Healthcare News & Insights

Should your hospital outsource its ICD-10 coding?

Many providers are worried they won’t have the time or ability to manage the transition to ICD-10 well. As a result, a lot of hospitals are planning to outsource their coding needs. But before your facility follows suit, there are some things to consider. 

179330050 (1)By now, most hospitals know they have a lot of tasks ahead of them if they’re going to be prepared to use ICD-10 by 2015. Unfortunately, not all facilities believe they can handle all of this.

Outsourcing vs. in-house coding

A new survey conducted by Black Book Rankings, a firm that evaluates healthcare technology, shows that many hospitals are planning on outsourcing their ICD-10 coding, reports Fierce HealthIT.

Black Book surveyed 650 hospital leaders and here’s what it found:

  • 19% said their facilities were already outsourcing some part of their coding, and
  • 47% said they would begin using a third-party coder to outsource their coding by October 2015 — the current deadline for mandatory ICD-10 implementation.

“Transitioning to ICD-10 is a complicated process and hospitals are leaning on the expertise and successes of outsourcing vendors,” said Doug Brown, Black Book managing partner.

But interestingly, about 51% of respondents said their facility would be ready for ICD-10 by the deadline without the use of outsourcing.

So what elements influence whether a hospital should outsource its coding vs. handling it in-house? The push to outsource coding comes from factors like:

  • lack of in-house IT expertise and staff
  • increasing need to integrate disparate systems, and
  • pressure to  meet Meaningful Use criteria.

Common misconceptions

Another factor that might influence whether hospitals outsource their coding — misconceptions about the need and use of ICD-10.

A FierceHealthIT article recently addressed some of the ICD-10 myths like:

  1. “ICD-9 doesn’t need to be replaced.” Most industry experts agree that ICD-9 is too outdated to keep up with the rapid developments in health IT. As a result, there have been significant problems for providers with electronic health records (EHR), interoperability and data reporting.
  2. “ICD-10 makes it harder for providers to find the right codes.” The new coding system is meant to be a huge expansion in terms of the number of codes. However, healthcare leaders believe that, with time, the new system actually will make it easier to find the correct codes for services because ICD-10 will be a more comprehensive/detailed system. Greater detail in coding will also help facilities receive the correct reimbursement from payors.
  3. “We can just wait for ICD-11.” Currently, the World Health Organization is setting the ICD-11 deadline for 2017. However, ICD-11 still needs to be evaluated for national use, which could be a long process. Plus, ICD-10 was delayed several times due to various issues, so it makes sense to assume that something similar is possible for ICD-11.

Though outsourcing coding could help your facility maintain its efficiency and reimbursement during the initial phase of the transition, it could also put a burden on your facility’s finances and operations efficiency.

If you feel your hospital isn’t capable of managing ICD-10 coding right now, your best bet might be to outsource coding during the initial transition with a plan to add more in-house coding down the road. This could give you added time to prepare your own staff and facility for in-house coding, while still meeting coding requirements and preventing denials during the transition.

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  1. If you choose to outsource, the management of your outsource vendors and/or CAD is critical. Here are some suggestions for successfully managing these solutions –

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