On October 1st, the healthcare industry will go through the first large scale coding change in over 30 years with the implementation of ICD-10. This change is broad and will impact medical providers across all disciplines and business sizes. This could lead to a slowdown in payments as providers, billers, and insurance companies adjust to the new coding requirements. Medical providers need to insure they have enough cash available to cover operating expenses for their business in the event that ICD-10 leads to cash flow disruptions.
Implemented in 1975, ICD-9 has been the coding standard for over three decades, classifying medical procedures into approximately 13,000 diagnostic codes. The new coding system ICD-10 has nearly 68,000 codes and significantly more specificity required for each procedure. While ICD-10 will give insurance payers better information on the procedures that are completed, it will put additional burden on medical providers to properly code and maintain records. Practices will need to focus on training their staff to maintain the proper records and implementing the new coding into their billing systems properly.
Medical providers need to make sure they have prepared for the possible delays caused by the coding changes from ICD-10. This is especially true for small businesses in the healthcare field, as many small businesses struggle with the long payment delays, a fact inherent in their business model. The typical 30-60 day payment cycle for Medicare, Medicaid, and private insurance companies could easily extend by a month or more with such a large change impacting the market. Providers should carefully evaluate their cash on hand and understand their cash needs over a period of at least one month. Providers should look to put in place lines of credit or other credit facilities to have easy access to funding if delays are experienced. It is critical to have a solution before the problem occurs.
Provider Web Capital is the ideal financing partner for small businesses in the healthcare field. We offer funding from $10,000 up to $250,000 or more. Our credit approval process is focused on your business cash flows and experience. We have the most flexible repayment terms in the industry; most clients opt for a financing product where payments are made to Provider Web as revenue is received from your third party payers.