Published 8/1/2015
Elizabeth Fassbender

CMS Relaxes ICD-10 Implementation Requirements

Changes are designed to ease transition for providers

With less than 2 months to go before orthopaedic surgeons and other healthcare providers will be required to use the International Classification of Diseases–10th Edition (ICD-10) coding set, the Centers for Medicare & Medicaid Services (CMS) yielded to provider demands and announced several changes aimed at easing the transition.

Although providers must begin using the ICD-10 coding system on Oct. 1, 2015—a requirement that the American Association of Orthopaedic Surgeons (AAOS) continues to oppose—CMS has backed away from its original statement that all claims filed after Oct. 1, 2015, must have correct coding and specificity for payment.

Instead, the first year will serve as a transition period where doctors will not be penalized with claims denials or quality-reporting penalties as long as they select a diagnosis code from the right family of ICD-10 codes. Under ICD-10, the number of diagnostic codes would increase from the 13,000 currently in place under ICD-9 to more than 68,000 codes.

CMS continues to maintain that the Medicare claims processing system will not have the capability to accept ICD-9 codes for dates of service after Sept. 30, 2015, nor will it be able to accept claims for both ICD-9 and ICD-10 codes.

The AAOS has long opposed the adoption of ICD-10 coding and has aggressively pursued policy changes to make the transition smoother if the new coding system is implemented. For example, the AAOS supported H.R. 2247, sponsored by Rep. Diane Black (R-Tenn.), which would have prevented rejection of claims and denial of payment based solely on subcoding specificity during a transition period. It appears that CMS has taken this step without the necessity of legislation.

“The potential for simple mistakes in classifying one of ICD-10’s thousands of subcodes could lead to delays in reimbursement and unfair penalties,” wrote AAOS President David D. Teuscher, MD, in a letter to Rep. Black. “This could be devastating to smaller provider offices with fewer resources. Physicians in the United States are already impacted by several administrative changes affecting the practice of medicine.”

In a statement issued after the CMS announcement, Rep. Black acknowledged the agency’s move. “I am pleased that CMS recognized the need to transition effectively during this period, which my legislation calls for. This transition period is a responsible solution that marks a win for our health care providers and the patients they care for.”

“These provisions are a culmination of vigorous efforts to convince the agency of the need for a transition period to avoid financial disruptions during this time of tremendous change. These provisions are a testament to the power of organized medicine and what we can achieve when we band together for the good of our patients and our profession,” said American Medical Association President Steven J. Stack, MD, in a release.

Despite the steps announced by CMS, the AAOS continues to believe that ICD-10 adoption would be costly to implement, detract from patient care while adding very little benefit to that care, and likely disrupt revenues in physician offices across America. The AAOS will continue to reach out to CMS to improve ICD-10 implementation and prevent claim rejections and payment denials that would result in a financial burden to orthopaedic practices.

Most recently, the AAOS endorsed legislation (Coding Flexibility in Healthcare Act of 2015) that would allow providers to code in either ICD-9 or ICD-10 for the first 6 months after the ICD-10 implementation deadline.

“We commend this legislation which would establish a transition period for physician group practices and other providers to submit healthcare claims to public or private payers using either ICD-9 or ICD-10 codes,” said Dr. Teuscher. “As the country’s healthcare system continues to undergo changes, it is imperative that a transition as significant as ICD-10 be conducted in a manner that ensures physicians are able to continue to provide quality care to their patients.”

Following are details of the CMS announcement:

Claim denials
For the first year ICD-10 is in place (Oct. 1, 2015–Sept. 30, 2016), Medicare claims will not be denied solely based on the specificity of the diagnosis codes, as long as the diagnosis code provided is 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 using ICD-10 coding.

In addition, Medicare claims will not be audited based on the specificity of the diagnosis codes as long as the diagnosis code is 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.

In a guidance document accompanying the announcement, CMS noted that claims could be chosen for review for reasons other than the specificity of the ICD-10 code, and those claims would continue to be reviewed for those reasons.

What this means to orthopaedic surgeons: ICD-10 diagnostic codes consist of up to seven alpha and numeric characters. For the first year of ICD-10 usage, CMS will not deny or audit claims that correctly list the first three characters. For example, the full ICD-10 coding for a displaced subtrochanteric fracture of the right femur, initial encounter for open fracture type I or II, would be S72.21XB. For the first year of the transition to ICD-10, CMS will not deny codes that correctly show the first three characters (S72), even if one or more of the remaining characters are incorrect. However, the claims could be reviewed for some other reason than code selection.

Quality-reporting penalties
Similarly, during the 2015 reporting year, CMS will not subject physicians to penalties for the Physician Quality Reporting System (PQRS), the value-based payment modifier (VBM), or meaningful use (MU) based on the specificity of diagnosis codes—as long as a code from the correct ICD-10 family of codes is used. In addition, penalties will not be applied if CMS experiences difficulties calculating quality scores for these programs as a result of ICD-10 implementation.

What this means for orthopaedic surgeons: For the 2015 quality reporting program year, participants in the PQRS, VBM, or MU programs who use an ICD-10 code from the correct family will not be subject to penalties by clinical quality data review contractors programs during primary source verification or auditing related to the additional specificity of the ICD-10 diagnosis code. Participants in quality programs will not be penalized if CMS cannot calculate quality scores due to the transition to ICD-10 codes.

If the provider’s only error in submitting measures relates to the specificity of ICD-10 codes, CMS will not deny any informal review request.

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.

What this means to orthopaedic surgeons: According to CMS, if Part B Medicare Contractors are unable to process claims within established time limits, the physician may apply for an advance payment. This would be a conditional partial payment and would have to be repaid. A request for an advance payment must be submitted to the Medicare Administrative Contractor (MAC). Instructions on accessing advance payments will be posted on the CMS and the MAC websites.

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. CMS promises to issue guidance about how to submit issues to the Ombudsman prior to the Oct. 1, 2015, compliance deadline.

“As we work to modernize our nation’s healthcare infrastructure, the coming implementation of ICD-10 will set the stage for better identification of illness and earlier warning signs of epidemics, such as Ebola or flu pandemics.” said Andy Slavitt, CMS acting administrator. “With easy-to-use tools, a new ICD-10 Ombudsman, and added flexibility in our claims audit and quality reporting process, CMS is committed to working with the physician community to work through this transition.”

Elizabeth Fassbender is the communications manager in the AAOS office of government relations. She can be reached at fassbender@aaos.org

Additional Information:

Infographic (PDF)