A provider's guide to developing an ICD-10 financial risk assessment RFP

Developing a Request for Proposal (RFP) is as complex a challenge as developing the response to an RFP. This is especially true when buyers are creating the RFP for a service or an offering that is new in the market. We see this situation playing out in the ICD-10 space where providers are looking for ICD-10 financial risk assessment services as a precursor or part of their overall assessment activities.

The benefits of performing a financial risk assessment are clear:

  • The ability to project impact to revenues for the entire organization.
  • The ability to identify the specific negative dollar impacts to the mandated ICD-10 conversion down to the code, department/specialty and physician level.
  • The ability to better prioritize training, documentation and system/IT conversion activities.
  • The ability to identify potential clinical documentation improvement (CDI) opportunities within the ICD-9 code set that will optimize reimbursements and mitigate financial risk in ICD-10.

Providers realize that these benefits have immediate and lasting value. Consequently, there has been a recent uptick in the number of ICD-10 financial risk assessment RFPs in the market. However, because of the novelty for this need within the industry, there are few resources or tools to assist providers with their RFP process. Often times what is issued is based on old technology or software RFPs that don’t provide a meaningful way to compare ICD-10 financial risk assessment vendors. The existing questions may not get to the real value of the solutions or how each vendor will address an organization’s specific needs.

To produce a more effective ICD-10 financial risk assessment RFP, a provider should start by asking the following four key questions:

  1. Do I understand what it is that I am buying?
  2. Does my organization have clear objectives/goals for our ICD-10 financial risk assessment?
  3. Do I understand the outputs of an ICD-10 financial risk assessment and how they will meet my objectives?
  4. Do I know who needs to be involved in the evaluation process?

Do I understand what I am buying?

This seems like a simple question to answer; but, in fact, it is very complex. The typical approach is to start by performing market research, which helps determine the market players, their individual value propositions, and what differentiates each product or service. This information is usually available through analysts and research firms for more established offerings. However, in the case of ICD-10 financial risk assessments, this level of detailed analysis doesn’t exist. Information and perspectives on ICD-10 are readily available, but there is nothing out there that compares financial risk assessment services and solutions.

With a list of ICD-10 financial risk assessment vendors in hand, you can start to target the companies that will receive your RFP. This brings us to the next step – understanding and communicating your ICD-10 financial risk assessment objectives.

Does my organization have clear goals ICD-10 risk assessment?

Having a clear set of ICD-10 financial risk assessment objectives will help you better compare the available solutions based on what matters most — your business needs. Each provider type will have a different set of objectives depending, in large part, on how directly ICD-10 impacts revenues. For example:

  • An acute care/inpatient facility’s objectives should reflect the ability to quantify the financial impact of an ICD-10 implementation in dollars.
  • An outpatient facility’s objectives should reflect the more “indirect” risk that ICD-10 poses to operations and potential revenue impacts through increased denials.
  • A critical access hospital’s objectives should reflect the need to streamline the conversion and address areas of unspecified coding in ICD-9.

How you plan to use the assessment reports and outputs should also be accounted for in your objectives. Some organizations may chose to focus on prioritizing planning efforts while others may be more interested in driving stakeholder engagement. Example objectives include:

  • To drive prioritization of the organization’s ICD-10 conversion plan by financial risk.
  • To focus training and education prioritization so it is aligned to the areas at greatest risk of negative reimbursement impacts.
  • To drive alignment between the business and IT around the common goal of addressing and mitigating ICD-10’s potential negative financial impact.
  • To engage stakeholders from across the organization and align key leadership around the organization’s ICD-10 initiative.

To assess a vendor’s ability to meet all your objectives, it is helpful to issue a Request for Information (RFI). These requests provide an opportunity to communicate your ICD-10 financial risk assessment objectives, gather information on each vendor’s capabilities, and assess how well each vendor’s solution fits with your stated objectives. It is important to note that an RFI does not typically include pricing questions; those questions are usually saved for the full RFP. RFIs are also a good way of assessing each vendor’s credentials.

RFIs do not have to be as detailed as RFPs. While some buyers elect to use the RFP questions that they plan to issue, others take a more informal approach and ask for an overview of capabilities, deliverables, a typical timeline and resource requirements. Information on resources is further discussed in the “Do I understand who needs to be involved in the evaluation process” section below. The important thing to remember is the goal of the RFI — to determine the capabilities of each vendor and if they can potentially meet your ICD-10 financial Developing and issuing the RFP.

