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ICD-10 Transition Updates

The Centers for Medicare & Medicaid Services (CMS) announced on July 6, 2015, that it would work with the American Medical Association (AMA) to help physicians and health care providers make a smoother transition to ICD-10, which begins October 1, 2015. CMS updated guidance will allow for flexibility in the claims auditing and quality reporting process in order to aid health care providers as they gain experience switching from ICD-9 to ICD-10 code set.

The International Classification of Diseases, or ICD, is used to standardize codes for medical conditions and procedures.These medical codes, used for diagnosis and billing, have not been updated in more than 35 years and contain outdated, obsolete terms.The ICD-10 code will expand the code set from a five (5) to a seven (7) alphanumeric digit combination. The code set is increasing from about 13,000 in ICD-9 to about 68,000 in ICD-10.The use of ICD-10 should advance public health research and emergency response, as well as support innovative payment models that drive quality of care.

CMS confirms they will make four (4) specific and crucial changes to the ICD-10 transition period so physicians and health care providers can provide high quality care without jeopardizing beneficiary livelihood. These changes address:

  • Claim denials – Within the first year following ICD-10 implementation, Medicare claims will not be denied payment nor audited based on the specificity of the diagnosis codes, as long as they are from the appropriate family of ICD-10 codes.This transition period will give physicians and health care providers time to get up to speed on the more complicated code set.
  • Quality reporting penalties – Similarly, CMS will not penalize physicians during primary source verification or auditing for the Physician Quality Reporting System, the Value-Based payment modifier, or Meaningful Use based on the specificity of diagnosis codes as long as they use a code from the correct family of ICD-10 codes. Furthermore, penalties will not be applied if CMS experiences difficulties calculating quality scores for these programs as a result of ICD-10 implementation.
  • Payment disruptions – CMS will authorize advance payments to physicians if Medicare contractors cannot process claims due to ICD-10-based hiccups. An advance payment is a conditional partial payment, which requires repayment, and may be issued when CMS conditions are met.
  • Navigating transition problems – CMS has said it will establish a communication center to monitor issues and resolve them as quickly as possible. Also, at the request of the AMA, CMS will name an “ICD-10 ombudsman” devoted to triaging physician and provider issues.

These new provisions demonstrate the need for a transition period to avoid financial disruptions during this time of tremendous change. These significant improvements for the approaching ICD-10 roll-out will provide a grace period for any mistakes and will help with stability of process and quality of care.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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