Physical Therapy ICD-10 Coding Example

August 28th, 2015
Codes, ICD-10, ICD-10 Example, Preparation

Don’t you just love word problems? We do—so we created a fun ICD-10 word problem just for physical therapists. Don’t worry; we’ve provided the answer, too. Ready to learn how to code for ICD-10? Then, here we go!

The Example

ACL sprain

The Patient

The patient is a 16-year-old male. During his high school soccer game last week, the patient sprained his ACL when his knee came into contact with another player’s leg. He comes to your office without a physician referral and is using crutches for ambulation. He also presents with:

  • Pain, especially while walking
  • Edema
  • Instability in his right knee

The Codes

Primary Codes

  • S83.511A for sprain of anterior cruciate ligament of right knee, initial encounter.
    • Because this is a direct access patient, you’d use “A” as the seventh character.
  • W51.XXXA for accidental striking against or bumped into by another person, initial encounter.
    • This external cause code further describes the factors leading up to the injury.
  • Y92.322 for soccer field as the place of occurrence of the external cause.
  • Y93.66 for activity, soccer.

Additional Codes

These codes indicate the reasons for outpatient therapy:

  • R26.2, Difficulty in walking, not elsewhere classified, or R26.89, Other abnormalities of gait and mobility
  • M25.561, Pain in right knee
  • M25.361, Other instability, right knee
  • M25.461, Effusion, right knee

The Description Synonyms

Did you notice you could code either R26.2 (difficulty walking), or R26.89 (other abnormalities of gait and mobility)? You’ll need to use your patient evaluation and best clinical judgement to determine which code better describes the reason for the patient’s disordered movement. Each code has its own synonyms that can help you make your selection:

Difficulty walking

The description synonyms for R26.2 are:

  1. Difficulty walking
  2. Walking disability

Other abnormalities of gait and mobility

The description synonyms for R26.89 are:

  1. Cautious gait
  2. Gait disorder due to weakness
  3. Gait disorder, painful gait
  4. Gait disorder, weakness
  5. Gait disorder, postural instability
  6. Gait disorder, multifactorial
  7. Toe walking and toe-walking gait
  8. Limping/limping child

The Summary

This example has codes for days, so if you’re still a bit confused—or having panicky flashbacks to that dreaded linear algebra class—we get it. That’s why we’re hosting our ICD-10 Bootcamp on August 31. During this free, 90-minute online webinar, we’ll provide a step-by-step explanation on how to locate ICD-10 codes in the tabular list, in the index, and in WebPT. Make sure you register here to reserve your spot.

ICD-10 Talk with Dr. Heidi Jannenga: What is ICD-10?

August 19th, 2015
ICD-10, ICD-9, Preparation, Transition

As you’re probably—hopefully—well aware, the transition to ICD-10 is happening in about six weeks. And this is no tiny tweak; on October 1, 2015, all HIPAA-covered healthcare providers in the entire US must begin coding patient diagnoses using codes from the new ICD-10 code set. To help rehab therapists take on this change confidently—and emerge from ICD-Day unscathed—we’ve provided tons of free ICD-10 educational materials, from blog posts and guides to interactive games and webinars. And now, we’re upping the ante with video: introducing ICD-10 Talk with Dr. Heidi Jannenga.

In the first video of this new series, Heidi provides a brief explanation of ICD-10 and how it differs from ICD-9. Stay tuned for more awesome ICD-10 Talk videos, and be sure to check out the rest of the resources available here on Have a question? Submit it using the question form at the bottom of this page, and we’ll round up an answer for you.

Quiz Bowl: ICD-10 Edition

August 13th, 2015
ICD-10, Preparation, Quiz

It’s back-to-school season, and that means kids everywhere are getting back into the swing of classes, homework, and of course, tests. But returning students aren’t the only ones who should be studying up. If you’re a HIPAA-covered provider, you only have about six weeks to prepare for one of the biggest tests the US healthcare community has ever seen: the transition to ICD-10. So, are you an A-plus ICD-10 pupil? We hope so—after all, your payments depend on it. To see how you stack up, take our ICD-10 quiz. Need a study guide? Check out this crunch-time guide to ICD-10.

