Among the multitude of tasks to prepare for the ICD-10 code sets, providers also should conduct two core tests with insurers: Acknowledgement testing, also known as historical validation testing, and End-to-End testing.

Health Data Management recently talked with Ryan McDermitt, vice president of compliance management at transactions processing and management vendor Edifecs, to walk through the tests and other ICD-10 issues.

Under acknowledgement testing, a provider submits a claim to a payer, which is checked for appropriate HIPAA 5010 transaction standard edits, ICD-9 and ICD-10 edits, and transaction dates, with the goal of verifying that the payer can accept the claim. But this test does not tell a provider how an ICD-10 claim will adjudicate, so providers won’t know if the resulting reimbursement will be revenue neutral or different.

That is important because many payers may accept an ICD-10 claim, but their adjudication logic for member benefits, medical policies, referrals, preauthorizations and other functions may react differently in ICD-10 based on how a payer has redefined the functions in ICD-10 or cross-walked these functions. Another factor in payment will be how payer systems process DRG groupers in ICD-10, with some plans stepping down transactions from ICD-10 to ICD-9 for payment while the majority are implementing new ICD-10 versions of the groups that may introduce variability. So, McDermitt says, acknowledgement testing shows if a payer can accept ICD-10 claims, but little else.

End-to-end testing theoretically is where payers will learn how ICD-10 claims are being adjudicated and providers will learn the effect on reimbursement. That’s because the end result should be the production and transmission to the provider of electronic remittance advice. But some providers and vendors have told HDM that they completed end-to-end testing with payers yet did not get the ERA because the payer could not produce it for an ICD-10 claim submission.

End-to-end testing involves specific scenarios that include three parts, McDermitt says. They are clinical information on the patient, how information is converted into ICD-9 or ICD-10 codes, and the methodology adjudicated. Inpatient claims adjudicated on DRG methodology have significant impacts while outpatient claims adjudicated on fee-for-service methodologies are much less impacted.

Providers need to identify historical claims adjudicated in ICD-9 and create ICD-10 versions of the claims for adjudication. Providers and payers then need to compare the differences and see if they can agree on the differences so providers get a baseline on how claims will adjudicate under ICD-10. This testing will address such questions as: Are benefits coded appropriately? Did patient cost sharing change? Was the claim paid appropriately by the payer?

“Throughout adjudication, there are several points that ICD-10 could impact processing,” McDermitt explains. “Diagnosis and procedure codes may impact the application of member benefits, deductibles and out-of-pocket costs applied. Specific ICD-10 diagnosis codes may be included or excluded from benefit categories that carry different cost shares or levels of coverage. The payer’s interpretation of medical policies may result in new acceptance or rejection of services for certain clinical conditions or treatments associated with those conditions, and finally, pricing may be impacted where the price is derived from the diagnosis and procedure codes in DRG-based payments.”

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