Becker's Hospital Review

16 CFO Roundtable H ospital and health system CFOs are used to dealing with change. However, 2014 brings a few developments that could significantly impact the financial health of organizations. With the new two- midnight rule, the switch to ICD-10 just months away and talks of price transparency looming large, hospital and health system finances are under- going unprecedented change. These issues have made CFO leadership as im- portant as ever for the nation's hospitals. Here, four CFOs from hospitals and health systems share their views on ICD- 10, the impact of the two-midnight rule, price transparency and more in this roundtable discussion. Q: The ICD-10 nationwide transition is coming up on Oct. 1. How is your organization preparing? Bill Boyer, CHFP, CFO and corporate compliance officer of Community Memorial Hospital (Redfield, S.D.): A lot of coding we did have outsourced, and those coders have been getting training on ICD-10 to be able to cover us. We also sent our health information management director to school to get her coding certification and she is doing ICD-10 classes now. Everything I've read says it will be a bad thing because it's slowing down the coding and [we] expect more denials. But I'm an optimist. Maybe we're go- ing to have fewer problems with RAC audits if we code it properly. ICD-10 expands the number of codes so we can specifically say, "this is what we're charging for." It may be a little harder to code, but in the long run, it could help us with denials, and to be able to get through a RAC audit cleaner and not giving money back because of overcharges. I think it's going to make things more definite and less gray. Pam Hess, CPA, CFO of Saint Thomas West Hospital (Nashville, Tenn.): It feels like we've been talking about ICD-10 forever. We have had a committee in place for the last 18 months to prepare for it. We started education ses- sions for our staff and we send out more high-level updates for executives and physicians. I think it's going to cause delays in coding and billing that could affect our cash, but I'm not able to predict how bad it's really going to be. Greg Johnston, CFO of Baptist Health System (Birmingham, Ala.): We have a multidisciplinary steering committee, which was set up in 2011, working with external consultants to ensure organizational readiness. Our efforts are focused on educating our coding staff on ICD-10, and we will be adding additional coding resources to help with the productivity declines that we will see with ICD-10. We are also looking for opportunities in our EHR to hardwire some of the additional specificity that we will need to properly code the patients' records. We're forecasting a delay growth of five or six days in accounts receivable as a result of physician queries and just the time it will take to code the additional specificity. We're hoping that will drop over time, but that's our major area to be impacted. We are not anticipating a significant increase in denials or services that are unreimbursed, but anticipating an accounts receivable delay. Douglas Shirley, senior executive vice president and CFO of Cooper Uni- versity Health Care (Camden, N.J.): We started the journey about six or eight months ago by forming our high-level executive steering committee. We've engaged multiple partners throughout the process, including a consulting firm, to help us reengineer health information management functions. We've launched several training programs in classrooms, on the Web and even pod- casts on iPads and iPhones to try to get information into providers' hands. For HIM staff, we're sending a lot of them to in-depth training courses and offering some training internally. The biggest thing is engaging the key stakeholders — it will affect most people in our organization, from physicians to nurses to coding. There's no such thing as too much education about it, and we've planned to have additional coding staff available in the first 90 days to hopefully minimize the effects of transition during the rollout. Initially, I do anticipate a slowdown in claims processing and cash flow. Hope- fully, since we're being proactive, that will be at a minimum. Long term, I be- lieve the healthcare industry as a whole is good at adapting to challenges. We've dealt with the balanced budget act, HIPAA and the rollout of EHRs. The indus- try is pretty resilient and we'll figure it out, hopefully sooner than later. Q: CMS included a new regulation in its 2014 Medicare inpatient prospective payment system final rule: the two-midnight rule. what strategies have you used to deal with this new regulation? Bill Boyer: We have not been really concerned with that yet since we are a critical access hospital, but we probably should be. We don't use observation very much here. Our physicians are really conservative on admissions, and when patients are admitted, a lot of them are hitting three or four day stays, so we're not admitting the ones who will have to be changed to observation. CFO Roundtable: How Will 3 Major Changes for the Year Ahead Impact Finances? By Heather Punke Bill Boyer Pam Hess Greg Johnston Douglas Shirley

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