3 Costly ICD-10 Pitfalls and How to Avoid Them

August 11th, 2015
ICD-10, Preparation

The switch to ICD-10 doesn’t have to be crazy-expensive, but if you make a couple of big missteps, your whole practice could take a financial tumble. Like navigating a magical hedge maze to retrieve the Triwizard Cup, making the transition to ICD-10 could be full of costly pitfalls. Here are three common ways ICD-10 can empty your bank account—and how to avoid them:

1. Weak Cash Flow

During the transition to ICD-10, it’s possible you may experience a delay in payments due to coding errors and vendor or payer under-preparedness. That’s why you need to do everything in your power to make sure your revenue stream keeps flowing. To that end, you should first assess your current billing workflow to determine how quickly and cleanly your practice currently processes and receives payment for claims using ICD-9 codes. This will allow you to correct any kinks in your workflow and give you a much better sense of how ICD-10 could affect your cash flow after the transition. Depending on the results of your assessment, you may need to consider hiring coders, better training your front office staff on billing, or working with an automated billing service or software.

2. Poor Productivity

While we can expect a certain degree of diminished productivity during the transition, it shouldn’t be severe—or permanent. To keep your clinic running at top speed, start by determining your practice’s most commonly used diagnosis codes and their most specific ICD-10 equivalents. That way, your staff can spend more time billing and less time searching for codes. While you’re at it, a recent Medscape article recommends that you start phasing out unspecified diagnosis codes. Not only can unspecified codes give way to questions that bog down your billers, but they also can cause ICD-10 claim denials.

Another way to prevent productivity loss is to ensure your billing, practice management, and EMR vendors—and payers—are ready for ICD-10. First, find out which of your vendors and payers will be affected by ICD-10. Then, you’ll need to:

  • Determine their testing processes and schedules.
  • Submit and review test data.
  • Update your billing process—and perhaps your vendors—based on the results of your testing.

For more details on external testing, check out our blog post here.

3. Lack of Training

Just as investing in Apple stock when it first went public in 1980 was a good idea, so is training your staff on ICD-10 now—before it becomes a big to-do. Otherwise, you’re in for a rough transition—complete with heaps of staff frustration. Switching to ICD-10 isn’t exactly a small change. The new code set has 55,000 more codes than ICD-9. To further complicate matters, while ICD-9 codes are mostly numeric and have just three to five digits, ICD-10 codes are alphanumeric and contain three to seven characters. So, while some folks will feel the impact more than others, all of your staff members should go through some kind of ICD-10 training to ensure everyone is on board with the change and understands the new coding requirements.

Be patient and flexible with your staff while they learn the new structure, but make sure you develop—and stick to—a training timeline and strategy. To vary your educational style and keep costs down, take advantage of free educational tools, like ICD-10 for PT and the WebPT Blog. We’ve got tons of articles, webinars, handouts, checklists, quizzes, and games to help prepare your staff for the switch.


Knowing three of the most common ICD-10 pitfalls for PTs—and how to arm yourself against them—will help you avoid a financial fiasco come October 1. But that doesn’t mean the transition will be totally easy. Make sure you download The Physical Therapist’s Crunch-Time Guide to ICD-10, and don’t miss WebPT’s upcoming webinar—ICD-10 Bootcamp: Coding Exercises for PTs and OTs—on August 31, 2015, at 9:00 AM PDT / 12:00 PM EDT.

The Penny-Pincher’s ICD-10 Plan

July 24th, 2015
ICD-10, ICD-9, Preparation, Transition

With only about two months to go until the mandatory switch to ICD-10, your clinic should be fully entrenched in its preparations. If you started early, you’re probably feeling pretty good about where you’re at. Maybe you even feel totally ready to tackle the change. But if you didn’t start early—or if you haven’t started at all—you’re likely feeling the pressure on your practice and your bottom line. If your clinic’s staff doesn’t understand how to correctly code using ICD-10, you’ll suffer the financial consequences. Luckily, the Centers for Medicare and Medicaid Services (CMS) have granted providers with a one-year grace period—which could save you some delayed payments and claim denials due to ICD-10 coding errors. But the cost of transitioning to ICD-10 begins well before we actually switch code sets.

