Six Sigma Approach For Successful Icd-10 Implementation

2011
SIX SIGMA APPROACH FOR SUCCESSFUL ICD-10 IMPLEMENTATION
Brought to you by ICD-10 Coders Academy Compiled By: Dr. M. Santosh Kumar Guptha CPC, CPC-H, CPC-P, CPMB, CMBS, CMRS, CHA, CHL7 Certified Six Sigma Blackbelt AHIMA ICD-10 Trainer Certificate Holder www.icd10codersacademy.com
PREFACE
We, at ICD-10 Coders Academy, bring you the first and comprehensive Six Sigma road map document for successful transition to ICD-10. This is intended to help you establish achievable goals, prioritize work efforts and continually improve performance on your path to ICD-10 implementation. The guide is designed to help members to understand the Six Sigma concepts and facilitate them to employ in the transition and implementation of ICD-10. This guide provides a linkage thread between learners and practitioners, which leads to the 3 Rs of business: everyone doing the Right things Right at the Right time. A fail-safe approach to ICD-10 implementation is vitally needed to help organizations deal with the extraordinary challenges they are facing today to comply with ICD-10 mandate. In an era often characterized by metrics overload, this guide will help you identify only what is meaningful. It provides measures on different levels thereby helping management to upgrade ongoing operational requirements to meet the deadlines. This version of the guide deserves to become a standard desk reference for everyone in the organization responsible for meeting ICD-10 implementation goals. It makes valuable reading for organization leaders and team members. As such, it is a reference guide for ICD-10 implementation teams across the organizations. The present guide is the first version in the series and the next version will be released in March 2011. General inquiries/feedback/suggestions from members are always welcome. This should be directed to info@icd10codersacademy.com or can be sent to us through our contact us page of our website www.icd10codersacademy.com
This guide contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author/s and the ICD-10 Coders Academy cannot assume responsibility for the validity of all materials or for the consequences of their use. No part of this guide may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from ICD-10 Coders Academy.
2011 2010 ICD-10 Coders Academy, LLC
ICD-10 CODERS ACADEMY

Setting The Standard For ICD-10 Training And Implementation
ICD-10 Coders Academy, headquartered in Orlando, Fl., was promoted by a group of enterprising healthcare professionals who collectively have more than 50 years of experience in US healthcare businesses, particularly in revenue cycle management and training. The Academy was founded with an intention to enable organizations and individuals to face the challenges created by the necessity of implementing ICD-10 and now boasts of a strong advisory board comprising of qualified professionals from the US healthcare and US healthcare IT industry who form the foundation. ICD-10 Coders Academy offers the following certifications:
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Table of Contents

About Six Sigma, Benefits Levels Of Sigma Performance Key Concepts Six Sigma Defects Metrics Key Ingredients Of FMEA, Statistical Processes Six Sigma Components Six Sigma Processes Key Themes In Six Sigma Change/s Required In Organizations Culture Six Sigma Implementation Six Sigma Design Lets Get Started!!! Apply DFSS Six Sigma Key Tools How To Proceed Step-By-Step DMADV Eight Discipline Problem Solving Six Sigma Methodology COPQ: Cost Of Poor Quality Multivariate Analysis (MVA) CTQ: Critical To Quality Mistake Proofing VOB: Voice Of Business VOP: Voice Of Process VOC: Voice Of Customer VOE: Voice Of Employee Important Skills Brain Storming Sessions Brain Storming Technique, Guidelines, And Preparation Budget And Implementation Planning Six Sigma Project Charter Deadlines On Way To ICD-10 Implementation
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Six Sigma
Six Sigma is a fact-based, data-driven disciplined methodology that is used to create breakthrough improvements in any business processes. Six Sigma is a process improvement methodology that aims to: Reduce defects to a rate of 3.4 defects per million defect opportunities By identifying and eliminating causes of variation in business processes Using statistical processes, wherever required, and Focusing on development of a very clear understanding of customer requirements A management system that is comprehensive and flexible for achieving, sustaining and maximizing success. Six Sigma is not a quality management system such as ISO -9000, or a quality certification system. It is a methodology for reducing defects based on process improvement.
Why the Name Six Sigma

Sigma means standard deviation The figure of Six Sigma was arrived by looking at the current average maturity of most business enterprise Sigma is a statistical term that measures process deviation form process mean or target Therefore Six Sigma means six times the standard deviation Mean is also referred to as average in common language
Benefits of Six Sigma

Six Sigma impacts bottom line (profit) Six Sigma drives strategy execution Six Sigma generates robust, flexible process Six Sigma improves human performance across entire organization Six Sigma is a low risk investment
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Levels of Sigma Performance:

Sigma Level 6 5 4 3 2 1 Defects per Million Opportunities 3.4 233 6,210 66,807 308, 537 690,000
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How good we are today:

Sigma Level 1 SIGMA 2 SIGMA 3 SIGMA 4 SIGMA 5 SIGMA 6 SIGMA Defects per Million Opportunities For every 1 million claims, 691,500 will be denied For every 1 million claims, 308,537 will be denied For every 1 million claims, 66,807 will be denied For every 1 million claims, 6210 will be denied For every 1 million claims, 233 will be denied For every 1 million claims, 3.4 will be denied
Key Concepts
Critical to Quality (CTQ): Attributes most important to process Defect: Failing to deliver Process Capability: What your process can deliver Stable Operations: Ensuring consistent, predictable processes to improve what the customer perceives
Key to the success of Six Sigma

Process Knowledge Top Management Commitment Strong review mechanism Knowledge in selection and application of Six Sigma tools
Focus on causes of Variation

From the Six Sigma viewpoint, a business process is normally represented in terms of Y = f (Xs) in which the Output (Y) is determined by some Input variables (Xs). If we suspect that there is a relation between an outcome (Y) and potential causes (Xs) we must collect and analyze data to prove our hypothesis. If we want to change the outcome, we need to focus on identifying and controlling the causes, rather checking the outcomes. When we know enough and have good control of Xs we can accurately predict Y.
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Six Sigma Defects Metrics

