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Updated on: November 21, 2016

ICD-10: What a Long, Strange Trip…

Original story posted on: July 13, 2015

Lately it occurs to me what a long, strange trip it's been.”

No sooner had custodians cleaned up the remaining debris from the three-night “Fare Thee Well” concert by the Grateful Dead at Chicago’s Soldier Field last week than the Centers for Medicare & Medicaid Services (CMS) announced last Monday an agreement with the American Medical Association (AMA).


In a joint news release with the AMA, CMS said it would not deny claims under the Part B physician fee schedule (PFS) as a result of ICD-10 coding errors for 12 months—a partial concession to the AMA wanting a two-year grace period.

CMS said that I-10 coding errors wouldn’t trigger penalties under the Physician Quality Reporting System, Value-Based Modifier, or Meaningful Use initiatives. CMS also said it would lend advanced partial payments to providers if the change from I-9 to I-10 caused internal problems that might slow down payments.

Indeed, what a long and strange trip it’s been for the nation’s healthcare system to implement the new code set before the compliance date of Oct. 1, 2015.

Keep on Truckin’ 

To date, ICD-10 has survived the closely watched hearings on the flawed sustainable growth rate formula that, ultimately, contained no delay language in the final $200 billion Medicare reform package. And ICD-10 has dodged bullets from Republican lawmakers who attempted to attach amendments to pending legislation such as the recently passed Labor and Health and Human Services bill.

Less than three weeks ago, four of the country’s largest state medical societies signed a letter petitioning CMS acting administrator Andy Slavitt avowing to continue to lobby Congress to stop or delay ICD-10 implementation.

“We want you to know that many of us will continue our efforts in Congress to stop or delay ICD-10 implementation,” the letter stated. “But protecting our patients and their physicians is far more important to us than a political victory,” concluded the signers, including representatives from the California Medical Association, the Florida Medical Association, and the Texas Medical Association, and the Medical Society of the State of New York.

The “big four,” as they described themselves in their letter to Slavitt, insisted that CMS establish a two-year ICD-10 “grace period.” Specifically, the authors wanted CMS not to penalize physicians for errors or mistakes; that physicians would not be subject to audits by the Recovery Auditors (RAs); that physician payment would not be reduced or withheld as a result of ICD-10 mistakes; and, finally, that advance payment would be made in the event claims would be denied.

Back in May, Rep. Ted Poe (R-Texas) introduced H.R. 2126, a bill that would “prohibit the Secretary of Health and Human Services (HHS) from replacing ICD-9 with ICD-10 in implementing the HIPAA code set standards.”

Two weeks later Rep. Diane Black (R-Tenn.) introduced H.R. 2247 that would mandate an 18-month transition period for testing the submittal of ICD-10 claims.

Capping off last week’s policy flurry was the introduction last Friday of a bill to provide a safe harbor period for the transition from ICD-9 to ICD-10 by allowing healthcare providers to submit claims in both ICD-9 and ICD-10 was introduced today in the House. H.R. 3018, the Code-FLEX act, provides for a period of dual coding for six months. The bill was introduced by Reps. Marsha Blackburn (R-Tenn.) and Tom Price, MD (R-Ga.).

Last Monday’s published agreement between CMS and the AMA acknowledges that the AMA saw the inevitable—that the momentum had shifted from the possibility of delays to an earnest desire to move on.

In the joint announcement made on Monday, Slavitt wrote that CMS would provide new tools and a new ICD-10 Ombudsman and would be “flexible in our claims and quality reporting process.”

The Lights All Shining on Me

AMA president Steven J. Stack, MD, was quoted in the announcement as saying that the AMA appreciated the new policies coming from CMS.

“We appreciate that CMS is adopting policies to ease the transition to ICD-10 in response to physicians’ concerns that inadvertent coding errors or system glitches during the transition to ICD-10 may result in audits, claims denials, and penalties under various Medicare reporting programs,” said Stack. “The actions CMS is initiating today can help to mitigate potential problems. We will continue to work with the administration in the weeks and months ahead to make sure the transition is as smooth as possible.”

