

“Testing is going to be incredibly difficult,” says Stephen Stewart, MBA, FACHE, CPHIMS, CHCIO, SHIMSS, chief information officer for Henry County Health Center in Mount Pleasant, Iowa, adding that healthcare organizations should not expect that testing for ICD-10 will mirror that which would typically accompany other implementation initiatives. Industry professionals warn that the impact of the new coding system is expected to go much deeper than previous new-system deployment.

“The tentacles of ICD-10 are in many more systems than what hospitals normally deal with when conducting other types of testing,” says Lindsey Jarrell, principal with PricewaterhouseCoopers’ Health Industries Advisory practice. “It’s comprehensive. Even if a department thinks it won’t be impacted, the updates are so large that they change the software in a lot of areas.”

Fletcher Lance, vice president and national healthcare practice leader for North Highland global consulting firm, points out that ICD-10 is expected to impact not only major hospital systems such as HIM, IT, and finance but also ancillary departments such as pharmacy, radiology, case management, and the laboratory.

“It is important that providers understand how those types of services will be impacted. Those systems have to be thought through,” he explains, adding that testing for ICD-10 will be much different than what might happen with a deployment such as a patient accounting system. “Those organizations embracing ICD-10 understand that testing is key to success.”

Specifically, Lance and North Highland have worked with clients to identify more than 50 applications and solutions impacted by ICD-10 and defined 13 remediation projects based on key points common among software products. They also have established an overall corporate IT response strategy, including timelines, resources, and work effort for each remediation project.

For some hospitals, the postponement of the ICD-10 go-live date to 2014 is a welcome relief to a full plate of other IT-oriented projects vying for financial and staff resources. “There are a tremendous amount of competing priorities. Many hospitals are still trying to meet meaningful use deadlines,” Lance points out, adding that since meaningful use deadlines will impact revenue dollars sooner than ICD-10, it becomes the focal point. “You can imagine who wins.”

Even against competing priorities, Stewart believes the decision to delay ICD-10 has done a disservice to much of the industry because there is a sense of diminished urgency. “I don’t feel the sense of urgency that should be out there,” he notes. “There are those who are still hoping it will go away.”

For those hospitals embracing the ICD-10 reality, Jarrell says most are forging ahead with a solid testing strategy. “They’ve come to the realization of just how invasive ICD-10 codes are to their environment,” he notes, suggesting that the testing process should be ongoing starting in October.

In fact, that’s the date Henry County Health Center hopes to kick off its testing initiatives by submitting dummy claims. Stewart says the health center’s vendors have made a commitment to be ready. From there, it’s a matter of spotting weak points in the system. “I think what we will discover is where our documentation deficiencies reside,” Stewart says. “Hopefully it will serve as a wake-up call to our physicians.”

Vendor and payer readiness are key components for making the puzzle pieces fit together during the testing phase. A 74-bed community-based health center, Henry County’s current payer mix is made up of 50% Medicare, 14% Iowa Medicaid, and about 25% Blue Cross Blue Shield of Iowa. With only three primary payers to consider, Stewart says the facility may be in a much better situation than some hospitals due to the fact that this group of payers appears to be more prepared for the ICD-10 transition than most.

While most vendors initially made the commitment to be ready for testing by this October, Stewart points out that the deadline’s delay has changed the urgency. He believes this shift in attitude is a mistake. “It’s still coming, and it’s still going to happen,” he says. “I know some organizations that haven’t even done an analysis of where their problem areas are. How do they know if their vendors are ready?”

Types of Testing
According to Lance, a well-conceived ICD-10 testing strategy typically entails three components: functional testing, integrated testing, and end-to-end testing. “There is a testing plan that will need to be developed that outlines each of those areas,” he explains. “And it certainly can’t exist in a vacuum. Clinical and technical people have to work together. There is no way to be successful without a systematic approach.”

Functional testing refers to testing that ensures software components are working correctly. Data or input are fed into the program, and the output is examined. In the case of integrated testing, testing is completed to ensure that the combined parts of a software program function together correctly. As vendors begin sending updates for ICD-10, integrated testing will be a critical piece of the preparation process. With end-to-end testing, a complete software environment is measured against real-world use.

Jarrell, who suggests that the testing process “needs to be focused with a lot of controls,” points to the need for dedicated and unbiased personnel, a well-defined set of processes and procedures, a problem identification tracking process, and a method to analyze “why a problem has a significant impact or why it doesn’t.”

