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Jun 22 2011   9:33AM GMT

Claims processing and ICD-10: Focus areas for payer organizations

Posted by: Jenny Laurello
Claims processing, ICD-10

Guest post by: Baskar Mohan, Director, Healthcare Practice, Virtusa Corporation

The health care industry as a whole is undergoing a transformation influenced largely by technology advancement, strong macro-economic factors and regulatory mandates such as ICD-10. Both the payers and providers are affected considerably as they constantly strive to streamline their operations, reduce costs and improve efficiencies.

Claims processing is one area that requires technology support to automate its processes. As claims processing involves both the payer and the provider, the ICD-10 mandate has further strengthened the case of workflow automation for a payer. The ICD-10 code sets will have a deep impact on the payers’ systems, which require considerable software changes and testing. However, the benefits are manifold including fewer claim rejections, reduced fraudulent claims and accurate payment procedures among others. Based on our experience studying and supporting the automation and ICD-10 migration needs of our customers, we believe payer organizations must take caution as they consider a myriad of issues pertaining to their claims processing operations (in relation to ICD-10 mandates). Below are a few areas payer organizations must carefully consider as they move forward with their migration plans.

  • Dual Processing of Claims – Dual processing allows claims to be submitted with both ICD-9 and ICD-10 codes. This leads to challenges in both backward and forward crosswalks. It’s important that the Payer organization’s claims systems are able to handle all possible electronic claim formats (4010A1-ICD-9, 5010-ICD-9 & 5010-ICD-10)
  • Claim Adjudications – A large number of adjudications in ICD-10 claims lead to lower first pass rate. Providers and clearinghouses are faced with the immense challenge of training their billers and coders to provide the proper ICD-10 codes.
  • Training on ICD-10 Codes – Payers will have to train their employees including adjudicators, on the new ICD-10 codes. Focusing on how and why ICD-10 impacts the claims management process will help the payers’ staff understand the scope and complexity of the overall impact.
  • Payment Delays – As mentioned before, the health care industry has two important players: the payers and the providers. If there is a delay in payments to the providers, they will undoubtedly be unhappy, which will cause a strain on the relationship between the two groups.
  • Back Dated Claims – Processing of back dated claims submitted in ICD-9 will lead to inherent complexities and issues in the timely processing of claims, which will cause end user dissatisfaction.
  • Utilization Management – Utilization management complexities will arise due to improper usage of ICD-10 codes by providers.

Given that the ICD-10 migration deadline is only about two years away, it’s extremely important that health care organizations start considering these issues as they plan their ICD-10 implementations and requirements.

Please visit or email Mr. Mohan directly for more information.

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