Medicare, Medicaid Ready for ICD-10, Report Suggests

February 10, 2015

Will the rollout of the controversial ICD-10 diagnostic codes on October 1 be as botched as the debut of healthcare.gov under the Affordable Care Act, or will it proceed smoothly, by and large?

A study by the US Government Accountability Office (GAO) suggests that no disaster looms on the horizon. The Centers for Medicare & Medicaid Services (CMS) appears to be doing the necessary prep to successfully process and pay claims incorporating the new diagnostic codes and to teach physicians and hospitals how to use them, according to the GAO.

The Senate Finance Committee requested the GAO study. The committee's chairman, Sen. Orrin Hatch (R-UT), declared last week in a news release that, based on what the GAO found, CMS is "on track to upgrade to the next level of healthcare coding."

In a statement that may disappoint organized medicine, Hatch added, "I will continue to keep a close eye on the issue, but see no reason for any delay past the October deadline." The state medical societies of Texas and New York have lobbied Congress to push back the ICD-10 implementation date, already postponed twice, to October 2017.

ICD-10 is the acronym for the International Statistical Classification of Diseases and Related Health Problems, 10th Revision, created by the World Health Organization. It is replacing the current set of codes, called ICD-9, as required by the Health Insurance Portability and Accountability Act. The new set has 68,000 diagnostic codes, which is roughly five times the number in ICD-9, and they run to a maximum of seven characters compared with five for the older codes.

ICD-10 proponents, such as CMS, say the new codes are better able to accommodate new diagnoses and procedures in medicine. In addition, they allow physicians to indicate the location of a wound, tumor, or condition. Many medical societies, however, contend that ICD-10 will cost physicians tens of thousands of dollars in terms of training, implementation, software upgrades, and disrupted claims processing. And they do not expect patient care to improve, either.

At the urging of organized medicine, the Department of Health and Human Services delayed the go-live date for ICD-10 from October 1, 2013, to October 1, 2014, and then again to October 1, 2015.

Medical Societies Find CMS Code-Coaching Helpful

In its report released in late January, the GAO ticked off what CMS has done to get ready for the October 1 roll-out of ICD-10.

CMS, for example, says it has overhauled its claims processing system for fee-for-service Medicare to adjudicate and pay claims bearing the new codes. As part of this conversion, CMS last year tested whether its computer system could merely accept claims with ICD-10 codes as opposed to automatically rejecting them. It was able to do so 89% of the time in a March 2014 test run and 76% during a second round in November 2014. This year CMS is conducting "end-to-end" testing to see whether its computer system can process and correctly pay claims under the new diagnostic coding scheme.

CMS also has given technical assistance to state Medicaid programs on switching to ICD-10 and monitored their progress. The GAO study quotes CMS officials as saying that all state Medicaid programs have attested to their ability to process the new-styled claims. However, almost half of state Medicaid programs had yet to begin testing their revamped billing systems as of November 26 of last year, the study noted.

Another big part of the ICD-10 rollout for CMS has been provider education, which has taken the form of written materials, teleconferences, videos, webinars, and training modules that earn a physician CME credit. To assess the agency's performance in this area, the GAO polled 28 associations representing physicians, hospitals, insurers, and others involved in healthcare billing. This group included the American Medical Association, the American College of Cardiology, the American College of Physicians, the American Academy of Family Physicians, and the American Academy of Orthopaedic Surgeons, among other medical societies.

All 28 so-called stakeholder organizations called the government's educational programs helpful for preparing for ICD-10 but also pointed out some weaknesses. Some stakeholders said they were worried that CMS educational programs may not be reaching providers that need them the most, including physicians in solo or small practices and rural hospitals, to name a few. The CMS said it had this problem covered. Stakeholders also recommended more widespread end-to-end testing of Medicare claims with ICD-10 codes and more in-person training, which CMS said was in the works.

The GAO report on ICD-10 preparations is available on the office's website.

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