DPO Defect Per Opportunity is the total number of possible error or defects that could be counted in a process or service. The formula uses the number of defects and the number of units Number of defects DPO = _____________________________________ Number of Units x Number of Opportunities
DPMO Defect Per Million Opportunities will indicate the number of defects in a process, procedures or service measured in the number of millions of opportunities. To calculate DPMO you must first calculate DPO, once you have the DPMO, you multiple by 1,000,000 to get DPMO. DPMO = DPO x 106
DPU A measurement representing the average number of defects observed in a sample. Number of defects DPU = _____________________________ Total number of product units
Failure Mode Effect Analysis (FMEA)

To prevent process related problems, by attempting to surface problems early before they have chance to occur. FMEA saves time and valuable resources. Basic Concept underlying an FMEA: How can the process fail? What will be the consequences be? How serious will the consequences be? What can be done to prevent the failure or minimize the probability of its occurrence?
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Key Ingredients of FMEA

Severity: A numerical measure of how serious is the effect of the failure to the process. Occurrence: A measure of probability that a particular failure mode will actually happen. The degree of occurrence is measured on a scale of 1 to 10, where 10 signify the highest probability of occurrence. Detection: A measure of probability that a particular failure mode. Risk Priority Number: It is a numerical and relative measures of overall risks corresponding to a particular failure mechanism and is computed by multiplying the severity, occurrence and detection numbers.
RPN = S x O x D
The RPN provides priority levels to potential failure mechanisms in terms of which need to be addressed first and so on.
Statistical Processes
Building new measurement systems (metrics) and then asking new questions is an integral part of Six Sigma methodology. To improve results, we need to identify ways to measure variation in business processes, generate statistics based on those measurements and then use those statistics to ask new questions about the source of problem.
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Six Components of Six Sigma

Data and Fact Driven Management Process Focus, Management and Improvement Proactive Management Boundary Less Collaboration Drive for Perfection, Tolerance for Failure Overall Improvement You can increase profits, enhance data quality, and improve quality of patient care when you can apply Six Sigma methodologies across an organization in every aspect. Once the ICD-10 is implemented, there will be significant increase in the number of denials. There will most likely be many bottlenecks within the organization that can cause things to run slow at times. It can be frustrating when there are thousands of bills that need to be figured. 1. Data and Fact Driven Management It begins by clarifying which measures are key to evaluating the business performance Then it applies data & analysis to build understanding of the key variables Leading to optimization of the results 2. Process Focus, Management and Improvement Six Sigma focuses on Process to achieve success. The idea to achieve mastery over processes like: Designing of a product Designing of a service Improve efficiency 3. Proactive Management Means acting in advance of events such as: Defining ambitious goals Reviewing the goal frequently Focusing on problem prevention (Preventive Action) Question Why we do things in a certain way, instead of blindly defending them Instead of personnel reactively bouncing from crisis to crisis, Six Sigma talks of creative thinking to achieve continual improvement. 4. Boundary Less Collaboration Six Sigma approach brings harmony between groups who should be working for a common cause It improves a work environment supports true teamwork in organization 5. Drive for Perfection, Tolerance for Failure To improve performance i.e., (better service/lower cost/new capability) 6. Overall Improvement Six Sigma focuses on removal of waste and improve the overall process
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Six Sigma Processes

DMAIC It is generally used for the processes which are not functioning appropriately. DMAIC stands for: Define- Define the project goal and customer (internal & external) deliverables Measure- Measure the process to determine current performance Analyze- Analyze and determine the root cause of defects Improve- Improve the process by eliminating defects Control- Control future process performance
DMADV It is used for new methods as well as when DMAIC fails. DMADV stands for: Define - Define the project goal and customer (internal & external) deliverables Measure - Measure and determine customer needs and specifications Analyze - Analyze the process options to meet the customer needs Design - Design (detailed) the process to meet the customer needs Verify - Verify the design performance and ability to meet customer needsWhen to Use DMAIC: The DMAIC methodology, instead of the DMADV methodology, should be used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately. When to use DMADV: A product or process is not in existent at your company and one need to be developed. The existing product or process exists and has been optimized (using either DMAIC or not) and still doesnt meet the level of customer specification or Six Sigma level.
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Key Themes in Six Sigma are Using measurements and statistics to identify and measure variation in all processes Identify the root causes of problem Emphasis on process improvement to remove variation from the production process and therefore getting lower defects Pro-active management focusing on problem prevention, continual improvement and constantly striving for perfection Cross-functional collaboration within the organization Setting very high targets
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Change/s Required In Organizations Culture

Six Sigma is as much about people excellence as it is about technical excellence. Employee often wonder how they are going to solve a difficult problem, but when they are given the tool to: Ask the right question Measure the right thing Correlate a problem with a solution Plan a course of action they can find solution to the problem more easily. Therefore with Six Sigma, the organizations culture needs to shift to one that includes a methodical approach to problem solving and pro-active attitude among employees. Successful Six Sigma programs also contribute to the overall sense of pride of the organizations employee. Some transformations generally seen in the thinking and working of organizations implementing Six Sigma are: Process design: Designing process to have the best and most consistent outcomes from the beginning. Variable investigation: Conducting studies to identify which variable cause variation and how they interact with each other. Analysis and reasoning: Using facts and data to find the root cause of variations, instead of educated guesses or intuition. Focus on process improvement: Focusing on process improvement as key to excellence in quality. Pro-activeness: Encouraging people to be proactive about preventing potential problems instead of waiting for problem to occur. Broad participation in problem solving: getting more people involved in finding causes and solutions for problems. Knowledge sharing: Learning and sharing new knowledge in terms of best practices to speed up overall improvement. Goal setting: Aiming to stretch goals, instead of good enough targets, so that the organization is constantly striving for improvement. Suppliers: Cost is not the only criteria for vendor evaluation, but relative capability to consistently provide quality service.
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Six Sigma Implementation

