Revenue Cycle Management Blog | GroupOne Health Source

What Will ICD-10 Do To Your Cash Flow?

Written by Kaitlyn Houseman | September 26, 2015

The change from the ICD-9 coding standard to ICD-10 will affect healthcare provider cash flow from several different angles. In fact, you could do everything "right" in the lead-up to ICD-10 and still face problems with revenue cycle management. But knowing where and how ICD-10 will make an impact can help you prepare and do your best to minimize problems.

Following are several ways in which the ICD-10 transition may affect your medical practice's cash flow. The more prepared you are, the more you can mitigate any negative effects.

ICD-10 Will Make Denial Management More Critical

Managing claim rejections and denials can put the brakes on revenue cycle management because time is taken from core processes to figure out what went wrong and if it can be corrected. Then, when claims are resubmitted the whole approval cycle must happen all over again. Most practices expect an increase in rejected or denied claims after ICD-10 goes into effect. Some issues will be on the practice end, while other issues may be on the payer's end of things. While it's always important for a medical practice to have a set of best practices on handling rejected claims, that's going to be especially important for addressing cash flow once ICD-10 is in place.

ICD-10 Will Affect Third-Party Payer Efficiency

Keep in mind that insurance companies are making the transition to ICD-10 too. Some are further along the process than others, and all will have to do their share of testing and practice to make ICD-10 work. In other words, you could invest in high quality training for your medical billing and coding staff, practice test cases with ICD-10, and still have revenue cycle management problems if the insurance companies you work with experience their own difficulties implementing ICD-10. And the more insurers your practice works with, the more of an effect you can expect on your revenue cycle.

ICD-10 Will Temporarily Reduce Staff Productivity

Staff training for ICD-10 is absolutely essential. Not only coders and billing staff, but also clinical staff will have to make changes to make the new system work. But however well-prepared your staff is, the ICD-10 conversion is a major undertaking, and you can expect staff efficiency to drop after October 1. How long that drop in productivity lasts will have to do with the size of your practice, how well clinical staff and coding staff work together, and how well prepared the insurance companies you work with are. Hospitals could experience a 50 to 70% drop in productivity in the immediate aftermath of the transition.

Training May Affect Productivity Prior to the Transition

It's great that you're investing in training for your personnel, but how do you keep things running smoothly while key workers attend training sessions? You may have to get creative with scheduling and overtime, and you will almost certainly have to spend a little money. But it will be worthwhile so you won't arrive at October 1 with a backlog in billing. Some companies elect to hire temporary coding and billing professionals to fill in for personnel in training, and while this may seem like a luxury, it may be one of the smartest things you can do so you can start October 1 without leftover, lingering problems to deal with. If the burden of ICD-10 is just too much for your coders and billing you may want to consider outsourcing the billing. In fact, 42 percent of small physician practices with employed billing staff hope to move billing services to an outsourced provider within the next year. Outsourcing can be a viable solution to prevent ICD-10 denials and minimize the costs associated with ICD-10.

Smart Technology Choices Help

If you're stuck with medical billing and electronic health record software that's problematic and held together with metaphorical duct tape, you can expect ICD-10 transition problems to be more severe. Up-to-date software that harmonizes with your practice workflows can make measurable improvements in productivity, and can make the changeover to ICD-10 coding smoother. But the particular system that works great for a dermatology practice may be far from ideal for an obstetrics practice, so it should be a well-researched and considered decision.


GroupOne Health Source focuses on revenue cycle management and the business side of healthcare. This allows our clients to concentrate on caring for patients. Our goals with our clients are to maximize revenues while controlling costs and streamlining operations. Helping medical facilities cope with the switch to ICD-10 is one more way GroupOne Health Source keeps revenue cycle management on track. Are you concerned about making the transition to ICD-10? If so, or if you have other questions on revenue cycle management, we encourage you to contact us at any time.