This week’s guest blogger is Ron Jones, senior vice president of hospital solutions at OptumInsight. This health care industry veteran and strong supporter of health care technology calls out an issue that isn’t yet — but should be — a top concern for hospital CFOs.

I’m lucky to have the opportunity to work closely with CFOs at a number of the nation’s leading hospital and health systems, and I give them a great deal of credit for tackling the challenges in front of them — from securing Meaningful Use funds to implementing pay-for-performance models to improving billing processes. But in recent conversations, I’ve been shocked to hear that ICD-10 is not on every CFO’s short list of issues to address — and in some cases, not even on their radar.

For many CFOs, the introduction of up to 155,000 ICD-10 reimbursement codes by 2013 is strictly a coding issue that will fall under the domain of IT or information management departments. The deadline of October 2013 is also causing a sense of procrastination as many CFOs say they’ll wait until January of that same year to start exploring solutions. These reactions have led me to believe that most CFOs don’t understand the enormity, complexity and time-sensitivity of the issue or the financial reasons to get started now. As a result, hospitals and health systems are at great risk of losing significant revenue if CFOs don’t start focusing on ICD-10 today.

Without preparing for ICD-10, hospitals face lost productivity and denied claims, which coupled with undercoding, could deliver a financial hit of as much as $850,000 for an average 250-bed hospital. This comes at a time when operating margins are tight, the complexity of revenue cycle management only continues to increase exponentially, and self-pay receivables are 30 percent of the total hospital receivable.

ICD-10 is a revenue/reimbursement issue — not just an education or coding issue. The CFOs that understand the impact and potential revenue loss of ICD-10 recognize that to survive this transition, providers need computer-assisted coding (CAC) technology to increase coder productivity, improve coding accuracy and ensure compliance — and they need to start their CAC evaluation process NOW. They see that they can’t wait until 2013 to start preparing, because along with coding technology, ICD-10 readiness requires a complete overhaul of reimbursement business processes as well as a plan and the technology in place to cross walk between the ICD-9 codes and ICD-10 as claims flow through the system using pre and post 2013 dates. They understand that building new workflows, adjusting levels of staff and implementing new documentation procedures will be critical to evaluating how many patients can flow through the system, and how to move resources to secure a margin from an operational perspective and absorb an inevitable cost increase 12 to 15 months out.

Unfortunately, less than 100 institutions have implemented the CAC solutions and process improvements across both inpatient and outpatient environments that are needed to ensure clinicians can capture each episode of care and properly prepare for the dramatic shift in documentation that ICD-10 will bring. Industry analysts project 2,000 additional facilities will implement CAC over the next 3 years, but the time to act is now. CFOs should closely evaluate the looming loss of resources and revenue that ICD-10 will bring and start preparing for it today.

–Ron Jones