Do I understand the outputs of an ICD-10 financial risk assessment and how they will meet my objectives?
During the bid process, most vendors will provide elaborate diagrams and presentations outlining the benefits of their solution. And while valuable, they do not provide visibility into the tools used to perform the assessment or the outputs of the analysis. The easiest way to get to this information is to request a demo of the system and reports.

Some buyers will actually request a demo before issuing the RFP as a part of the qualification process. Others include the demo as a main component in the RFP and only invite those vendors who are “short-listed” following an initial response review. Either way, it is critical to see the system and the results that will ultimately form the basis of your ICD-10 financial risk analysis.

When setting up the demo, you must clearly define scope, time, scoring and logistics. Think about the specific functionality and outputs you want from your ICD-10 financial risk assessment. Questions may include:

  • What does the analysis software look like?
  • Can I see it?
  • Is it an application, a series of spreadsheet models or something else?
  • How is it deployed (cloud-based, installed locally, etc.)?
  • Is the analysis methodology transparent?
  • How easy are the tool and outputs to read/use?
  • What does the standard report look like?
  • Does the software provide actionable recommendations?
  • Can we create custom reports?
  • How easy is it to customize the 
data that we see?
  • Is there a charge for customized reports?
  • Are there graphs or is the information presented in more of a table format?
  • How easy is it to view the information in different ways depending on the end- user/consumer?
  • Is the analyst team easily accessible and responsive via phone or online? 


During the demo, representation from the groups who will consume the outputs of the analysis and the groups who will help support the assessment is critical. Make sure to communicate the format for the demo to all participants and -- if possible -- capture questions beforehand to have them categorized and consolidated before the 
demo meeting.

Do I know who needs to be involved in the evaluation process?
A good RFP involves stakeholders from the groups impacted by the project. The right number is tricky. Too many, and you will slow down or even halt the RFP process. Too few and you risk a lack of buy-in, and an incomplete understanding of a vendor’s solution and fit. The key is to engage the right stakeholders early in the process. However, even that can be a challenge when it comes to ICD-10 financial risk assessments. It isn’t always clear who should be involved in supporting the assessment.

Starting off, you can assume that representatives from the following groups should be involved:

  • CFO office or personnel responsible for practice finances
  • Personnel responsible for revenue cycle management
  • Health information management
  • Patient accounting
  • Coding and billing
  • Training

  • Documentation
  • Business intelligence/ business reporting

It is also helpful to include questions within the RFI related to roles and responsibilities. That way, you can get an idea of who is typically involved and what the expected time commitment is from each resource. The more detail, the better. This will also help in the evaluation process when weighing different scores and considering each evaluator’s feedback.

Developing and issuing the RFP
Now that you know who the ICD-10 financial risk assessment players are, how well their capabilities align to your organization’s objectives, what the outputs are of each solution, and who needs to be involved in the process, it is time to put together your RFP. Unfortunately, this is where many buyers make the mistake of relying on old, irrelevant software RFPs to evaluate ICD-10 financial risk assessment services.

With all of the work and time that it takes to create an RFP, the real purpose of the process -- to objectively evaluate vendors -- becomes diluted when ill-suited questions are included. While some questions can be repurposed, like those about corporate viability and size, others have to be completely retooled to effectively evaluate each ICD-10 financial risk assessment solution.

Every organization is different and has specific objectives for their assessment. Your questions should reflect your organization’s unique needs and goals for the project.

One last note about pricing

Evaluating price is one of the hardest things to do. Most buyers will immediately throw out the highest and lowest bids as a matter of initial vetting. However, in the case of ICD-10 financial risk assessments, that shouldn’t always be the case. Because this is a new space, the pricing is not yet mature.

There may be wide variances in price and factors such as cloud hosting that can significantly influence cost. So, before flipping to the pricing page or sheet, read through the response to see if the ICD-10 assessment solution provided fits with your organization’s needs and objectives. You may even want to take a page from the public sector and evaluate the price independently from the technical proposal.

Use your business sense and resources because when it comes to ICD-10 financial risk assessments, it is about finding the solution that best meets your needs while delivering the most value.

Dwan Thomas Flowers, MBA, RHIA, CCS, AHIMA-approved ICD-10-CM/PCS trainer and a senior health information consultant for Deloitte; and Paresh Shah, CEO of MindLeaf Technologies contributed to this article. This article is the result of a collaboration between Jvion and the HIMSS ICD-10 Playbook and ICD-10 Task Force.