The Gathering Storm | SunTrust Resource Center

Cash Flow

The Gathering Storm

Despite repeated delays, ICD-10 will eventually become a reality

It’s setting up to be a modern day version of Aesop’s “The boy who cried wolf!” After three implementation delays by the Centers for Medicare & Medicaid Services (CMS), many healthcare providers are looking at the new October 1, 2015 implementation date with a healthy dose of skepticism. While this jaded response is clearly understandable, it’s also worrisome in that lack of advanced preparation for ICD-10 could be nothing short of cataclysmic for your practice.

Make no mistake about it, whether or not the industry receives another temporary reprieve or not, at some point in the not too distant future, ICD-10 will go into effect and it will change everything. It’s going to touch not just every physician, but every single person in your organization – the way you bill, the way you code, and the way you post.

Harken back to the furor that surrounded 2012’s HIPAA 5010 implementation. What was solely a transaction standard change, intended to begin preparing the industry for ICD-10, and with no anticipated payment delays wreaked such havoc that some practices were poised on the brink of filing for bankruptcy. In many instances, providers were not receiving payment from payers for 90 days or longer. Firms were scrambling to establish lines of credit to weather the storm, and some smaller practices were unable to pay their employees because of the lack of cash flow. Payer systems simply weren’t fully ready, they weren’t fully tested, and as a result they pended claims and weren’t making payments until they could figure out how to fix the systems.

Now, take that scenario, multiply it by a factor of ten, and you have some semblance of an idea as to the far greater magnitude of changes associated with ICD-10 have the potential of being. And while this may sound a bit alarmist, make no mistake that the projected costs and delays are significant. It’s not merely that the number of codes will increase from 17,000 to 140,000; it’s the corresponding rise in costs, anticipated increase in denials, decrease in productivity and payment delays that also have to be considered. The latest 2014 data suggests that:

  • The average annual cost of running a post-ICD-10 practice 
    will be 3X what it cost in 20081
  • The expected number of denials will also triple1
  • Staff productivity is expected to decrease by 30% to 50% 
    and will take upwards of a year to rebound to 90%1

Healthcare providers can establish robust lines of credit well in advance of ICD-10, knowing that inevitably there are going to be payment delays until systems are fully tested.

By postponing implementation for a year, CMS is affording healthcare provider organizations a short window of time to focus resources on projects and initiatives that will serve as a critical foundation in advance of ICD-10, such as payment automation and reconciliation solutions like SunTrust’s eClaim Revenue Gateway®. And a great many providers are already invested a considerable amount of time and money and time in preparing and testing automated systems.

The bottom line is that eventually ICD-10 will arrive. In the interim, your goal should be to fix as many things internally as you can, so that when the time does come, you’ll be better prepared and able to re-allocate human resources to the implementation.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Related

Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at www.suntrust.com/investmentinfo.

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.