It has been six months now since ICD-10 became a reality. How has the industry managed this significant transition? What trends are we seeing? We did not see any of the anticipated chaos, system failures, or significant numbers of denials or losses of revenue, which is fantastic news. Providers that prepared well had a fairly smooth transition. Physicians who did not prepare well did suffer a bit more confusion in coding, system challenges, etc., but not to the extent we feared.
Most hospitals’ physician groups prepared with education and clinical documentation improvement training provided to their physicians, coding staff, and other department employees, all of which ensured the establishment of a good foundation for documentation and coding. System upgrades included a few glitches, but with IT support, providers were able to fix problems as they occurred.
However, the ICD-10 transition is not over yet. We have recently seen more denials related to the routine use of unspecified codes and lack of specificity overall, but it has not been significant. I feel that we are now in the ‘honeymoon stage.” Keep in mind that many payers, including the Centers for Medicare & Medicaid Services (CMS), extended a grace period until Oct. 1, 2016 to allow time for providers to continue acclimating to ICD-10. But what happens after Oct. 1, 2016? Will the payers start denying for lack of coding specificity? Will there be an onslaught of requests for providers to validate coding with documentation?
One other key issue is that medical necessity is imperative in reporting all procedures and services. Many physicians have indicated that they don’t get paid based on the diagnosis code, ”so what’s the big deal?” Actually, physicians are paid based on three critical factors:
- Procedure code(s)
- Diagnosis code(s) supporting medical necessity.
Without a specific diagnosis code and validation of medical necessity, a claim is not considered valid. Another common assertion is “I got paid, so the coding must be correct.” This is not always the case. Many times payers reimburse providers, only to recover the payment later if documentation and medical necessity are not supported.
Providers need to begin to monitor denials by type and take immediate action to remedy them. Denials should take priority and should never be ignored. One of the problems I have seen in medical practices is that, in many cases, billing staffs are not trained properly in how to recognize why a claim was denied. Billing staffers should be trained on the fundamentals of ICD-10 to ensure that they have a good understanding of the importance of specificity and what to look for when a claim is denied.
Another important task is to routinely review carrier medical policies. This will ensure that the procedure or service provided is supported in the medical record, based on payer policy. Payer policies typically include clinical indicators that support medical necessity for each procedure, including documentation requirements.
Providers should also conduct an in-depth assessment of their coding and documentation, and make necessary changes immediately if they are deficient. One of the largest challenges currently facing the industry we have seen is lack of documentation to support a more specific code. Even though the physician determines whether each service is medically necessary, it is not always well-documented. For example, if a patient has breast cancer, documentation must support laterality and location of the malignant neoplasm (the part of the breast affected). Performing a coding and documentation review (audit) will identify weaknesses in not only the coding, but the documentation as well. Additional education and training is always beneficial to strengthen coding and documentation, which will ultimately improve reimbursement.
Last month I talked about key performance indicators, which are vitally important to track over the next 12 months. These are the types of indicators that are critical in monitoring coding and reimbursement:
- Code frequency
- Coder productivity
- Volume of coder and/or provider questions
- Use of unspecified codes
- Physician or non-physician practitioner productivity
- Clinical documentation versus ICD-10-CM code selection
- Increase or decrease in number of queries
- Days from claim submission to payment
- Claims denial rate
- Types of ICD-10 denials (invalid code, medical necessity, etc.)
- Claim denial reason codes
- Payment amounts by payer
- Clearinghouse edits
- Payer edits
- System issues
I have talked to a great deal of hospitals and medical practices about tracking performance indicators, but many are just now thinking about doing this. This is a critical part of the post-implementation process.
How will you know what type of denials you have? How will you be able to determine if clinical documentation is sufficient for the coding of each claim? What about productivity and accuracy? If you have not started this process, begin now. If you are unsure how to begin or don’t have the resources to do this internally, hire a consultant to assist your organization.
Track and monitor to analyze the causes for negative findings. This will also help identify opportunities for clinical documentation improvement. Run frequency reports on a monthly basis to keep track of unspecified code usage. Tracking claim denials by type can ensure that you can take corrective actions sooner rather than later.
So, what potential challenges do we see ahead in the next 6-12 months? Watch for more payer audits, as payer requests for documentation to support medical necessity for procedures and services may increase. Payers will be looking at practitioners that bill a significant number of unspecified codes when a specified code is more appropriate. Payers may begin performing more pre-payment audits to ensure coding accuracy.
There is also the potential for more denials and delayed claims as the grace period ends. With the significant changes in ICD-10-CM, with 1,941 new codes, 422 revised codes, and 305 deleted codes, additional education and training will be necessary to ensure accurate reimbursement in 2017.
Now is the time to measure the success of your ICD-10 Implementation project and prepare for future challenges in the ICD-10 world.
About the Author
Deborah Grider has 32 years of industry experience and is a recognized national speaker, consultant, and American Medical Association (AMA) author who has been working with ICD-10 since 1990. She is the author of Preparing for ICD-10: Making the Transition Manageable, Principles of ICD-10, and the ICD-10 Workbook, among many other publications for the AMA. She is considered an ICD-10 implementation expert, assisting hospital systems and physician practices in their efforts to get ready for ICD-10 since 2009. She is a healthcare consultant with Karen Zupko & Associates.
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