Updated on: November 21, 2016

HBMA Conducts Revealing ICD-10 Readiness Survey

Original story posted on: June 22, 2015

Earlier this month, the Healthcare Billing and Management Association (HBMA) surveyed members in an effort to assess their experiences regarding commercial payer, Medicaid, and HIPAA-exempt plan ICD-10 readiness.

Fifty-four member companies participated. Although that may seem like a small number, the average HBMA member processes 350,000-400,000 claims per year. Most members operate in more than one state, and multiple specialties are represented. In addition, HBMA member entities do much more than “just billing.” Our members manage every aspect of revenue cycle and some also act as practice administrators. Because HBMA has such depth and breadth of experience with payers, HIPAA-exempt plans, clearinghouses, practice management systems, coding, claims adjudication, and types of practices, it offers a unique perspective to industry ICD-10 readiness.


Overall, the accurate definition of “ready” again is rearing its ugly head. In spite of the adoption of a standardized definition by a key industry stakeholder group, it seems that “ready” still means whatever the presenter wants it to mean. 

Of concern is that almost 13 percent of HBMA members still do not have software capable of generating ICD-10 claims. Most have been promised that the update will be released in July. Not only is this very late to be taking a first step to allow internal and external testing to commence, but there is no guarantee it will work as expected. For example, some members have reported that their software can and did successfully generate test claims. However, the test environment was carefully structured for that sole purpose – i.e. accepting ICD-10 codes, submitting a correct claim, and processing the result from the payer on a small, tightly controlled sample. Can the software successfully mirror a live environment in which dual processing of both ICD-9 and ICD-10 codes will be required based on payer and date? No. Can the software accept both ICD-9 and ICD-10 codes for the same service and accurately select the correct one to submit based on payer requirements? No. In spite of successful testing, are any of these software products ready? No.

In other examples, some coding software that is ICD-10-ready truly is reporting ICD-10 codes. The problem is that the codes are wrong more often than they are right. In other cases, the coding does not make sense – for example, it will report left, right, and unspecified, as well as initial visit, subsequent visit, and sequelae,  all for the same problem of a right knee injury. Are these products ready? No. Will they help allow for accurate coding by Oct. 1? No one knows.

Opportunities to conduct end-to-end testing with Medicaid plans appear to be sparse. Sixty-three percent of members responding reported that either they, their clearinghouse, or their vendor have not been able to conduct any testing. Given our past experience with various Medicaid plans and their inability to meet other mandated implementation dates, the lack of testing opportunities raises readiness concerns. In a few cases, members reported that testing was limited to specific scenarios. It is doubtful that such restrictive testing can reveal a true measure of readiness.

As expected, the HIPAA-exempt plans vary widely in readiness for the adoption of ICD-10, although it appears that more workers’ compensation plans will implement ICD-10 than other types of liability plans.

Commercial payer testing is growing, although 67.5 percent of survey respondents reported that their specific claims have not been chosen for testing, and 39 percent reported that they were denied the opportunity to test. However, clearinghouses are reporting successful testing with many payers. Of those that have conducted end-to-end testing with commercial payers, 12.5 percent indicated that it was unsuccessful. Other members have reported anecdotally that they were informed that the facility testing was successful, so the payer believes they are ready.

Just over 13 percent of respondents reported that they have been notified that the payer will require more specificity than they do now and/or the most specific ICD-10 codes for payment. Clearly, this is critically important information indicating that many entities may require significant changes in provider documentation and potentially in coding methodology.

To the best of our knowledge, this HBMA survey is the first to delve into whether testing has included specific ICD-10 coding conventions. To me, the most concerning finding of this survey and what it may mean for the healthcare industry is the startling lack of knowledge about how various coding rules will be handled in the payer adjudication systems and whether those conventions were included in test claims adequately.  More than nine in every 10 survey respondents indicated that they do not know if the payer mapping and/or adjudication systems include all the new rules necessary for code sequencing.

Eighty-two percent of respondents do not know if medical necessity and eligibility are determined by all of the diagnosis codes on the claim. Ninety-seven percent do not know if failure to follow the “use additional code” guidelines will result in claim denials or additional documentation requests.

Because there are enormous differences in how these coding guidelines are expected to affect different specialties, it is imperative to know the answers to these questions. If we do not know, and if we have not tested the myriad scenarios, we are not ready.

HBMA is hopeful that other key stakeholders will find this information helpful in their testing and readiness preparations.


Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Holly Louie, RN, BSN, CHBME

Holly Louie is the compliance officer for Practice Management Inc., a multi-specialty billing company in Boise, Idaho. Holly was the 2016 president of the Healthcare Business and Management Association (HBMA) and previously chaired the ICD-10 Committee. Holly is also a national healthcare consultant and testifying expert on matters related to physician coding, billing, and regulatory compliance. She has previously held compliance officer positions in local and international billing companies. Holly is a member of the ICD10monitor editor board and a popular guest on Talk Ten Tuesdays.

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