Spring 2012 issue of Horizons

Professional Services

Managing a Medical Practice in Today’s Regulatory Environment By Steve Moro, CPA

In addition to this cost, practices report that they are generally less productive during the EHR implementation process.

Currently, the healthcare industry (as well as the rest of the country) braces for the full impact of the healthcare reform laws to be implemented in 2014. However, over the last few years, physician practices have been dealing with various other regulatory issues, which have put pressure on the “bottom line” of these organizations. The issues that have been grappled with the most include: • Initiative to move to electronic health records • Requirement to move to version 5010 electronic transaction code set • Migration from International Classification of Diseases – Clinical Modification (ICD-CM) - 9 codes to ICD-CM-10 codes • Constant fear of declining reimbursement from Medicare • Future reimbursement structure under Accountable Care Organizations (ACOs) • Need to adopt corporate compliance programs Electronic Health Records With the enactment of the Health Information Technology for Economic and Clinical Health (HITECH) Act and the Patient Protection and Affordable Care Act (PPACA) as amended by the Health Care and Education Reconciliation Act of 2010 (commonly known as the Affordable Care Act), Congress provided the opportunity to modernize the health care delivery system through financial incentives for deploying electronic health record (EHR) systems. Over the five-year incentive period, the maximum incentive money could be as much as $44,000 per provider to deploy electronic health records. However, the hardware and software cost, in most cases, exceeds $50,000.

Electronic Transaction Code Set As of the beginning of 2012, providers are required to use the new version 5010 electronic transactions code set, as required by federal law. The code set regulates the electronic transmission of specific data elements, such as: eligibility, claims status, referrals, claims and remittances. The upgrade from version 4010 was necessary to accommodate the forthcoming implementation of ICD-CM-10 in 2013. There have been numerous problems associated with the transition process, namely: sporadic payment of re-submitted claims, unsuccessful claims processing, lost claims and other claims processing related issues. These problems have been slowing down the billing and collections process, resulting in cash flow issues for many practices. Code Migration Under the current regulations, beginning on October 1, 2013, providers will be required to switch from using ICD-CM-9 codes to ICD-CM-10 codes. However, after receiving pressure from the American Medical Association and other industry associations, the Center for Medicare and Medicaid Services (CMS), in a February 2012 press release, indicated that the timeline will be re-examined through a rulemaking process. The ICD-CM codes are used to code and classify diagnosis data from the inpatient and outpatient records, physician offices and most National Center for Health Statistics (NCHS) surveys. Based on information from the Medical Group Management

Raise Your Expectations

55