Hospitals should be measuring their results and outcomes throughout the testing process, he adds, pointing to a “defect management process” that reveals trends over time. Another consideration is to establish an operational dashboard in relation to ICD-10 before the go-live to ensure controls are in place after the testing phase.

Essentially, the testing process comes down to ensuring the efficacy of the applications and systems, documentation matches a patient’s care, and coding accurately reflects treatment. Stewart adds that the process also needs to ensure a hospital gets paid correctly according to its contract. Because payer requirements vary, rounds of testing will have to be conducted by payer class.

“Our plan is to take some live claims and process them both ways—ICD-9 and ICD-10,” Stewart says, adding that through this process, Henry County Health Center hopes to determine the real-life impact on resources. “Testing will allow us to gather metrics of the impact of ICD-10 coming out of the block,” he says. “What does it take to get a batch of claims out the door under the new process?”

Stewart notes that 20% of the ICD-10 codes often represent 80% of a healthcare organization’s volume. Since hospitals are not going to have the time or resources to test all 141,000 new codes, he suggests starting with a commonsense approach to identifying the codes that really impact the bottom line. He says looking at past claims or determining the highest chargemaster charges easily can accomplish this calculation.

Lance says North Highland has developed a set of “codes that matter” to create an efficient course of testing. Following a detailed analysis, the consulting firm determined that there are about 350 codes that “really move the needle” in a hospital. From those 350 codes, hospitals can then determine the most applicable for each specialty. “This simplifies it,” Lance explains. “All of the resources can then be grouped in an efficient way.”

Testing Frequency
The rate of testing will essentially be driven by the number of updates coming from any given vendor, Jarrell notes, pointing out that most large organizations will have multiple software updates coming from multiple vendors.

The frequency of testing also will depend largely on how a healthcare organization approaches its IT infrastructure: best of breed or a complete, integrated system. When an organization takes a best-of-breed approach, it purchases software from different vendors based on the best applications available on the market. Each of these applications is then integrated to create a complete system.

Jarrell says that organizations operating under a best-of-breed infrastructure will require more testing. “It gets to be real challenging when you are working with multiple vendors,” he says, adding that in the case of testing, a single, comprehensive solution poses less pain points. “For example, a client using Epic will likely test less frequently.”

Dwindling Resources
Lance says the current strain on resources is one of the greatest challenges that healthcare organizations have faced in more than a decade. “There are so many plates currently spinning in the clinical space,” he says, pointing to the sheer number of regulatory initiatives demanding attention. “All of these macro factors are hitting hospitals at once.”

Most hospitals lack the ability to identify a dedicated testing team, according to Jarrell. “It’s a real challenge for providers to dedicate the right resources. You want your best people involved in testing,” he says. Because of this challenge, Jarrell says it’s not uncommon for hospitals to enlist the services of a third-party testing center.

Because testing will require codes to be entered twice—once for ICD-9 reimbursement and once for ICD-10 testing—the most obvious drain on resources will occur in HIM. “That’s going to tax coding resources considerably, and it’s going to cost us some overtime,” Stewart says.

Jarrell agrees, adding that in the last three years, HIM professionals have become somewhat scarce, and it is only expected to get worse over the next year. Hospitals may feel competent about technology, but HIM resources will be limited both from an in-house and a third-party consulting standpoint.

Expect the Unexpected
Even with a solid testing process in place, Stewart points out that hospitals can test only the viability of the process, not the outcome. “The wild card variable is that you still don’t know what the payers are going to do with it,” he says. “Fortunately, some of our major payers will be willing to run some test claims.”

Stewart is concerned about when hospitals will be able to receive feedback from payers on how submissions will impact reimbursement. Some industry experts believe the detail provided by ICD-10 will enable a higher level of coding, equating to optimum reimbursement. However, others aren’t so sure that will be the case.

“It’s just a new level of complexity that we are putting out to the payer. Once payers get the data, they are not looking for ways to pay us more,” Stewart says. “When we get some history, that’s where we’ll see the changes in reimbursement. I think the change will be more apparent a year or two down the road.”

— Selena Chavis is a Florida-based freelance journalist whose writing appears regularly in various trade and consumer publications covering everything from corporate and managerial topics to healthcare and travel.