While last year’s ICD-10 transition went smoothly and with very few hiccups, healthcare organizations do not have the luxury of resting on their laurels. October 1 marks the one-year anniversary of the code switchover, which brings new challenges they must overcome.

Jim Daley, director of IT for BlueCross BlueShield of South Carolina and past chairman of the Workgroup for Electronic Data Interchange as well as WEDI’s ICD-10 co-chair, credits the success of organizations in meeting the Oct. 1, 2015, implementation deadline to the fact the industry had a lot of time to prepare.

One year later, Daley contends that organizations must now focus on three significant changes that will come into play starting Oct. 1, 2016:

  • The ICD-10 Coordination and Maintenance Committee has lifted the partial code freeze and thousands of new codes have been added for federal Fiscal Year 2017, which begins October 1.
  • The Medicare grace period on code specificity for Part B post payment audits will end Oct. 1, 2016.
  • Payers may begin to adjust medical policies based on the new specificity offered by ICD-10.

According to Daley, the coding update to be implemented on Oct. 1, 2016, will include a backlog of changes to the code set proposed by the ICD-10 Coordination and Maintenance Committee. He notes the large number of new codes are a result of the fact that a partial freeze on updates to the ICD-10-CM and ICD-10 PCS codes that existed prior to the Oct. 1, 2015, ICD-10 transition deadline has been lifted.

The Centers for Medicare and Medicaid Services reports that there are 71,486 diagnosis and 75,789 procedure codes for FY 2017. These include 1,974 additions, 311 deletions, and 425 revisions for ICD-10-CM, and 3,827 additions, 12 deletions, and 491 revisions for ICD-10 PCS, respectively.

“The impact of those new codes depends on what you do for a living,” says Daley, who argues that it’s important to determine the applicability of the new or revised codes specific to your practice or facility. “If you don’t happen to deal with the areas where the codes have changed, the impact will be obviously a lot less than if they’re right in the middle of your specialty.”

He recommends that organizations make sure that applicable codes are incorporated into internal applications and processes, while verifying that vendor products support the new codes. In addition, Daley warns not to rely solely on software vendors for testing.

“I would think that most of the major vendors are on top of this and are up to date, but you certainly don’t want to have new codes rejected because vendors forgot to incorporate them,” he says. “Also, you need to test in-house to make sure it will function in your environment not the very sterile test bed that the vendor might use.”

When it comes to the end of the Medicare grace period on code specificity for Part B post-payment audits, Daley points out that prior leniency in specificity of codes will be going away October 1, with the new mandate that goes into effect. That one-year “accommodation” period was the result of an agreement between CMS and the American Medical Association (AMA).

In the past, CMS reimbursed incorrectly coded claims under the Part B physician fee schedule—provided that the incorrect code was from the right ICD-10 code family—but no longer, according to Daley. “If you got close to the right general category of the codes, they wouldn’t penalize you in an audit,” he adds. “That’s ending.”

To be in compliance, Daley says organizations need to ensure that clinical documentation contains sufficient detail to code at the required level of specificity that CMS will soon demand.

In related news, CMS on August 18 released updates to its “Clarifying Questions and Answers Related to the July 6, 2015, CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities” in which the agency addressed the issue of code specificity.

“As of Oct. 1, 2016, providers will be required to code to accurately reflect the clinical documentation in as much specificity as possible, as per the required coding guidelines,” states the question-and-answer document. “Remember that many major insurers did not offer coding flexibility, so many providers are already using specific codes.”

At the same time, CMS states: “Beginning Oct. 1, 2016, all CMS review contractors are able to use coding specificity as the reason for an audit for a denial of a reviewed claim to the same extent that they did prior to Oct. 1, 2015. Review contractors will notify providers of coding issues they identify during review and of steps needed to correct those issues to the same extent that they did prior to Oct. 1, 2015.”

Based on the new specificity offered by ICD-10, Daley thinks that health payers may begin to adjust medical policies and that organizations should communicate with them to identify potential changes.

“That’s not to say that it will happen on October 1,” Daley concludes. “With time under their belts, the question is whether payers will be changing some of their medical policies? Now that they have new granularity around codes, it’s conceivable they might decide to cover some situations and not necessarily others. I’m not saying it’s going to happen overnight but it’s something to look for.”

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