Rejection rates for claims increased during the early days of the transition to ICD-10 coding, but a major claims clearinghouse now says rejection rates are now in decline

There were spikes of rejections throughout October, but as the month ended, the payer rejection rate actually was lower than the year-to-date baseline measure, says Mike Denison, senior director of regulatory compliance programs at Emdeon. And clearinghouse rejection rates were only slightly above baseline.

At the end of October, 99.9 percent of claims that should be coded in ICD-10 came in with the new codes, and now in early November, both payer and clearinghouse rejection rates are at the baseline. Claims coded in ICD-9 for services before October are still coming in, but 86 percent of claims now being received at Emdeon are ICD-10.

Importantly, early remittance advice being sent by insurers back to providers shows little changes in reimbursement rates. However, the flood of remittance has not yet started but soon will as October claims work their way through the payment process in November.

Also See: Worrisome ICD-10 Fallout Seen in Smaller Hospitals

For commercial insurers, the average paid amount so far is slightly lower but less than 1 percent, compared with remittance under ICD-9, Denison says. The average paid amount for Blues plans is a little over 1 percent less. Medicare payments on average are 7 percent less, but that is due to October payment policy changes, the Centers for Medicare and Medicaid Services told Emdeon, so there is no change in reimbursement simply because of ICD-10.

Medicaid is a different and confusing story. The average paid amount is 12 percent higher but denied payments—for several reasons that include a claim not meeting contractual policy or a subscriber is not recognized, among others—are down 9.6 percent. Medicaid is often the payer with the highest denial rates, and Denison isn’t yet sure why that isn’t the case so far.

While cautioning that the industry should have a good indication of denial and payment rates by the end of November, Denison believes that in general, the transition to ICD-10 has been very successful. “The readiness of providers was better than expected.”

Further, he sees early indications that coder productivity is better than expected, ranging from less than a 10 percent change to no change at all.

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