Implementation of the ICD-10 code set is just a few months away; the deadline is October 1, 2015. The AMA and other physician organizations have been campaigning for a grace period with regard to payment of claims that are not “perfectly coded” in ICD-10. Many physicians have been so concerned about adopting this code set they have been preparing for cash flow interruptions by obtaining lines of credit.

The AMA and CMS were able to work on a set of grace period rules that will ease the transition to ICD-10 and reduce the financial risk.

Per the AMA these new rules address:

  • Claim denials. For the first year ICD-10 is in place, Medicare claims will not be denied solely based on the specificity of the diagnosis codes as long as they are from the appropriate family of ICD-10 codes. This means that Medicare will not deny payment for these unintentional errors as practices become accustomed to ICD-10 coding. In addition, Medicare claims will not be audited based on the specificity of the diagnosis codes as long as they are from the appropriate family of codes. This transition period will give physicians and their practice teams time to get up to speed on the more complicated code set. Both Medicare Administrative Contractors and Recovery Audit Contractors will be required to follow this policy.
  • Quality-reporting penalties. Similar to claim denials, CMS will not subject physicians to penalties for the Physician Quality Reporting System, the value-based payment modifier or meaningful use based on the specificity of diagnosis codes as long as they use a code from the correct ICD-10 family of codes. In addition, penalties will not be applied if CMS experiences difficulties calculating quality scores for these programs as a result of ICD-10 implementation.
  • Payment disruptions. If Medicare contractors are unable to process claims as a result of problems with ICD-10, CMS will authorize advance payments to physicians.
  • Navigating transition problems. CMS has said it will establish a communication center to monitor issues and resolve them as quickly as possible. This will include an “ICD-10 ombudsman” devoted to triaging physician issues.

These provisions will go a long way in helping practices to avoid financial disruptions during this time of tumultuous change.

Don’t forget to prepare:

This yearlong transition period, does not replace the need for your practice to study and prepare for the ICD-10 switch. Please be sure that you and your billing team have taken an educational class and that you have a precise workflow plan ready for Oct 1st.