The implementation of Six Sigma follows a strict protocol. 1. Establishing Management Commitment: Training senior management about principles and tools. This should be followed by a development of management infrastructure to support the Six Sigma. 2. Information Gathering: This translates into intensive communication with customers, suppliers, and employees. Information about the conditions of the processes which should be improved. Analysis of the information helps to identify the obstacles standing in the way of success. 3. Training: Organization training needs for the whole staff are assessed and the training is conducted from top to bottom. An important piece of a successful implementation project will be a training plan The plan should state what training will be provided, who will be trained, and when Track the results against the plan to assure that all staff get all of the appropriate training Training for the physician staff is different from the hospital staff. Consider the following Which code set need to be trained (ICD-10-CM for the physician staff and ICD-10-CM and ICD- 10-PCS) for the hospital staff? Approximate training duration Budget planning Start and end date for initial training There may be some interruption in the work, make sure that training does not effect the regular work Resources for training (coding tools, software, trainer, etc.) Level of training required for the staff Mode of training Physician training Coding old medical records and analyzing the documentation requirements and gaps 4. Developing Monitoring Systems: To develop a monitoring system because the one main goal is continuous improvement, the framework of the management has to support that end. 5. Choosing Processes That Need To Be Improved: Current key process in general level is mapped and problems identified, and valueless activities/sub-processes are terminated. Then the processes that need improvement are chosen. 6. Conducting Six Sigma Projects: After area of improvement is chosen, then the Six Sigma project is defined such as DMAIC and DMADV.
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7. Publish a document and educate the staff, how ICD-10: Improves care management of beneficiaries Boost efficiencies by identification of specific health conditions, diagnoses, and procedures More effective coverage and payment determination Better data for fraud and abuse monitoring Links to electronic health records (EHRs) and additional information Strategic planning for member, provider, and benefit service improvements Performance monitoring and increased capacity to report quality measures Quality assurance of clinical and administrative processes ICD-10 provides an opportunity to create more targeted and more accurate quality measures by using better diagnosis information. Provider quality and performance measures can thus be improved, and the
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Six Sigma Approach for ICD-10 Implementation

Six Sigma Design for ICD-10 Implementation
Implementation of ICD-10 will bring sea change in the present coding structure which will require substantial investment, robust processes, optimum usage of manpower and time. Usage of Six Sigma methodology will help in designing the implementation strategies, identifying defects and help the organization for smooth transition to ICD-10. For ICD-10 Implementation, we are going to use Design For Six Sigma (DFSS) approach, reason being it is an approach to designing or re-designing a new product and/or service, with a measurably high processsigma for performance from day one. DFSS is a proven, robust approach to designing new products and services and redesigning the flaws out of existing offerings. The intension of DFSS is to bring such new products and/or services to market with a process performance of around 4.5 Sigma or better, for every customer requirement. This implies an ability to understand the customer needs and to design and implement the new offering with a reliability of deliverybeforelaunch rather thanafter! Six Sigma is aprocess improvementphilosophy and methodology, whereas DFSS is centred ondesigning new products and services. The main differences are that Six Sigma focuses on one or two CTQ (Critical To Quality) metrics, looks at processes, and aims to improve the CTQ performance by about +1 processsigma. In contrast, DFSS focuses on every single CTQ that matters to every customer, looks at products and services as well as the processes by which they are delivered, and aims to bring forth a new product/ service with a performance of about 4.5 sigma or better. Just as DMAIC represents the step in a Six Sigma effort, DMADV is one of the handful of acronyms used to describe the stages of DFSS project. At the broadest level, it means identifying and clarifying that will be worked on, deciding how it will be measured, analyzing the situation, detailing the design and testing and deploying the new process, product, or service. In actual practice, DFSS hardly differs from DMADV.............
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Lets Get Started!!!

Six Sigma is a highly disciplined process that helps a company focus on developing and delivering nearperfect products and services. Why sigma? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many defects you have in a process, you can systematically determine how to eliminate those and approach zero defects. A dedicated team is critical for ICD-10 Implementation. An ideal team should include professionals who: Learn very fast Understand the complete revenue cycle Work with team spirit and accomplish tasks Will challenge the status quo Have strong project planning skills
Professionals who intend to be part of implementation team should: Be creative and determined Have IT systems perspective Become ICD-10 Expert to train others Have financial perspective Project planning and management skills
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Apply DFSS
DFSS projects focus on designing a new service or product. DFSS basically uses the same principles and toolkit throughout the entire DMADV process. When DFSS is focusing on a new service offering the design process might be little more complex. Most important point to remember is that when designing services that operate at Six Sigma levels, the VOC is absolutely vital. The aim of DFSS team is to create things that will always meet customer requirements and sometimes delight customers with unexpected pleasant surprises. To achieve these aims, the design team must have the support not only of a Six Sigma champion, but also the organization as a whole, which means that organizations executives, officers and directors must be willing to modify operations and culture to sustain the DFSS efforts. The project leader assumes a strategic perspective of the DFSS operation, ensuring that the teams are working on the right project at the tight time so that their efforts bring the most value to the company. But identifying the right projects is only the first step; management must not be afraid to revaluate how to develop new processes and not hesitate to make fundamental changes if the environment is not already Six Sigma friendly. To Implement DFSS effectively, leader must accept the following responsibilities: 1. Establish requirements early in the design process: Data gathering must occur at all functional levels within the organization, and CTQs must be given to the team early in the process. So while the team is working on the process implementation map, they also consider various CTQs factors. 2. Provide more resources early on: Plan on needing 15-20 percent additional resources beyond the baseline plan in order to optimize the early stage of process by effectively identifying CTQs, transferring requirements to implementation stage, and coming up with robust process mapping. 3. Develop process platform: Think beyond a project-by-project basis for your companys DFSS initiatives and develop process using the approach. Developing process platform can provide strategic advantage for an organization in a variety of areas. 4. Assume the champions role: For DFSS to deliver on its promise, the organization needs leaders who are Six Sigma champions. In this role, management needs to fully understand the DFSS process, its tool and the environment needed to achieve the best results. Management must make changes where needed and communicate these changes so each employee understands how DFSS will impact the company and job requirements. Champions are required to provide leadership, generate vision, provide resources, monitor results, and map out other uses for DFSS that will bring Six Sigma effectiveness to the entire organizations.
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Six Sigma Key Tools

