The Data Scientist - the WPC Healthcare Blog

ICD-10, A Look Forward


Hospital billing departments know what ICD-10 means: moving from 17,000 to 141,000 codes, a greater than 8 times increase in code management. That fact makes for a difficult adjustment, no matter how prepared you may be!

We feel your pain given that the great concern of every hospital CEO goes something like this, “Will our reimbursement levels drop. And can we afford that in a shrinking-margin healthcare environment?”

The Math

I’m sure you’re wondering how a data scientist looks at this? Ok, maybe not, but it’s worth consideration. As you might imagine, there’s math involved, as the law of probability identifies two areas of risk.

  • To maximize reimbursement, the facility has to do everything right AND the payer has to do everything right.
  • If both of these happen, there are still issues related to the agreement on interpretation of the hospital’s payment contract—a classic problem that impacts most hospital facilities.

Let’s take this back to high school and review joint probabilities! It works something like this:

  • Our data validate that provider organizations have a 90% probability of coding correctly for a specific claim.
  • If the payer has a 90% probability of coding correctly for a specific claim, then
  • 0.90*0.90 = an 81% chance of success that a specific claim will be correct—or conversely 19% chance that it’s wrong.

We get the fact that some providers and facilities are better at coding than others, but consider the probability of success over 141,000 codes. It’s utterly mind blowing!

Spoiler Alert: Something else to pay attention to (as if there isn’t enough already) is the upward tick of patient responsibility because this might be an indication that billing errors are being passed on to patients.

What Can We Do?

Practically speaking, WPC Healthcare monitors what is happening in real time and compares it to what has happened historically for a similar patient population. Proactively identifying issues and delivering the support to quickly address them is the path to optimizing revenue.

ICD-10 is the first step in the value-based care journey. Getting proactive when it comes to reimbursement optimization is a smart way to empower your organization in preparation for taking risk.

The Value Proposition

At WPC Healthcare, we offer hospital organizations the tools and support necessary to get ahead of the curve (and the probabilities) including these strategies:

  • Real-time analytics. Don’t wait six months for feedback. Get insights immediately.
  • Experts. A team of experts steeped in healthcare reimbursement policy, 835/837, and data science can help you turn insights into action.
  • Expertise. Visualizations and projections designed by hospitals for hospitals that provide executives with the operational excellence necessary to manage proactively.

Getting ready before October 1, 2015, is important. But making sure you optimize reimbursement moving forward is critical.