To help cover the cost of preparation, you could consider securing a line of credit with your bank or having three to six-months’ worth of cash on hand to keep your clinic afloat. But if those options aren’t available to you—or if you’d rather keep your purse strings tied up—you’ll need a penny-pinching preparation plan. Here are seven tips to help you prepare for the switch to ICD-10 without breaking the bank:

  1. Clear out your current reimbursement backlog and collections accounts to beef up your cash reserves.
  2. Take advantage of free educational tools, like ICD-10 for PT and the WebPT Blog, to educate you and your staff. Training is necessary, but it doesn’t have to be expensive.
  3. Determine your practice’s most commonly used diagnosis codes—and their most specific ICD-10 equivalents—to soften the blow to your productivity come October 1.
  4. Test with your payers and vendors. Testing externally is free and verifies that all of your software and outsourced services are ready to receive, process, and remit for ICD-10 codes. If they aren’t ready, you might have to consider working with new vendors. That might not be in your budget, but unprepared vendors will cost you more in the long run.
  5. Asses your current billing workflow. Determine how quickly and cleanly your practice currently processes and receives payment for claims using ICD-9 codes. This will allow you to correct any kinks in your workflow, and you’ll have a much better sense of how ICD-10 affects your cash flow after the transition.
  6. Test internally. Ensuring your team efficiently and appropriately assigns ICD-10 codes doesn’t cost you much more than time right now, and it will save you a lot of money later.
  7. Create a retention plan. If any of your staff are already trained on ICD-10, they’re a valuable commodity. Do what you can to keep these employees—and their knowledge—at your practice.

Ready or not, we’ll have to transition to ICD-10 on October 1 (barring any unlikely Congressional delays). Fortunately, it doesn’t have to cost an arm and a leg to prepare your practice. With these seven tips in mind, you can get your clinic up to speed—and keep your savings intact.

Here’s What You Need to Know About the AMA and CMS Announcement

July 14th, 2015
ICD-10, ICD-10 Delay, Preparation, Transition

“Extra! Extra! Read all about it!” When it comes to the Centers for Medicare & Medicaid Services (CMS), there’s no shortage of “extra” announcements in the news these days. And even though it’s not in print, ICD-10 news is especially important right now, as implementation is slated to take effect in just a few short months. If you’ve been following our blog, you’ve seen us cover everything you need to do before October 1 to prepare your clinic, but mistakes happen. That’s why CMS—with a push from the American Medical Association (AMA)—made a move that could help soften the blow of the transition. So, even if your preparedness doesn’t quite fit the bill (literally), you still have a chance of receiving payment come October 1. Here are the details of the recent announcement:

Flexible Review

CMS and the AMA want physicians and other practitioners (therapists included) to make a successful transition to ICD-10. So, they recently announced a 12-month period during which, according to CMS, “Medicare review contractors will not deny physician or other practitioner claims billed under the Part B physician fee schedule through either automated medical review or complex medical record review based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family.” So, what does that mean?

Are providers off the hook for coding mistakes on Medicare claims?

The short answer is “no,” because:

However, if your claim doesn’t contain any errors other than those related to code specificity—and you’ve used a valid code from the correct family of codes—Medicare won’t deny your claim within that 12-month period.

How does this decision affect Medicare quality reporting?

CMS won’t apply accuracy penalties for programs like Physician Quality Reporting System (PQRS) as long as the eligible provider “submitted the requisite number/type of measures and appropriate domains on the specified number/percentage of patients, and the EP’s only error(s) is/are related to the specificity of the ICD-10 diagnosis code (as long as the physician/EP used a code from the correct family of codes),” says CMS.

ICD-10 Ombudsman

The ICD-10 Ombud—what? According to my handy-dandy online dictionary, an ombudsman is “a person (such as a government official or an employee) who investigates complaints and tries to deal with problems fairly.” And as part of this announcement, CMS described its plans to designate an ICD-10 ombudsman to investigate and help providers with their ICD-10 troubles during the transition. CMS hasn’t released many details about this resource other than the fact that the ombudsman will work closely with regional Medicare offices to better assist providers. As October 1 approaches, CMS will release more details on how you can contact the ombudsman for ICD-10 assistance.