VOC: Voice of the customer The voice of the customer is the term to describe the stated and unstated customer needs or requirements. Understand the customers wants and needs, and as the key input for new product, setting the process, scope of improvement and maintaining the quality. This process is all about being proactive and constantly innovating to capture the changing requirements of the customer with time. Tollgate Review Cross-functional business reviews of a DFSS project are conducted at the end of each phase. The key topics of review include customer requirements, project risk, financial objectives, and timelines. Using the information provided at the tollgate review, each stakeholder decides whether the current phase merits a project is allowed to continue to the next phase. If the decision is Conditional Pass, then the conditions need to be met to the stakeholders satisfaction to permit continuation of the project into the next phase. If the decision is Do Not Pass, then the tollgate review is rescheduled and the cross-functional design team has an opportunity to redo the current phase of the project. If the decision is Kill Project, then the project is discontinued. It is important to note that tollgate reviews are business reviews, not technical reviews, and their cross-functional character as well as the review process itself improves the probability of success for a project. Quality Functional Deployment (QFD) Quality Function Deployment, also known as House of Quality, is a key tool used throughout the DFSS process. A living document that is first created during the Initiate phase and continually updated, QFD enables you to capture Voice Of Customer (VOC) information and transform it into tangible customer requirements. It can be used at many levels or houses to transform customer requirements down to the actionable process level. It captures and ranks customer requirements and helps turn them into measurable design objectives and assigns targets and limits for those objectives. It can also be used to assess competitive advantages and weaknesses. Once you start the ICD-10 Implementation process, you will face many blocks Pressures exist for cost cutting Resources distribution will be difficult as the staff may not spend extra time Mandatory EMR implementation will reduce productivity of coders/billers Liaison between the vendors and financial department Coders need to probe deep into medical record and query the physician for the specificity in documentation. Educating physicians about the ICD-10 documentation You need to be creative and very determined.
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How To Proceed Step-By-Step: Step 1: Define the Project

Build the business case Develop the Charter: Set expectations, scope; Hand-off project from the Leadership Team to the Project Team. Start Identifying customer requirements.
Project Planning/Change Management/Risk Assessment
Step 2: Identify Requirements

Translate Voice of the Customer into Quality Characteristics Set Targets Create Specifications Identify and Prioritize Key Functions
Step 3: Select Concept

Generate, Evaluate, and Select Concepts Identify and Prioritize Design Elements Develop High-level Process Predict High- Level Process Performance Create a Six Sigma Scorecard
Step 4: Develop Design

Develop and Test Detailed Design Plan for Process Management Review the Design
Step 5: Implementation

Pilot, Test and Implement the Design Plan Pilot Phase Run Pilot Transition Process to Owners for Roll-out, Implementation, Ongoing Maintenance, and Control.
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The essence of DFSS is predicting design quality upfront and driving quality measurement and predictability improvement during the early design phases - a much more effective and less expensive way to get to Six Sigma quality than trying to fix problems further down the road. As mentioned earlier, in practical approach, DFSS hardly differs with DMADV. DMADV Define The Project 1. Develop Charter Measure Customer Requirements 1. Understand VOC Analyze Concepts Design The Process Verify Performance 1. Conduct and Evaluate Pilot 2. Implement the Design 3. Close Project
2. Develop Project Plans 3. Develop Org. Change Plan 4. Identify Risks 5. Tollgate Review
2. Translate VOC Needs into Req. (CTQs) 3. Prioritize CTQs 4. Reassess Risk 5. Tollgate Review
1. Identify Key Func- 1. Identify & Prioritions ties High- level process Requirement 2. Prioritize the 2. Develop process Functions Requirements 3. Generate Concepts 3. Develop HighLevel process
4. Evaluate & Select 4. Test High-Level Concepts process 5. Review Concepts 5. Identify & Prioritize Detailed process Elements 6. Develop the Detailed process 7 Test the Detailed process 8 Develop Process Management Plans 9 Review Pre-pilot design review 10. Tollgate Review
6. Tollgate Review
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Eight Discipline Problem Solving:

Resolve problems permanently so that they never occur. This will allow you to focus on core activities. Why follow an 8-D Approach? Problem need to be resolved for good Problems usually re-surface When problems are effectively resolved, company can channel resources to more strategic efforts such as innovation and other initiatives. Three key points which an 8-D problem solving effort must address: Determination of root cause Implementation of permanent corrective action Systemic actions to correct the system as a whole. These actions could involve the performance of FMEA, training, and changing standard operating procedures.
Summary of 8-Discipline problem solving process:

D-0: Planning stage D-1: Establishing the team D-2: Describing the problem D-3: Developing an interim containment action D-4: Defining root cause & identifying the escape point D-5: Permanent corrective actions (PCA) for root cause and escape point D-6: Implementing the PCA D-7: Preventing reoccurrence D-8: Recognizing the efforts of the team
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Six Sigma Methodology on ICD-10 Implementation

