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Understanding the New ICD-10 Guidance from CMS and the AMA

Hourglass on computer keyboard
Hourglass on computer keyboard

On July 6, the Centers for Medicare and Medicaid Services (CMS) and the American Medical Association (AMA) announced a one-year plan to help providers ease into the transition to ICD-10 scheduled to take effect October 1, 2015.

Among the many provisions of that transition plan, the idea of a grace period has received the most attention. According to CMS, Medicare claims will not be denied based on incorrect ICD-10 diagnosis coding for a period of 12 months as long as the codes used are valid ICD-10 codes and come from the same family of codes as the one that actually should have been used.

While this guidance appears relatively straightforward, there are a few clarifications that need to be made, many of which were covered in a subsequent CMS document called, “Clarifying Questions and Answers Related to the July 6, 2015 CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities.”

First, this guidance applies only to Medicare claims.

While some commercial payers may follow CMS’s lead, many payers have announced already that they will not, including Aetna, Anthem, Humana, Kaiser Permanente and United Healthcare. Check with your own payer representatives to confirm how they will handle ICD-10. As well, Medicaid will not follow the grace period guidance either.

Second, simply choosing the 3-digit “family” code of a disease, condition, or symptom will typically not result in using valid ICD-10 codes.

Most codes include additional digits (from four to seven total) which provide specific information related to cause, laterality, episode, etc. Clinicians, coders, and billers should take appropriate steps to ensure all codes submitted on claims to Medicare and other payers come from this list of 2016 ICD-10-CM valid codes and code titles.

Third, the grace period does not apply to local or national coverage determinations (LCDs and NCDs).

Which means an incorrect ICD-10 code, even from the same family, will result in a denial if it contradicts guidance under those policies.

Fourth, the grace period applies only to post payment reviews.

If a claim is not denied for using an invalid ICD-10 code or for not conforming to an LCD or NCD, then it might be paid even with an incorrect ICD-10 code. However, on post payment reviews, if an auditor discovers that an incorrect code was used, the claim will then be denied and payment recouped unless the code used was from the same family of codes as the correct code. Also since this grace period applies only to post payment reviews, ICD-10 codes with the correct level of specificity will be required for prepayment reviews and prior authorization requests.

Fifth, quality reporting programs have a different kind of grace period.

CMS has indicated that for all quality reporting completed for program year 2015, Medicare clinical quality data review contractors will not subject physicians or other Eligible Professionals (EP) to the Physician Quality Reporting System (PQRS), Value Based Modifier (VBM), or Meaningful Use 2 (MU) penalty during primary source verification or auditing related to the additional specificity of the ICD-10 diagnosis code, as long as the physician/EP used a code from the correct family of codes. Note that the grace period for quality programs is only three months rather than twelve. Also, it’s not clear how CMS will enforce this grace period for quality measures that contain ICD-10 codes in the denominator.

For more information about the CMS/AMA transition plan, read the CIPROMS article about the basics and review the two Frequently Asked Questions documents released by CMS: CMS and AMA Announce Efforts to Help Providers Get Ready For ICD-10 Frequently Asked Questions  and Clarifying Questions and Answers Related to the July 6, 2015 CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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