Advanced Payment

What happens when there are system, administrative, or ICD-10 implementation problems with Medicare contractors? A conditional partial payment might be available. However, providers must repay any advanced payment, and they’re only eligible to receive such payments if they meet certain conditions.

What are the conditions?

CMS describes them in 42 CFR Section 421.214. Essentially, to receive advanced payment, Medicare suppliers can apply through their applicable Medicare Administrative Contractor (MAC).


Ultimately, CMS will review its flexible, 12-month timeline and adjust it based on the success of ICD-10 adoption. And don’t forget: Just because providers have some wiggle room when it comes to coding for complexity, it doesn’t mean they’re totally off the hook. The ultimate goal is to submit the most complete and accurate code—the first time, every time.

The 14-Week ICD-10 Training Program

July 1st, 2015
ICD-10, Preparation

You have fewer than 100 days to make sure you and your staff are prepared to kick some ICD-10 you-know-what come October 1, 2015. Hopefully, you’ve been vigilant in your ICD-10 preparations, but if you haven’t, you’re in luck. I’ve outlined the five steps you need to take in the next three months to get ready:

1. Gather your resources.

You’re already taking advantage of a pretty great resource: the ICD10forPT website. Make sure you poke around the whole site, because we’ve got loads of blog posts, downloadable checklists and one-sheets, and even an interactive game and quiz. But there are tons of other helpful—and free—resources out there, too. Don’t forget to check out the WebPT Blog for even more posts on ICD-10 and how to prepare your practice for the switch.

2. Develop a strategy.

Before you begin your hardcore prepping, you should first assess the impact the ICD-10 switch will have on your organization. Examining your clinic’s current diagnosis coding touchpoints—everything from patient scheduling and referrals to documentation and billing—will help you narrow down your to-do list. But it’s not enough to know what you need to do; you also must make sure you take the necessary actions to get the job done on time. That means you’ll need to develop a detailed timeline and budget.

A great way to ensure your clinic accomplishes all the necessary training tasks is to assign specific tasks as well as target start and completion dates. Obviously, the October 1 deadline is a hard stop, so working backwards from the transition date may help you lay out your ICD-10 prep calendar. But remember, you can’t leave everything until the end. To make sure you stay on track, you’ve got to:

  • prioritize your tasks;
  • figure out how long it will take to complete each one; and
  • determine how much the switch will cost your clinic, factoring in variables like staff training, system updates, and the potential need to hiring coders.

3. Talk to your partners.

ICD-10 prep doesn’t involve only your clinic; you also need to verify that your external partners and payers are prepared. To do so, make a list of all the software and outsourced services on which your practice depends. Then, contact all of them—from EMRs and billing services to payers—and make sure they’re ready to receive, process, and remit for claims containing ICD-10 codes. Keep in mind that if you’re currently shopping for any software, you’ll want to factor ICD-10 into your buying decision. It would be pretty awful to discover that your brand-spankin’-new EMR doesn’t function like you need it to, especially when reimbursement is on the line.

4. Train your staff.

Of course, ICD-10 will impact some staff roles more than others, but even those folks who might not be directly impacted still play an important role in your clinic’s preparations, so you definitely want to get your whole staff involved. Not only can everyone support each other, but they also can hold each other accountable for staying on top of deadlines. With so little time left to prepare, sticking to your timeline is crucial. It’s going to take longer than you think for everyone to unlearn more than 30 years’ worth of coding with ICD-9—and get comfortable coding with ICD-10.

Switching code sets is a huge change. ICD-10 is a whopping five times the size of ICD-9. Plus, the new codes are alphanumeric and contain three to seven characters; the old ones, on the other hand, are mostly numeric and have just three to five digits. So, be patient and flexible with your staff while they learn the new structure. Also, remember that your staff likely have different learning styles, so take advantage of the wide variety of ICD-10 resources to mix up your training approach. There are lots of little ways to squeeze in ICD-10 training every day—things like pop quizzes and practice exercises. And don’t forget the metaphorical gold stars for staff members who give it their all.