Project Title Problem Statement ICD-10 Implementation Here, the project is described in terms of WHAT is the problem, WHEN or under what conditions does the problem occur, WHERE does the problem occur? What is the EXTENT of the problem and What is the IMPACT of the problem? Use real data wherever possible to give your problem statement more credibility. Referencing the problem statement above, document a goal statement that articulates as much as possible the improvement levels you wish to achieve as well as the time frame within which you expect to achieve it. What is Included? What is not included? Document areas which Document areas which are not to be included in this are included in this project project
Goal Statement
Scope
Work with your sponsor and champion to determine scope data, document both hard savings (reduced cost, increased revenue or Expected Benefits/ Using delay in purchase/cost expenditure) and soft savings (increased employee moBusiness Case rale, increased customer satisfaction, etc.) as appropriate to the project. Roles & Responsibilities The person taking responsibility for completing the project, working with team Project Leader members to accomplish actions and updating champions & sponsors on progress. The highest level executive responsible for the success of the project and the Project Champion project team. Project Sponsor Person working with the project leader on a frequent basis to ensure success. Core team Extended team be larger up to 5-6 additional people who proProject Team Mem- Maximum of 4-5 people Can vide needed expertise. bers Involved with project Involved with project team on as-needed basis. team on weekly basis. Project CTQs Should have no more than two projects CTQs (Critical To Quality characteristics) which provide focus for the project.
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COPQ: Cost Of Poor Quality

The effective cost component of a product or service that is attributable to the quality aspects can be called Cost Of Poor Quality. If the Process is not properly mapped, then there would be lots of defects. Its the cost of NRFT (Not Right First Time), it includes the cost of lost goodwill and expenses incurred in refund, replacement, scrapping etc. For ICD-10 implementation, Cost Of Poor Quality will impact directly the Provider & Payer. The affect of poor quality are as follows: 1. Increase in claim denials 2. Delay in getting the claim amount from the Payer 3. Reduction in cash flow 4. Triggering Audits from Payers 5. Reduced patient turnover 6. Poor patient care 7. Cost of Lost goodwill 8. Expenses incurred in refunds, replacement 9. Potential Litigations 10. Difficult to sustain the business in the long run E.g. Average 8% disruption cash flow is predicted. Each physician, on the average, collects about $650,000 per annum. An eight percent disruption equals to $52,000. For a ten-physician strong provider group, this results in $520,000.
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Multivariate Analysis (MVA): This is based on the statistical principle of multivariate statistics, which involves observation and analysis of more than one statistical variable at a time.
The subject of multivariate analysis deals with the statistical analysis of the data collected on more than one (response) variable. These variables may be correlated with each other, and their statistical dependence is often taken into account when analyzing such data. Obtain the Components of Variability Insurance Carriers Departments Physician Coder/Biller The Objective of Multivariate is to identify the cause for variation, to improve the stability over time by providing direction for process improvement. Keep this in mind: Y=f (x) + E In this equation, X represents the input of the process and Y the output of the process and f the function of the variable X. E represents the error or that causes variation In our process: Y is the Medical Coding and Billing Process
X can be many like Documentation Issues, Lack of Knowledge, Payer Issues, etc
For Fail-Proof ICD-10 Implementation, know what are the key Xs to Analyze Potential Xs Coding/Billing Staff Physicians Documentation Insurance Carriers Medical Necessity Budget Specificity of the Diagnosis Code ICD-10 Guidelines, etc.,
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Gather the Xs and study the key inputs (internal variables) impacting the output (implementation) Look at the Xs and consider which are causing variability in the process output Go back and look at Xs again, make sure that you have identified all Xs that impact the implementation. Wastes that you need to pay attention after ICD-10 Implementation. Treat these are Xs and start analyzing them and focus on these areas. For claims denied due to medical necessity, faxing and mailing the additional medical records to payer to substantiate the medical necessity as the diagnosis codes submitted may not be specific Claims held in data systems to validate the coding issues at the PMS/EMR software and clearing house level Calling the insurance/e-mailing the insurance representatives for the denial of payments Increased waiting time for system upgrades Waiting for the receipt of payments Waiting for clearinghouse/business associates to update their systems Checking the claim status for every patient balance on the assumption that the claim may be denied because of coding issues More-than-regular processing time for underpayments/overpayments from payer side due to new coding system implementation Sending the claims multiple times when there is no response from payer Increased billing time
Your objective is to improve the Y, find solution for Y and work on Xs Hypothesis Testing
H: Null Hypothesis H: Alternate Hypothesis
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What is Hypothesis Based on facts that we know, we form a hypothesis to explain something we dont know Recall the formula Y= f (X) + E Basing on X, we start to explain something which we dont know We assume that Null Hypothesis is true
Assume Null Hypothesis is Revenue decreased due to Coding Errors Alternate Hypothesis Revenue is not decreased due to Coding Errors (may be some other X)
We look for the convincing reasons to prove that Null Hypothesis is wrong If Null Hypothesis is rejected, then Alternate Hypothesis is accepted If Null Hypothesis is accepted, then Alternate Hypothesis is rejected How to analyze the Hypothesis: Collect the data (potential Xs) Calculate in Microsoft Excel or Minitab The information provided herewith is to enlighten you on how to use the Six Sigma tools for ICD-10 Implementation. It is highly recommended that you take the Six Sigma Training for effectively using Six Sigma Tools for ICD-10 Implementation.
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CTQ: Critical To Quality

