October 25, 2015

ICD-10 and the Casualty Market: Readiness is Medium to High

By Michele Hibbert-Iacobacci, CMCO, CCS-P

The implementation of ICD-10 for auto casualty has been dependent on what happens with the Centers for Medicare & Medicaid Services (CMS) and the rest of the healthcare industry. 

The only states that have a dependency are states such as Pennsylvania and Florida, which use the Medicare rates for payment in auto claims. Pennsylvania adopted Medicare for no-fault payments in 1990 at 10 percent above Medicare and Florida adopted Medicare rates at two times those of Medicare rates in 2013 – with the stipulation that if the 2007 Medicare schedule pays more, it will use it. How is that for an application for a fee schedule? So these states are really being forced into using the CMS payment schemas for payment of claims.

The only other state that has been entertaining the use of a fee schedule using Medicare rates has been Michigan, but for payment of first-party claims only. Michigan also has toyed with the idea of using provider networks and the state’s workers’ compensation fee schedule as well. Michigan has been a state that has had proposals on changing things up for the last 10 years or so, and to this point nothing has passed. 

Implementing ICD-10 in auto casualty is similar to implementing it for healthcare insurers. Even though these payers are non-covered entities under HIPAA, the plan for the majority of casualty payers has been to implement ICD-10 in order to be consistent. The fact that the providers are covered entities and will be sending information to the payers (and receiving information and payments electronically) is also an incentive.

It is our expectation that readiness is medium to high in the casualty market, yet it ultimately will be up to the insurers on what is accepted for payment in the end. Preliminary statistics after the first two weeks of submitted bills since Oct. 1, 2015 are demonstrating nearly 65 percent of providers are using ICD-10 in P&C.  While the codes submitted may not be perfect initially, the numbers are promising. It is well-understood that not all claims will be submitted using the proper format, especially among those practices and providers that typically have billed in only P&C and WC in the past. It will be important for carriers in casualty to address whether they will take a stand or allow some sort of self-imposed grace period for themselves. 

It’s also important to understand that further delays for the casualty payer and provider will not be beneficial as it pertains to the adoption of ICD-10. ICD-10 has as many benefits for patients as it does on the side of providers, and for the casualty payer in communicating why a patient is being treated for any given incident. For example, for auto claims it is important to understand pre-existing conditions because separate policies are held by the patients – and carriers cover them only for the related injuries.

In the casualty industry, ICD-10 also can provide valuable information for car manufacturers all over the world, creating consistency in creating safer vehicles. ICD-10 actually allows for the identification of the side of the body injured in an auto accident, or whether a burn received by a patient was from an airbag deployment. Undeniably, ICD-10 will impact products and safety considerations for consumers considerably, not just in automobiles, but beyond.

For injuries, the most important aspect of ICD-10 (other than being descriptive) is the encounter codes. Having the ability to know whether trauma codes mark a new encounter, follow-up care, or sequela is hugely valuable for payment of auto and workers’ compensation claims. This distinction also may provide more insight into the severity of an injury and potential treatments that are appropriate due to the specificity of the codes. The additional information will cause efficiency gains for the insurer and provider because less clarification and back-and-forth communication will be required.

We have an expectation that there will be changes even after implementation, representing matters that our compliance departments are tracking. The inevitable last-minute changes will happen, and carriers may change their implementation plans on how and what to implement, but the end game will ultimately be the same. 

ICD-10 will finally be used consistently throughout the U.S. to support portability of medical information, even in smaller payment industries such as auto casualty.

About the Author

Michele Hibbert-Iacobacci, CMCO, CCS-P, is vice president of information management and support at Mitchell International, Inc., Auto Casualty Solutions. Iacobacci’s responsibilities in senior leadership include managing health Information, litigation support, industry consultation, regulatory compliance, managed care, and professional services. Iacobacci is a Certified Clinical Coding Specialist (CCS-P), Certified Medical Compliance Officer (CMCO), a Fellow in CLM, and a member of CHIA and AHIMA.

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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.

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