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New Medical Billing System: So Far, So Good

Concerns among Kansas health care providers of a billing system “apocalypse” appear to have been unfounded. Providers are saying “so far, so good” about a twice-delayed new system that went into effect Oct. 1.

The new billing system is called ICD-10. It’s the 10th version of the World Health Organization’s International Classification of Diseases (ICD), and it replaced a system that had been in use since 1979.

The new system has far more codes than the old one — 100,000 more. It’s meant to be more specific about diagnosis and treatment, not only for billing purposes, but for medical research, evaluation of treatments and procedures, and disease outbreak tracking.

Health care providers were concerned that they might choose the wrong codes and might not get paid by insurance companies — at least not promptly — as a result. But after more than a month, the new system is working “surprisingly well,” according to Barbie Hays, coding and compliance strategist for the Leawood-based American Academy of Family Physicians.

“There was a lot of talk that this was going to be a disaster, but I think that they have found that it’s not as horrible as they were thinking it was going to be,” Hays says. “It’s not as expensive as what they thought it was going to be. The world didn’t stop, like they thought it was going to for Y2K.”

Much like unrealized fears that computers worldwide would crash on the first day of the year 2000, the conversion to ICD-10 has gone better than expected.

That’s important, Hays says, because payment delays could have been a big problem.

“So if you’re not receiving money within 21 days, they may not be able to make that paycheck for that nurse or that receptionist that’s working for them at 30 days,” Hays says.

There have been a few problems, according to Hays, but they’ve been resolved quickly.

If there were any major difficulties in Kansas, the state’s largest insurance company, Blue Cross and Blue Shield of Kansas, probably would be among the first to know about them. Spokeswoman Mary Beth Chambers said the company processes between 50,000 and 70,000 claims every day.

“Nearly 80 percent of our claims are processed entirely electronically, and if there are errors it will kick a claim out of the system to have one of our claims processors look at it more closely,” she says. “But we have not had an uptick in claims that have been kicked out because of ICD-10.”

Chambers said Blue Cross worked with health care providers across Kansas for the last three years to help them prepare for the new coding system. Initially it was scheduled to go live two years ago but was delayed — first by the Obama administration and then by Congress. That may be one reason implementation has gone as smoothly as it has.

The industry may not be out of the woods just yet, though, according to Brock Slabach of the National Rural Health Association, also based in Leawood.

“By the time the claims are submitted to the third-party payers, and then they go through the process of claims processing, the issues of cash flow won’t be seen typically until about 45 days or more,” he says.

That means it may be mid- to late November before health care providers truly can breathe a sigh of relief. Slabach said the reports from Blue Cross and Blue Shield of Kansas and the American Academy of Family Physicians would seem to indicate, however, that the worst fears about the new medical coding system will not be realized.

Bryan Thompson is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team.

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