CMS to forgive ICD-10 coding errors for 1 year after deadline

For years, providers groups have clashed with the U.S. Centers for Medicare and Medicaid Services over the implementation of ICD-10. The new set of medical billing codes, which represent several thousand more options than the currently used ICD-9, offer both increased clinical accuracy – according to supporters – as well as further financial burdens – according to detractors. After being subjected to numerous year-long delays and with the Oct. 1, 2015, deadline fast approaching, a new development may signal that ICD-10 will, after all this time, finally be ready for practical implementation. 

In a joint press release with the CMS, the American Medical Association, a longtime opponent of the ICD-10 transition, announced that providers who process incorrect codes will not be punished with rejected claims across the board. Instead, if the codes can be proven to exist in the same broad category as the ideal ones, the CMS said that it would reimburse providers for rejected claims for a one-year period after the October 1 transition. With this announcement, many industry observers believe that ICD-10 will be implemented in the fall.

Federal officials and provider groups have done something rare: agree.

Finding common ground

Dr. Steven Stack, president of the AMA, and Andy Slavitt, acting administrator of the CMS, have rarely agreed on how healthcare reform should be executed on the national and local levels. However, the two officials were able to agree that, with the allowances afforded to providers who process technically incorrect but clinically sound claims through the new ICD-10 codes come October 1, the transition may finally be within arm's reach.

"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," Stack said in the statement. "The actions CMS is initiating today can help to mitigate potential problems."

Slavitt added that the ICD-10 codes, while not perfect, will be supplemented by certain solutions to help providers who make good-faith efforts to process claims as accurately as possible.

"As we work to modernize our nation's healthcare infrastructure, 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," Slavitt said. "With easy-to-use tools, a new ICD-10 Ombudsman and added flexibility in our claims audit and quality reporting process, [the] CMS is committed to working with the physician community to work through this transition."

Changing tunes

While some observers may be surprised to see the CMS meeting provider groups halfway in the ICD-10 preparation process, more shocking is the fact that the AMA is publicly endorsing the new billing codes after years of bitter opposition. Healthcare Dive reported that only two months ago, Stack said ICD-10 should be skipped entirely in favor of preparation efforts for ICD-11, which is scheduled for global release by the World Health Organization in 2017.

Healthcare Finance News explained that, instead of a sign of a directionless organization, the sudden policy change of the AMA is more likely an indication of negotiations between key members of the physician community and the federal government. Without the explicit backing of the AMA, other provider groups may have felt more justified in their stark opposition to ICD-10. However, now that Stack has come out and put his stock in the new billing codes, it may signal to partnering groups that opposing ICD-10 is a meaningless fight. Instead, the better option may be to mitigate the expected workflow disruptions as much as possible in the time that remains.

Solutions for small practices

The CMS' shift toward allowing reimbursements for certain rejected claims should be a boon to many small practices concerned over roadblocks to critical compensation. However, this also means that physicians will have to prove that their "incorrect" codes were in fact accurate by some clinical standards. For this, a comprehensive software system that tracks all decisions can make claims reconciliation with the CMS much smoother. Without it, providers may have to spend more time digging through old records just to receive what they are due, thereby missing out on new revenue streams while chasing old ones.