In an accompanying guidance CMS sought to assure physicians of its support, including an ICD-10 Ombudsman to “help receive and triage physician and provider issues.” CMS said it would also:

  • Set up a communication and collaboration center for monitoring the implementation of ICD-10 to identify and initiate resolution of issues associated with transitioning to ICD-10.
  • Not permit Medicare Administrative Contractors (MACs), the RAs, the Zone Program Integrity Contractors (ZPICs), and the Supplemental Medical Review Contractor (SMRC) to deny physician claims billed under the Part B physician fee schedule based solely on the specificity of the ICD-10 diagnosis code as long as “the physician/practitioner used a valid code from the ‘right family’ for a period of 12 months.”
  • Acknowledge that it is possible a claim could be chosen for review for reasons other than the specificity of the ICD-10 code and the claim would continue to be reviewed for these reasons by the third quarter of 2016.
  • Not subject physicians or other Eligible Professionals (EP) to the Physician Quality Reporting System (PQRS), Value Based Modifier (VBM), or Meaningful Use (MU) penalty during primary source verification or auditing related to the additional specificity of the ICD-10 diagnosis code, as long as the physician/EP used a code from the correct family of codes. An EP would not be subjected to a penalty if CMS experiences difficulty calculating the quality scores for PQRS, VBM, or MU due to the transition to ICD-10 codes.
  • Make an advance payment available in the event the Part B Medicare Contractors are unable to process claims within established time limits because of administrative problems. CMS said it does not have the authority to make advance payments in the case where a physician is unable to submit a valid claim for services rendered.

The Tipping Point

What was the tipping point for CMS and the AMA to come to this agreement?

“With less than 90 days to go before implementation, I believe that AMA recognized that there would not be any Congressional action to delay ICD-10 any further, that Medicare would be ready, and that most of the industry would be prepared,” said Stanley Nachimson of Nachimson Advisors and former senior technical advisor in the CMS Office of eHealth Standards and Services, in an email to ICD10monitor. “The AMA recognized it had to do something to protect its members from consequences of its delays and consequences of incomplete physician implementation.”

They Know They Better Get Goin’

There has been nearly a decade-long resistance by the AMA to ICD-10, so when the announcement was made last Monday healthcare professionals were asking, “Who blinked?”

Was this a concession on the part of CMS or the AMA?

“There was give-and-take from both sides,” Nachimson suggested. “CMS recognized that physicians may have some initial difficulty with ICD-10 coding, so they provided some transition relief. The AMA agreed to move forward on assisting providers with implementation in a strong manner.”

Although the AMA wanted a two-year grace period from Medicare auditing for improper code usage, CMS has granted a 12-month window. What’s likely to be the fallout of a one-year grace period?

“Physicians will have to realize that they must use ICD-10 codes for services on and after Oct. 1, and those codes must be appropriate,” Nachimson said. “They (physicians) will have a little more time to get used to documenting and coding to the greatest specificity in ICD-10, but they still have to move towards that.” 

Nachimson is concerned, however, that physician might take advantage of the 12-month transition period and use it as a delay tactic.

“I hope that they use it as a transition time and not think it is another postponement,” Nachimson said. “We will have to see.”

Got My Chips Cashed In

“This is really the first recognition on the part of the administration that there may be serious issues with claim adjudication following the Oct. 1 compliance date,” said Robert M. Tennant, director of health information technology policy at the Medical Group Management Association (MGMA).

While the CMS/AMA announcement was not a surprise to Tennant, he said many in the industry anticipated CMS would be taking some action.

In referencing the CMS policy that Medicare review contractors won’t deny physician claims billed under the Part B physician fee schedule “through either automated medical review or complex medical record review based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family,” Tennant said that policy is a critical step for the agency.

“There will be considerable confusion following the compliance date regarding which code to use, so adding this flexibility is important,” said Tennant, noting, “However, this guidance only applies to Medicare and not to commercial health plans.”

According to Tennant, each individual health plan will need to make its own decision regarding the level of granularity it requires paying a claim.

“We are hopeful that commercial health plans adopt a similar approach and address an important area of concern for physician practices,” said Tennant.

Tennant said the MGMA continues to be concerned about a significant number of practices that have not yet received their practice management system and/or EHR software upgrades and are unable to submit ANY ICD-10 code—let alone a granular one.

“Our recent member survey suggests that about one in five practices still submit claims using the Version 4010 format—a format that does not permit use of ICD-10 codes. These tend to be the smaller practices with fewer financial resources. Keep in mind, these vendors are not HIPAA-covered entities and thus are not required to implement ICD-10 solutions for practices.”

Since, according to Tennant, CMS doesn’t appear to have solution for this issue, it is his hope that Congress will introduce legislation to assist these practices.

“Similarly, in terms of advance payments, while this may prove helpful, it will only be available if the claim adjudication problem is on the Medicare Administrative Contractor (MAC) side, not the practice preparation side,” said Tennant. “For example, should a practice not receive its software upgrade in time and is unable to submit ICD-10 codes, it will not be able to apply for these advance payments.”

Indeed, what a long, strange trip it’s been.



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.
Chuck Buck

Chuck Buck is the publisher of ICD10monitor and is the executive producer and program host of Talk Ten Tuesdays.

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