The CTQ tree indicates key measurable aspects of that process or product whose specification limits or performance standards must be met to fully satisfy the customer.
Step: 1
Analyze the current process which can fulfil the Regulations/Guidelines 1. Deadline: As per HIPAA final rules, ICD-10 must be implemented by October 1, 2013. Payer pays the claims only if they are submitted with ICD-10 codes. 2. Software Support: Typically, the Medical Billing software generates the ANSI 4010 Version which accommodates ICD-9 codes. From October 1, 2013, ANSI 5010 must be implemented to accommodate the ICD-10 codes. Talk to software vendors about their plans for ICD-10. In order to transition to ICD-10, hospitals and software vendors will have to communicate to make sure hospital software is updated to accommodate ICD-10 coding changes. SOFTWARE UPGRADE SOMETIMES NEEDS HARDWARE UPGRADE. 3. Training: Coders/Billers should undergo extensive training to prevent the denials/fraud. Current level of knowledge of ICD-10 is not useful. 4. Physician Training: Physician needs training about the documentation. As ICD-10 codes are more specific, physician documentation must be specific. Vague documentation leads to non specific code assignment or need to query. 5. Training Material: Training material is important to understand the basic elements of ICD-10. 6. Examination: The examination is important to assess the knowledge of the coders/billers about ICD-10 before issuing the certificate. 7. Prompt Response: Prompt response to the queries of coders/billers is a vital factor to maintain the quality of the program. 8. Value For Money: A Training and Certification program, like Certification Value Package provided by ICD-10 Coders Academy, will yield more than expected results for those enrolling as members.
Step: 2
Identify the key requirements: Implement the 5010 version, analyze the current vendors and discuss the time frame Identify the key resource and train the trainer Analyze current documentation and focus on improving the documentation as per ICD-10 Stay updated with ICD-10 changes Updating Software at the payer and the provider end to incorporate the required changes
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Mistake Proofing Technique to make the happening of errors impossible, making system fool-proof Also known as POKAYOKE Poka yoke (pronounced poh-kah yoh-kay) comes from two Japanese words yokeru which means to avoid and poka which means inadvertent errors. Thus, poka yoke more or less translates to avoiding inadvertent errors.
Example: The best example for pokayoke are following 1. Washing machine will not spin the cloths until the cover is closed 2. Smoke detectors provides warning when there is smoke and possibility of fire
The objective is to achieve ZERO DEFECTS Poka yoke is more of a concept than a procedure. Thus, its implementation is governed by what people think they can do to prevent errors in their workplace, and not by a set of step-by-step instructions on how they should do their job. Identify the repetitive process (coding) Document the controls needed (coding software, claims edits) Eliminate the non-value adding tasks (repeated calls to payers for denied claims) We suggest implementation of the following: Dual code the charts and document the common codes Develop the cheat sheet with ICD-10 codes Develop a system (manual or automated) for coding issues The following techniques can be used Warning: System Alerts (CMS-GEM tools, code translators are good for this) Facilitation: Employ techniques to make work easier Detection: Detect the mistakes before progressing further (can be done by developing Documentation Guidelines) Replacement: You may need to upgrade the existing PMS/EMR to support the ICD-10 codes Mitigation: Minimize the impact of errors (appropriate training is an option) Advantages: Makes the process error free Eliminates the need for inspection Relief from redundant tasks Eliminate the waste
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VOB: Voice Of Business

Understanding the key business issues is Voice Of Business. It acts as a source for identification of major improvement area. Voice Of Business is the needs, wants, expectations and preferences both spoken and unspoken of the people who constitute the business itself.
Voice Of Business (Clinics/Hospitals/Healthcare Facilities)

1. 2. 3. 4. 5. 6. 7. 8. 9. Deliver irresistible value Provide proper healthcare Increase the cash flow Cut down the costs of business management Follow the coding and billing guidelines Get paid properly for the services rendered More specific codes will reduce/prevent denials from payers Bear significant direct and indirect costs in order to accommodate a vastly different code set Change in the business process of practice, as the extent and amount of clinical documentation will increase 10. Thesizeofapracticeandvendorcostsplayamajorpartintheoverallcostofthetransition 11. Development of the advanced analytical capabilities, which will improve the patient management 12. The cost involved for training and implantation of new process 13. There will be increase in the operational cost 14. Migration to new system will effect the productivity of the business 15. Improved utilization management through the effective use of codes by payers and providers 16. Will impact the bottom line of the business 17. Implementation will have an impact on a cash flow 18. Additional cost will in the form of IT infrastructure change, training, productivity loss, etc., 19. Possibility of a regulatory issue 20. Impact on the business due to challenges at the end of business associates
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VOP: Voice Of Process

Voice Of process is the statistical data generated by quality control measures, indicating the stability and instability of a process. It is use to identify and prioritize the critical elements in the process and then segmenting them into priority and non-priority processes. Voice Of process also evaluates the challenges, defects and opportunities in the process.
Voice Of Process
1. Need for IT upgradation 2. Implement 5010 ANSI standards for the claim submission 3. Changes in the claim form 4. Changes in coding conventions 5. Chance of more denials 6. Need to design and develop a new process 7. Design the new super bills 8. Changes in office hierarchy 9. Increase in the complexity of codes 10. The need for significant modification to all processes, including converting existing computer software and/or acquiring new software, plus a likely need for new hardware 11. Mapping from CPT to ICD-10-PCS would be difficult because of the radical difference in concepts and structure 12. Physicians spending extra time with each patient will impact the number of patients visited per day 13. Improvement in the documentation and specificity of the diagnosis 14. More specific code will improve the coding accuracy, thus reduce the ambiguity and misinterpretation 15. Implementation will help in detection of frauds 16. Will face crunch of trained manpower 17. Productivity loss
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18. Settinguparationaltimescheduletomakechangeswithoutdisruptingthe practice Increase in the work load for the staff 19. Establishing new system and methods to explicitly document patient service and procedure to achieve accurate coding 20. Will face challenges in the integration with the systems of clearing house, vendor and health plan contracts 21. Will impact current reimbursement patterns of providers and related payment policies 22. Backlog because of drop in the productivity 23. Training hours of the staff will be additional cost plus the loss of working hours 24. Increase in the claim denials, which will delay the receiving the payment from the payers for the services provided
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VOC: Voice Of Customer