5. Test your systems and processes.

Testing for ICD-10 compliance might seem complicated, but like humidity in the South, it’s unavoidable. How you test depends on a couple of factors: documentation and billing. That’s why it’s crucial that you test both internally and externally. All vendors should be testing at some point before October, but you’ll need to check with them to make sure you know exactly when and how they plan to test. Then, take advantage of those testing opportunities to minimize your risk for reimbursement delays and ensure that your practice is totally ready for October.


Switching code sets is a huge undertaking, but it’s not Mission Impossible. I know 14 weeks doesn’t seem like a lot of time, but if you and your staff work hard and efficiently, you can still be prepared for ICD-10 come October 1 (and certainly more prepared than if you did nothing at all). Looking for more resources? Check out the Physical Therapist’s Crunch-Time Guide to ICD-10.

5 Things Every PT Must Know About ICD-10’s 7th Character

June 30th, 2015
ICD-10, ICD-10 Example, Preparation

The number seven is replete with cultural significance: There are seven days in the week, seven seas, and seven deadly sins. Some people even consider the number seven to be an especially lucky numeral. But for those trying to learn the ropes of coding with ICD-10, the number seven has taken on a whole new meaning.

As this blog post explains, “…the seventh character represents one of the most significant differences between ICD-9 and ICD-10 because ICD-9 does not provide a mechanism to capture the details that the seventh character provides.” Because clinicians and coders haven’t had to account for those details for, oh, the last 35 years or so, they’ve had a tough time wrapping their heads around this tricky caboose of a character. And that’s especially true in the physical therapy space, as ICD-10 coding guidance often is more relevant to physicians than anyone else in the healthcare community.

With that in mind, here are a few PT-specific tips for filling the seventh position:

1. If you need to include a seventh character, you will see instructions to do so.

The seventh character only applies to certain categories of codes. This is why it’s so important that you check the instructions for each category and subset of codes. As this blog post explains, “You must assign a seventh character to codes in certain ICD-10-CM categories as noted within the Tabular List of codes—primarily Chapter 19 (Injury, poisoning and certain other consequences of external causes) and Chapter 15 (Pregnancy, childbirth and the puerperium).”

If you don’t see instructions to include a seventh character, then leave the seventh position blank. Adding a seventh character to a code that does not require one will make the entire code invalid.

2. For most PT-related codes requiring a seventh character, there are three options.

In general, when it comes to seventh characters, the injury chapter—Chapter 19—is the one to which PTs need to pay the most attention. For injuries, poisonings, and other external causes, the seventh character provides information about the episode of care, and the ICD-10 codes for most of these conditions require one of the following seventh characters:

A – Initial encounter

This indicates that the patient is receiving active treatment for his or her injury, poisoning, or other consequences of an external cause. However, contrary to popular assumption, this phase of treatment is not limited to the patient’s first visit. In other words, you can use “A” as the seventh character on more than just the first claim. In fact, you can use it on multiple claims.

D – Subsequent encounter

This describes any encounter that occurs after the active phase of treatment has ended. During this phase of treatment, the patient is receiving routine care while healing or recovering from his or her injury.

S – Sequela

The seventh character “S” is reserved for complications or conditions that arise as a direct result of an injury. A commonly used example of a sequela is a scar that results from a burn.

3. The majority of PT encounters fall into the “D” bucket.

One of the most popular questions we get here at ICD10forPT is, “Which physical therapy encounters qualify as active treatment?” And while we haven’t been able to come up with a one-size-fits-all answer to this inquiry, here’s what we’ve deduced from our research: According to this CMS document, examples of active treatment include “initial evaluation of the condition, which may be in the emergency room or at a physician’s office or clinic, encounter for surgical treatment of the condition, and evaluation and continuing treatment by the same or a different physician.” For these types of encounters, use of the seventh character “A” is appropriate.

