Create a Disaster Plan for ICD-10 and Your Cash Flow

Create a Disaster Plan for ICD10 and Your Cash FlowIt’s less than one year away. On October 1, 2014, ICD-10 will take effect. It’s a major change that is likely to cause any number of snafus, ultimately resulting in major delays in reimbursement to providers.  It’s critical that first and foremost, you do everything you can in your practice to ensure that you are ready. Think of this as creating a disaster plan for ICD-10.

Part of that readiness is to prepare for potential delays in reimbursement. Here are 10 things you will want to look at aggressively over the next few months.

1. Make sure you, your staff and your biller are ready for the  transition. Make sure your billing software as well as your major payers are ready as well. Talk with them, keep the communication lines open.

2.  ICD-10 changes our documentation requirements. It’s time to educate yourself and staff to include the new levels of specificity that are required in chart notes.

3. Now is the time to get your accounts receivable (AR) minimized. Make sure that denials and rejections are worked aggressively.

4. Take a hard look at expenses. Is it possible to renegotiate terms with suppliers to create a better payment schedule?

5. Put off any major capital upgrades for the next 15-18 months unless absolutely necessary.

6. What cost saving measures can you identify and implement in your practice? Where can your practice be more efficient? Look at inventory and assess what your actual needs are. Are there overhead expenses that can be reduced or eliminated?

7. Practices are expected to experience a higher rate of denials. How will you respond? It’s going to be vital that someone stays on top of the accounts receivable. Consider assigning 1-2 people the task of monitoring this carefully.

8. Look at your procedures and financial policies on collecting outstanding balances, co-pays and co-insurance from you patients. Does your staff require training? Are you accepting money in all forms (ie, credit and debit cards as well as cash and check)?

9. Consider seeking a line of credit at your bank that will help you with cash flow shortages.

10. Aggressively build up a cash reserves now. Budget a set amount that is set aside on a monthly basis.  There is a chance that you will need this if/when reimbursements are delayed.

11. Take a good hard look at your payer mix. You may need to make some adjustments now and after the ACA takes effect to ensure that your practice remain financially stable.

While no one knows for certain that claims will be delayed, from past experience with claim denials and system wide changes, we can take an educated guess that we are not looking at 10 day delays.  Practices that are prepared will be able to weather this potential storm.

What steps have you taken so far to be prepared for ICD-10?

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Barbara C. Phillips, NP, FAANP is a professional speaker, author, clinician and business owner who provides business education, resources and support to Nurse Practitioners, Physician Assistants and other Advance Practice Clinicians — both for the employed and self-employed clinician. Additional information about Ms. Phillips is available at www.BarbaraCPhillips.com.

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