ICD-10 implementation is Mandatory. The department of Health and Human Services (HHS) has mandated the replacement of the ICD-9-CM code sets medical coders and billers in the United States now to report health care diagnoses and procedures with ICD-10 code sets, effective October 1, 2013. Let us assume the Voice Of Customer as Voice of Regulation/Health Plans.
Voice Of Customer
1. Implement ICD-10 by October 1, 2013 2. Receive the claims with ICD-10 codes 3. Accuracy in the ICD-10 coding 4. Consistency and relevancy of the medical record documentation 5. Save time by process automation 6. Manage healthcare costs 7. Improvement in the quality of data captured 8. Addition of codes of new diagnosis 9. Streamlined and more transparent healthcare delivery system 10. New Insurance products in the market to cater changing customer needs 11. Change in the coverage of insurance plan and riders 12. Will have to pay more premiums for the services 13. Will be change in the payment policies of payers 14. Has to perform more detailed examination to establish the specificity of codes
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VOE: Voice Of Employee Employees are the biggest assets of any organization. The employee voice brings about personal ownership and a sense of responsibility that employees are directly contributing to the businesss success. The Voice Of Employee is also linked to the voice of the process in that problem areas can be identified, improve communication and encourage staff retention. Voice of Employee 1. Resistant to change 2. Comfortable with old system 3. Opt for retirement 4. Need to spend money for learning new coding system 5. Practice hundreds of Medical Records coding may be time consuming 6. Unlearning and learning new code will be taxing for the coders 7. The new codes implementation will affect the productivity of the employee 8. Not ready to undergo stress and pressure that new coding system might bring 9. Employee will take time to come up the learning curve to perform at their optimum level 10. Brings new opportunities for existing coders to upgrade their skills 11. Low engagement level with the new system and procedures 12. Need support and guidance to enter the correct codes 13. More prone to make mistakes while coding I have heard from a good number of coders that they will retire before ICD-10 is implemented but I hope they are not serious, says Kathy DeVault, a professional practice manager at AHIMA. The newly-appointed president of the AAPC, Deborah Grider, agrees that veteran coders will be more important than ever for ICD-10. The coders I talk to who are in their 50s, including me, will learn ICD-10 and help the new coders transition, because these coders are very used to rapid change in the industry, Grider says. I think the shortage will be widespread if we dont make sure we mentor new coders and welcome them into the industry.
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Important Skills Youll Need For ICD-10 Implementation: 1. Ability to foresee big picture: The ICD-10 implementation will bring a conspicuous change in present healthcare scenario and will affect each constituent of Healthcare Information Management. The most critical constituent would be Revenue Cycle Management. Assignment of appropriate codes leads to accurate coding and reimbursement. As the number of codes will increase by six times and there is one to many mappings, coders will face tough time assigning the correct codes. Proper Planning is required to: Analyze the clinical documentation whether it supports the ICD-10 terminology Develop the documentation guidelines Educate the staff Discuss with EMR Vendors about the 5010 version In a large prospect the task is tough and challenging. You need to understand end-to-end process and coordinate with different agencies and people. People with required knowledge, broader views and ability to execute will facilitate the ICD-10 Transition smooth and fail proof. 2. Ability to break through assumptions: Biggest obstacles are assumptions and wrong estimations. Its too early to prepare for the ICD10, ICD-10 impact is not much, etc. These assumptions are wrong. If the reimbursement process delays, it will have an impact on entire facility operations. Holding onto these beliefs makes ICD-10 transition a difficult task. 3. Ability to thrive on change: There is no other way but to change; it is going to happen whether you like it or not. Make the change work for you, for your organization and patients. Changes will impact all departments - ICD-10 impact will be over all departments. Need multi-disciplinary approach. Mapping is not plug-and-play - GEMs are complicated. There is no one to one mapping. One code maps to many codes and many codes maps to one code. Crosswalking is not a substitute for implementing ICD-10 and coding directly in ICD-10. Huge impact on providers, facilities, and payer side Extensive knowledge is must (need subject matter experts in all departments) - ICD-10CM and ICD-10-PCS coding knowledge, anatomy and physiology, medical and surgical procedures, medical terminology, etc. Training is CRITICAL
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Important Skills Youll Need For ICD-10 Implementation: Based on industry feedback regarding the need for more time than the 40 hours of training, we estimated for inpatient coders to learn both ICD10CM and ICD10PCS, we will increase our estimate of the number of hours of training that inpatient coders will need to learn ICD10CM and ICD10PCS from 40 hours to 50 hours, well within the commenters suggested range of as little as five hours of training, to a maximum of 80 hours. Federal Register / Vol. 74, No. 11 / Friday, January 16, 2009 / Rules and Regulations, Page 3344. 4. Ability to collaborate work: This is a very important skill you need to develop. You need to coordinate with the HIM directors, IT specialists, EMR Vendors, Physicians, Compliance Managers and especially budget/revenue department. Team-up, share, take responsibility, listen, value others opinion and develop solutions that would work for great benefits. 5. Ability to gather data: In God, we trust all others bring data. Gathering data is crucial to separate factual observation from opinion and guess, explain facts accurately. 6. ICD-10 coding skills: A typical coders world consists of coding and reimbursement. As the implementation is segmentalized into different segments like budget planning, IT, etc., coders segment is documentation and coding. Coders need to develop guidelines and code accurately so that reimbursement is not affected. This can be achieved only by thorough knowledge of ICD-10 code set.
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Brain Storming Sessions

ICD-10 codes are extensive and specific. There are almost 154,000 codes. Incorporation of ICD-10 codes is the biggest change in standard healthcare coding systems in decades which will not only drastically increase but also change the structure of the codes that providers and payers have been using for the past three decades. Brain Storming is a good way to comprehend the present status of coding system and planning a road map to move forward for implementation and encourage inputs from team members. A brainstorming session is a tool for generating as many ideas or solutions as possible to a problem or issue. It is not a tool for determining the best solution to a problem or issue. Before beginning any effective brainstorming session, ground rules must be set. This doesnt mean that boundaries are set so tightly that you cant be creative. It does mean that a code of conduct for person to person interactions has been set. Its when this code of conduct is breached that people stop being creative. 1. There are no dumb ideas. Its a brainstorming session, not a serious matter that requires only serious solutions. Remember, this is one of the more fun tools of quality, so keep the entire team involved! 2. Dont criticize other peoples ideas.This isnt a debate, discussion, or forum for one person to display superiority over another. 3. Build on other peoples ideas.Often an idea suggested by one person can trigger a bigger and/or better idea by another person. Or a variation of an idea on the board could be the next velcro idea. It is this building of ideas that leads to out-of-the-box thinking and fantastic ideas. 4. Reverse the thought of quality over quantity.Here we want quantity; the more creative ideas the better. As a facilitator, you can even make it a challenge to come up with as many ideas as possible and compare this teams performance to the last brainstorming session you conducted. The following topics can be covered in Brain Storming Sessions 1. What are the Potential areas that are effected by the ICD-10? 2. What are the potential areas that need to be on focus initially? 3. IT Upgrades 4. Set the timelines for ICD-10 Training 5. Practicing ICD-10 Coding 6. Method to stay updated with the changes 7. Establish proper communication system 8. Assign role-based tasks for ICD-10 Implementation
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Brain Storming Technique, Guidelines, And Preparation