The document goes on to note that appropriate uses of the seventh character “D” include encounters “for rehabilitation, such as physical and occupational therapy.” Based on this guidance, it’s safe to say the majority of PT visits occur during the healing/recovery phase of treatment (and would thus require the subsequent encounter designation). However, it appears that the “initial encounter” designation is appropriate in situations involving evaluation.

4. If you add a seventh character to a code with fewer than six characters, you must fill each empty slot with a placeholder “X.”

Let’s say, for example, that you’ve selected the diagnosis code S44.11, Injury of median nerve at upper arm level, right arm. As indicated at the beginning of the S44 code category, you must add a seventh character to this code. You determine that, because the patient is receiving routine care for the injury in the healing and recovery phase, the appropriate seventh character is “D.” However, because this particular code contains only five characters, you’ll need to insert an “X” in the sixth position before you can put “D” in the seventh position. This ensures that the first five characters correctly link to the required seventh character (leaving the sixth position blank, on the other hand, would dissociate the “D” with the rest of the code). Thus, the correct code would be S44.11XD, Injury of median nerve at upper arm level, right arm, subsequent encounter.

5. Fracture codes have their own set of seventh character options.

Typically, PTs receive fracture diagnosis codes from referring orthopedic physicians and surgeons. However, it’s important to know the differences between the seventh characters that apply to fractures and those used for other diagnoses. Here is the list of the ultra-specific seventh characters reserved for fracture coding:

  • A – Initial encounter for closed fracture.
  • B – Initial encounter for open fracture.
  • D – Subsequent encounter for fracture with routine healing.
  • G – Subsequent encounter for fracture with delayed healing.
  • K – Subsequent encounter for fracture with nonunion.
  • P – Subsequent encounter for fracture with malunion.
  • S – Sequela.

To make matters even more confusing, certain categories of fracture codes require seventh characters from a special list that accounts for the type of fracture. There are 16 seventh characters contained within the list, which you can review in more detail in this blog post. A final word on fracture coding: As the aforementioned post explains, the fracture aftercare codes that appear in the ICD-9 code set will go away forever on October 1. Instead, those coding for traumatic fracture aftercare will “assign the acute fracture code with the appropriate seventh character.”


Even if seven isn’t your lucky number, these five tips should get you on the path to seventh-character success without too much misfortune. Still have questions? Submit ’em in the question module at the bottom of this page, and we’ll do our best to get you an answer.

Third-Party Payers and Billers Fall Behind in the ICD-10 Prep Game

May 5th, 2015
ICD-10, Preparation

Moving a claim from submission to payment is a little like moving a football down the field and into the endzone. As every NFL fan knows, scoring a touchdown (i.e., getting paid) requires flawless execution at multiple touchpoints. And if one person drops the ball, your chances of putting points on the board (i.e., money in the bank) could be in serious jeopardy—and I’m not talking about America’s most beloved nightly quiz show.

That’s why, with less than half a year to go before the transition to ICD-10, many members of the healthcare community are concerned not about the initial ball-handlers—like providers and coders—but about the claim recipients and processors. Because as every insurance payment fan knows, the claim game is a lose-lose if billing vendors and third-party payers don’t perform on their end of the play. To circle back to the football analogy: Even the best quarterback in the world can’t throw a touchdown pass without a capable receiver to catch it.

Similarly, no amount of training and testing on the provider end can overcome a lack of ICD-10 prep work on the billing service and payer end, and according to reports cited in this Hospitals & Health Networks article and this Modern Healthcare article, payers and billers still have some work to do in the lead-up to the ICD-10 kickoff. “CMS has reported an 81 percent success rate in tests of incoming claims,” the Hospitals & Health Networks article states. But while a pass completion rate of 80-plus percent would be outstanding on the football field, it’s not so comforting to those who depend on timely claim reimbursement to maintain consistent cash flow. As the article goes on to point out, “…the American Medical Association has led an organized physician outcry declaring that a 19 percent failure rate would be ruinous to many practices.”

