CMS Announces Grace Period for ICD-10 Mistakes

July 07, 2015

In a significant concession to organized medicine, the Medicare program yesterday announced a 1-year grace period for claims bearing the fastidious ICD-10 diagnostic codes that go into effect October 1.

Here's the grace: Claims won't be rejected for payment simply because the ICD-10 code submitted isn't specific enough.

The ICD-10 codes are more numerous, longer, and more exact than the ICD-9 code set they replace as mandated by federal law. For example, there are only two ICD-9 codes for chronic gout — 274.01 for the kind without tophus, and 274.02 when tophus is present. ICD-10 has dozens of codes for chronic gout. They extend to seven characters, with a category code of M1A for the basic condition followed by four more characters to indicate its etiology, location, laterality, and whether or not it is accompanied by tophus. With ICD-10, a physician might put the diagnosis as M1A.2421, or drug-induced chronic gout in the left hand with tophus.

The Centers for Medicare & Medicaid Services (CMS) and others say the new codes will modernize patient care and research and help prevent billing fraud. Medical societies such as the American Medical Association (AMA), however, have called ICD-10 just one more regulatory burden that will cost physicians tens of thousands of dollars to implement. Figured into that financial forecast are innocent coding mistakes that would cause Medicare to reject claims.

CMS has twice postponed the go-live date for ICD-10, originally set for October 1, 2013. It has rejected entreaties from organized medicine to do it one more time. But the agency did listen to fears expressed about innocent mistakes. In a joint announcement with the AMA, CMS yesterday said that claims would not be rejected solely on the basis of code specificity. They will pass muster as long as the code submitted is in the correct ICD-10 family. In other words, a physician billing for a patient with chronic gout will get paid if he or she at least gets the M1A part of the code right, never mind the cause, body location, or tophus.

Besides going easy on claims processing, CMS said it will not penalize physicians if they submit data that contain less than perfect ICD-10 codes to Medicare quality programs in 2015 such as the Physician Quality Reporting System. Again, as long as physicians use a code from the correct ICD-10 family, they need not fear a pay cut for a minor mistake.

CMS also said that if its claims-processing contractors are unable to process Medicare claims bearing the new codes because of problems on their end, physicians can ask for partial advance payments.

AMA President Steven Stack, MD, called these and other ICD-10 concessions "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," Dr Stack said in an article on the association's website.

More information about yesterday's announcement is available on the websites of CMS and the AMA.


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