Proven Group Technique for Generating New Ideas on a Particular Topic Helps in creativity and innovation Results depend upon selection of right team For ICD-10 Implementation Project, we suggest the team should contain stakeholders who hold an interest in the project We suggest to use the following Explain Y = f (X) Show Cause and Effect Diagram Explain the SIPOC Collect the ideas Formulate the theories Identify the right resource Guidelines for ICD-10 Team Leader Welcome all ideas Dont criticize Give sufficient time for each participant Document all ideas Formulate the ideas Communicate with the stakeholders Brain Storming Preparation 1. Select the right person as lead for the brain storming, Office Manager or Senior coder is good 2. The participants must have some working knowledge of Medical Coding and Billing 3. Write clearly the objective/s of the Brain Storming Session
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Budget And Implementation Planning Budget planning should be initiated at the earliest. Budget estimation is required for: Software upgrade Hardware upgrade Training Coders salaries (most of the consultancy firms are looking for qualified ICD-10 experts) Educating physicians Developing documentation guidelines Identify your current systems and work processes that use ICD-9 codes. It is likely that wherever ICD-9 codes now appear, ICD-10 codes will take their place. The following need to be updated: 1. Superbills 2. EMR 3. Medical Billing Software 4. Insurance Contracts 5. Reporting Tools Talk to your EMR Vendor, analyze the EMR/PMS for the following 1. 5010 support 2. ICD-10 coding support 3. Dual coding capability Discuss implementation plans with all your clearinghouses, billing services, and payers to ensure a smooth transition. Contact your payers, clearinghouse, billing service with whom you conduct business, ask about their plans for the Version 5010 and ICD-10 compliance, and when they will be ready to test their systems for both transitions. Talk with your payers about how ICD-10 implementation might affect your contracts. Because ICD-10 codes are much more specific than ICD-9 codes, payers may modify terms of contracts, payment schedules, and/or reimbursement. Identify potential changes to work flow and business processes. Consider changes to existing processes including clinical documentation, encounter forms, and quality and public health reporting.
Be Proactive, Dont Wait
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Budget And Implementation Planning Assess staff training needs. Identify the staff in your office that code, or have a need to know the new codes. There are a wide variety of training opportunities and materials available through professional associations, online courses, webinars, and onsite training. If you have a small practice, think about teaming up with other local providers. You might be able, for example, to provide training for a staff person from one practice, who can in turn train staff members in other practices. Coding experts recommend that training take place approximately six months prior to the October 1, 2013 compliance date. Budget for time and costs related to ICD-10 implementation, including expenses for system changes, resource materials, and training. Assess the costs of any necessary software updates, reprinting of superbills, training and related expenses. Conduct test transactions using Version 5010/ICD-10 codes with your payers and clearinghouses. Testing is critical. Allow yourself enough time to first test that your Version 5010 transactions, and subsequently, claims containing ICD-10 codes are being successfully transmitted and received by your payers, clearinghouses, etc. Check to see when they will begin testing, and the test days they have scheduled.
The Project may fail if

Top Management does not buy the idea Employees are not committed Team Leader fails to empower the team No visible leadership Not interested in the change Budget constraints Not spending enough time Not delivering right picture to the management Procrastination Lack of appropriate training
If you cant measure it, You cant manage it
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Six Sigma Project Charter

Project Title WHAT: Business Case WHY: Project Leader WHO: Team Leader WHO: Team Members 1. 2. 3. 4. 5 Problem Statement: WHY and WHERE
Support Staff 1. 2. 3. 4. 5
Opportunity Statement: WHY and WHERE
Goal Statement: HOW MUCH
Assumptions, Constraints
Stakeholders: WHO
Departments Impacted
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Deadlines On Way To ICD-10 Implementation

Preliminary Plan-WHEN Gap Analysis Dual Coding of Charts Training Plan Analyze the IT Vendor Contact and Finalization Budget Planning Implementation Planning Training and Education Develop Documentation Guidelines Dual Coding of Charts (after implementing documentation guidelines as per ICD-10) Testing the PMS/EMR/EHR for ICD-10 Compatibility Assessment of Coders to Evaluate the ICD-10 Coding Skills Go-Live Target Date Actual Date
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Notes:

Six Sigma Approach For Successful Icd-10 Implementation

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SIX SIGMA APPROACH FOR SUCCESSFUL ICD-10 IMPLEMENTATION

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ICD-10 CODERS ACADEMY

Customer Service Phone: 321-332-0766 Fax: 888-786-8611 E-Mail: info@icd10codersacademy.com

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Why the Name Six Sigma

Benefits of Six Sigma

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Levels of Sigma Performance:

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How good we are today:

Key to the success of Six Sigma

Focus on causes of Variation

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Six Sigma Defects Metrics

Failure Mode Effect Analysis (FMEA)

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Key Ingredients of FMEA

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Six Components of Six Sigma

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Six Sigma Processes

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Change/s Required In Organizations Culture

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Six Sigma Implementation

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Six Sigma Approach for ICD-10 Implementation

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Lets Get Started!!!

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Six Sigma Key Tools

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How To Proceed Step-By-Step: Step 1: Define the Project

Project Planning/Change Management/Risk Assessment

Step 2: Identify Requirements

Step 3: Select Concept

Step 4: Develop Design

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Eight Discipline Problem Solving: