How the ICD-10 news is good—and bad—for providers

AMA shifts stance on Oct. 1 deadline

Get the Advisory Board's expert take on this story.

CMS on Monday announced a set of measures to ease the transition to ICD-10 later this year—including issuing payments for incorrect codes in some circumstances.

The initiatives were outlined Monday by CMS and the American Medical Association (AMA). CMS now plans to reimburse physicians under Medicare Part B for claims with incorrect ICD-10 diagnosis codes. In order to qualify, the claims must have a valid ICD-10 diagnosis code, which falls generally in the same family as the correct code. 

If Medicare Part B contractors cannot process claims due to administrative problems within a set timeframe, CMS may authorize advanced payments to doctors.

The grace period will extend for one year after the October 1, 2015, implementation deadline.

CMS also will extend the same ICD-10 code flexibility to physicians or other eligible professionals so they are not penalized under the Physician Quality Reporting System, the Value-Based Payment Modifier program, or the meaningful use program. The flexibility will apply to all quality reporting during program year 2015.

This CMS guidance and flexibility only applies to professional claims, so inpatient hospital claims will still need to be correctly coded on October 1 in order to avoid denials or incorrect reimbursement.

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In concert with AMA, CMS plans to provide a range of online resources—including webconferences and training documents—to aid providers in the transition. The agency will also appoint an ICD-10 Ombudsman to help oversee the transition.

Shift in AMA's stance

AMA's decision to partner with CMS on ICD-10 implementation is a striking change for the organization, which supported legislation earlier this year to bar HHS from implementing the transition, Virgil Dickson writes for Modern Healthcare.

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AMA President Steven Stack says, "ICD-10 implementation is set to begin on Oct. 1, and it is imperative that physician practices take steps beforehand to be ready."

CMS acting Administrator Andy Slavitt says that "CMS is committed to working with the physician community" to manage the transition. "The coming implementation of ICD-10 will set the stage for better identification of illness and earlier warning signs of epidemics, such as Ebola or flu pandemics," he adds (Dickson, Modern Healthcare, 7/6 [subscription required]; Bowman, FierceHealthIT, 7/6; Goedert, Health Data Management, 7/6; AMA release, 7/6; CMS guidance, 7/6).

The Advisory Board's take

Ed HockEd Hock, Managing Director

This is great news for independent physician practices and hospitals that own large physician practices. There's been significant worry that smaller practices don’t have resources to prepare adequately and have been further behind. This gives them leeway to get up to speed.

The bad news is that increased flexibility does not apply to IP or technical claims reimbursement.

With those, it's incredibly important to have codes fully correct so that you don’t risk inadequate reimbursement or denials. In fact, this could create additional complexity for hospitals as they try to get their physicians to fully document to a level of ICD-10 specificity on their IP claims. If physicians personal reimbursement stream has this extra flexibility, there could be adverse incentives for them to quickly get up to speed on the new coding and documentation requirements.

You have a lot to do for ICD-10. We help you do it right.

Your ICD-10 preparations are most likely underway, but how do you know your plan is getting you where you need to be? Learn how Revenue Optimization Compass gives you visibility into your performance so you can effectively protect your revenue now and after the transition.

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