ICD-10: Countdown to a Meltdown, or a Yawn?

September 24, 2015

Government rollouts in healthcare haven't enjoyed a good reputation lately.

The website for the Affordable Care Act (ACA), called healthcare.gov, went live in October 2013 and then went glitchy. Only after major repairs could Americans sign up for insurance coverage without pulling out their hair. The year before, the switch to the Version 5010 standard for electronic insurance claims delayed payments to some physician practices, which in turn struggled to meet payroll.

These memories darken expectations of the ICD-10 diagnosis codes that debut on October 1 after being damned, denied, and delayed the past several years, according to students of physician reimbursement interviewed by Medscape Medical News. To some, the ICD-10 jitters recall the Y2K scare, when people stockpiled bottled water in fear of civilization-wrecking computer crashes on January 1, 2000. With ICD-10, the favored survival tactic for physicians is obtaining a bank line of credit for 3 to 6 months, if not longer, to cope with interrupted cash flow.

"There's a lot of anxiety about how claims will go through," said Robert Wergin, MD, president of the American Academy of Family Physicians, in an interview with Medscape Medical News. "The experience with healthcare.gov makes you a little nervous."

Then again, the worst-case prophecies for Y2K never materialized, and the same could be true for ICD-10.

"It could be like Y2K," said Deborah Grider, a practice management consultant with KarenZupko and Associates. "Until we go live, we won't know what will happen."

Numerous wild cards in healthcare will keep everyone guessing until then. Several surveys conducted this summer reported an alarmingly high rate of ICD-10 unpreparedness among physician practices, but it's not clear how much they've caught up since then. Physicians who are ready to submit claims with the new codes wonder how third-party payers will process them. The Centers for Medicare and Medicaid Services (CMS) said in July that it would cut physicians some slack if their ICD-10 codes contain minor mistakes. How many private insurers and state Medicaid programs will follow suit is unknown.

For that matter, the Medicaid programs in Maryland, Louisiana, Montana, and California didn't retool their software programs in time for ICD-10. On October 1, they'll convert or "map" ICD-10 codes to ICD-9 equivalents and pay claims on that basis. This solution strikes some experts as error prone, and just one more way physician claims can get fouled up.

"The largest state in the country isn't ready," said Robert Tennant, director of health information technology policy at the Medical Group Management Association (MGMA). "That fills me with trepidation."

Adding to the suspense is the fact that claims submitted with the new diagnosis codes won't get paid — if they get paid at all — until 3 or 4 weeks later, owing to normal billing cycles, said Sherri Dumford, a project director with theHealthcare Administrative Technology Association, which represents practice management software vendors.

"Then you'll know," Dumford told Medscape Medical News. "Physicians will say to themselves, 'Hey, I used to get paid for this, now I'm not.' "

New Codes Especially Vex Older Physicians

ICD-10 stands for the International Statistical Classification of Diseases and Related Health Problems, 10th Revision, created by the World Health Organization. It replaces the current set of code — ICD-9 — under orders of the Health Insurance Portability and Accountability Act. At the urging of organized medicine, the Department of Health and Human Services delayed the go-live date from October 1, 2013, to October 1, 2014, and again to October 1, 2015. Claims for all services rendered on that day and beyond must bear the new codes.

ICD-10 has 68,000 diagnosis codes, 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 codes are longer and more numerous because they convey more information, such as the location of conditions and injuries, their laterality, clinical manifestations, and the source of injuries. Supporting documentation must be just as detailed, adding to a physician's work.

CMS and other ICD proponents say the new, more precise codes better accommodate new diagnoses and procedures and serve the needs of population-based medicine. Critics, which include major medical societies, counter that ICD-10 represents one more regulatory nuisance, costing physicians time and money without benefiting patients very much. And the United States, they complain, is the only country that incorporates these codes in healthcare billing and that they make getting paid harder.

"ICD-10 is just another nail for the coffin of solo practitioners like myself," one physician reader of Medscape Medical News said in response to a recent article on the subject. "The socialization of medicine is alive and well!"

Opponents mock some of the seemingly arcane codes for injuries such as "sucked into jet engine, initial encounter" (V97.33XA) and "bitten by macaw, initial encounter" (W61.11XA) vs "bitten by parrot, initial encounter" (W61.01XA). Supporters reply that these codes aren't arcane in some settings — the US military encounters jet-engine injuries, for example — and that ICD-9 had its own oddities, such as "suicide and self-inflicted injury by paintball gun" (E955.7).

In her work helping practices switch to ICD-10, consultant Deborah Grider has encountered physicians who are excited about the changeover. "They're saying, 'We can identify the patient's condition in more detail and reduce the number of denied claims,' " Grider told Medscape Medical News. On the other extreme are physicians who threaten to retire as October 1 looms, she said. "The older the doctor, the more resistant they seem."

At least one practice has carried through on the threat, according to Texas Medicine, a magazine published by the Texas Medical Association. Austin Internal Medicine Associates closed its doors on September 4 in the face of increasing administration burdens, one of which was ICD-10, the magazine reported.

"Of all the hassle factors, it's down the list a ways," R. Scott Ream, MD, told Texas Medicine, "but it's definitely why we chose [September 4]."

All four of the group's members — three of whom are near age 70 years — are retiring.