Of course, like many statistics, that percentage is a little misleading—a lot misleading, actually. In the Hospitals & Health Networks article, Sue Bowman, the senior director of coding policy and compliance for the American Health Information Management Association, pointed out that “…only 3 percent of the rejected claims…had to do with ICD-10 problems.” The rest of the rejections stemmed from issues with provider identification, service location validity, and other errors that have nothing to do with diagnostic coding. Furthermore, Bowman noted that in general, private payers have been proactive with their testing efforts—and in many cases, they’ve had even more testing success than Medicare has reported.

Still, Michelle Durner, president of Applied Medical Systems of Durham, North Carolina, worries that smaller payers won’t be ready to roll by the October 1 deadline. “The larger payers, Medicare and Blue Cross Blue Shield, they’ll be there,” Durner told Modern Healthcare. “With some of the state Medicaid agencies, I’m maybe not quite as confident. And with the smaller payers, I just don’t know. You just cross your fingers and hope. Just like with 5010, I don’t think it will come off without a hitch.”

Billers aren’t quite on top of their testing game, either—at least not based on the survey results published in the Modern Healthcare article. “…a majority of billers surveyed (57%) have not conducted basic, ‘internal testing’ of the ICD-10 handling capabilities of their systems,” the article states. Even worse: “Just 16% have conducted gold standard, external ‘end-to-end’ testing—in which a claim is sent, approved or rejected, and an explanation of what happened, called an electronic remittance advice, is returned.”

So, what’s stopping billers from gaining yards on the testing front? Well, according to the above-cited survey, top barriers include outdated technology (i.e., the need for software upgrades), problems with provider-submitted documentation, and uncertainty over the possibility of another ICD-10 implementation delay.

And while ICD-10 resistors could still throw out a hail-mary attempt at another implementation delay, their chances of success are, by most estimations, slim to none. What does that mean for PTs who depend on billers and third-party payers to maintain consistent cash flow? Well, you can only do so much to whip your vendors and partners into shape; at the end of the day, you’ve got to have your own back. So, if you haven’t already done so, start saving cash reserves now—or look into alternative ways of securing a financial cushion before ICD-10 go-time.

Fiscal Therapy: How to Develop an ICD-10 Budget

March 31st, 2015
ICD-10, Preparation

At this point, you should be ankle-deep in ICD-10 preparations, which means you’ve probably spent a whole lot of time staring at your clinic’s finances and trying to figure out how the heck you’re going to cover the cost of switching. (And if you haven’t started prepping, here’s how to get started.) I’d love to provide you with a one-size-fits-all budget, but that’s just not possible. Every clinic’s ICD-10 transition will be just a bit different from the rest based on its specific needs and characteristics.

As a general rule of thumb, your ICD-10 prep budget needs to account for all the factors that will cost you time, money, or both (time is money, after all). These include:

  • Technology upgrades or new software and/or hardware
  • Staff training on coding and new technology
  • Productivity loss during training, testing, and and the period immediately following the transition
  • Temporary staffing to cover gaps due to preparatory activities and productivity lags
  • Contract changes with vendors and payers
  • New coding guides/superbills

Handy tools like the free Healthcare Information and Management Systems Society (HIMSS) ICD-10 Cost Prediction Tool account for many of your clinic’s variables, but even if you cover all your bases, you can’t guarantee your payers will be as prepared as you are—and that can spell trouble for your practice. If payers aren’t prepared to process claims containing ICD-10 codes, you’ll need a contingency plan to offset any cash flow delays. Your best bet is to have plenty of cash on hand (but not under the mattress) to keep your practice afloat. So get ready, get set, and get to saving three to six months’ worth of cash revenue.

Is saving that much money not an option for your clinic? Consider turning to your bank for a new loan or increasing an existing line of credit. Fair warning: If you go this route, you’ll need to assess your practice’s financial needs and work with a partner who understands the particulars of the healthcare industry. Keep in mind that lenders usually require lots of paperwork, including:

  • three years’ worth of tax returns and year-to-date financials
  • a current personal financial statement
  • your most recent accounts receivable aging report

For more assistance regarding financial planning with your bank, check out this awesome list of ICD-10 cash flow tips from Wells Fargo.

However you acquire and allot your funds, be sure to nail down your plan soon. The transition to ICD-10 happens on October 1, 2015—just about six short months away. Will you be ready?