The federal government’s decision to let four state Medicaid agencies temporarily translate ICD-10 codes into ICD-9 codes because they haven’t completed remediation work and cannot perform payment calculations using ICD-10 codes might not be so temporary. Whether the policy expands to other states isn’t yet clear.

The states permitted to do a workaround, as first reported in Modern Healthcare, are California, Louisiana, Maryland and Montana. Most state Medicaid agencies fully outsource Medicaid operations to contactors and are ready for ICD-10, says Pat Kennedy, president of PJ Consulting in Rockville, Md., which specializes in electronic data interchange and insurers. But others don’t outsource all functions with these four states among them, and they found some in-house problems, he adds.

According to Kennedy, there are rumors that three other Medicaid agencies may face the same issue. A spokesperson for CMS, asked if more states may need a similar arrangement, sidestepped the question and replied that the four states are the only ones using a backwards crosswalk in their claims processing systems to convert ICD-10 claims to ICD-9 to adjudicate fee-for-service claims. “Each of these states will be accepting and storing ICD-10 claims to support any provider appeals and future data integrity initiatives. We have encouraged all states to communicate with their provider community to ensure that the process is as clear and transparent as possible.”

Kennedy expects the workarounds to last for several months and in the worst case not longer than six months. He is not aware of Medicare contractors or major national and regional payers having similar issues. CMS did not publicly put a number on how long the workarounds will last.

Also See: Is CMS Really Ready for ICD-10?

Robert Tennant, director of health information technology at the Medical Group Management Association, says the four states haven’t fully updated their adjudication engines. They will accept claims with ICD-10 diagnoses, then use general equivalency mapping tools and crosswalk to the most appropriate ICD-9 code and adjudicate under that code. But a significant percentage of ICD-10 codes, maybe up to 20 percent, can’t be mapped to ICD-9 codes, he adds.

Consequently, MGMA worries that providers could see an increase in the level of pended or denied claims and then must go through an appeals process that would slow reimbursement.

The American Hospital Association had a pointed response to the approach being taken by the Medicaid agencies: “This approach is not ideal and should be short-term.”

Even payers who really believe they are ready are going to experience some hiccups when ICD-10 goes live, Kennedy says. “This is bigger than anything the industry has ever had before.”

In the final weeks before go-live, providers really need to take another look at their readiness and finalize back-up plans, advises Alester Spears, CEO of the Atlanta consultancy Healthcare EDI Partners. There were plenty of issues when the industry moved to the HIPAA 4010 transaction sets and then the 5010 sets, and remediation took longer than envisioned. Providers can’t expect ICD-10 to be any different and should expect more problems. All providers who don’t have a large nest egg, even those very confident that they are ready, need to obtain a line of credit because there will be disruptions either in-house and/or with insurers, he warns.

“Expect some payers will have problems and be prepared for disruption of reimbursement,” Spears adds. “Expect staff to be highly stressed and possibly getting a huge amount of rejections.” Providers also need to continue ICD-10 education after go-live as staff members may forget some of what they have learned. Spears’ bottom line: Be prepared for more disruption than you already expect.

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