Putting Off Software Upgrades

Physicians have lagged behind the rest of the healthcare industry in preparing for ICD-10, by all accounts. In a survey conducted in June and early July by the Workgroup for Electronic Data Interchange (WEDI), only about 1 in 2 medical practices said they were ready or would be ready for the big day. WEDI is a nonprofit authority on sharing digitized healthcare information. In contrast, 90% of hospitals and health systems said they would be submitting insurance claims with ICD-10 codes next week, and 100% of health plans said they'd be ready to process them.

Similarly, CMS says all its claims processing systems are go. And most of the clearinghouses that route claims from physicians to third-party payers are in good ICD-10 shape, according to Deborah Grider.

An instructive survey of Texas physicians conducted in July by the TMA was just as discouraging as what WEDI found. Forty-two percent said they were not at all confident that their practice was prepared to make the ICD-10 switch. Only 10% said they were very confident, with the rest calling themselves "a little confident" or "somewhat confident." Lack of confidence runs highest among soloists, underlining Robert Tennant's observation that "the smaller the practice, the greater the challenge."

The TMA survey drilled down to how exactly physicians prepared, or didn't. Only 46% had taken ICD-10 training courses. And only about 25% had tested the ability of their practice software to transmit claims with ICD-10 codes to clearinghouses and payers.

Physician software, by and large, should be able to talk ICD-10. The TMA reported that 74% of Texas physicians use an electronic health record (EHR) system, and of these, 65% said their program is capable of handling the new codes. Of those physicians who can't plug an ICD-10 code into their EHR, 29% are expecting to update to an ICD-10–capable version.

Nationwide, the vast majority of vendors of EHR and practice management systems have upgraded their programs for ICD-10, said consultant Deborah Grider. As the TMA survey seems to indicate, however, many physicians have been slow to implement an ICD-10 compliant version of their existing system.

"One thing's clear," said the MGMA's Robert Tennant. "A number of practices have waited to have their software updated."

Such an update is easy when the software is cloud-based; the vendor makes all the changes on the back end. It's more complicated when the software resides on a server in the physician's office. "We've heard some disconcerting anecdotes that some large vendors haven't gotten around to all their clients [for an update]," said Tennant. At the same time, some practices have hesitated to upgrade because of the expense.

Then again, two postponements of the ICD-10 deadline and hopes of a third may have lulled physicians and software companies alike into complacency about meeting the October 1 deadline. "With every delay, everyone stops, even vendors," said Grider. Both she and Tennant agree that pressure to keep up with changing standards for the government's EHR incentive program has made it harder to bear down on ICD-10 at the same time.

Will Private Insurers Be as Lenient as CMS?

In anticipation that many physician practices won't be up to speed on ICD-10 by October 1, CMS initially will process Part B Medicare claims with a light touch. This summer it announced that for the first 12 months, it would not deny claims solely on the basis of code specificity as long as the physician chose a valid code from the right family or category for the condition.

For example, there are 70 ICD-10 codes for various forms of Hodgkin's lymphoma, all of which begin with "C81." As long as a physician chooses one of the 70 codes and gets "C81" right, CMS will not deny payment — or impose penalties in its various incentive programs — simply because some of the characters after the first three are incorrect. Consider a diagnosis of nodular sclerosis classical Hodgkin's lymphoma. A physician may code the cancer as found in intra-abdominal lymph nodes (C81.13) or intrathoracic lymph nodes (C81.12) when in fact it's in the lymph nodes of the inguinal region and lower limbs (C81.15). Flubbing the last digit shouldn't doom the claim, however.

"This allowance was made so that small practices with an inexperienced office manager or coder wouldn't see their entire income stream dry up," said William Rogers, MD, CMS' new ombudsman for ICD-10, in an interview with Medscape Medical News.

At the same time, CMS will not accept a claim with simply "C81" for Hodgkin's lymphoma, or the root characters of any other code family, if there are further subdivisions. Such a truncation is not a valid code, which means an actual code in the ICD-10 system. Putting down C81.1A for Hodgkin's lymphoma invites rejection because that code doesn't exist.

The fed's leniency policy doesn't automatically apply to private insurers, said Dr Rogers. "We have no authority over them." Nevertheless, a number of insurers, such as Aetna, Humana, and Anthem, have announced on their websites that they'll follow the lead of CMS. In contrast, UnitedHealthcare says on its website that it is "assessing the potential impacts" of the CMS guidance. When asked if the company had reached a decision, a spokesman told Medscape Medical News that he had "nothing to add" to the story.

The MGMA's Robert Tennant said that his association will be closely watching private insurers after October 1 to see if they are as lenient as CMS about ICD-10 coding. "I highly doubt if all of them will have a relaxed set of edits," he said.

Add state Medicaid programs to the watch list. They're also not obligated to follow the lead of CMS and give physicians a 1-year grace period of coding flexibility. The policies vary from state to state.

"Inconsistencies Add to the Confusion"

Physicians don't want to deal with a patchwork of standards for processing claims with ICD-10 codes, but deal with it they must. That's especially true for physicians in the four states — California, Maryland, Montana, and Louisiana — that received permission from the federal government to accept fee-for-service Medicaid claims with ICD-10 codes, map them to ICD-9 codes, and pay the claims accordingly. Like others, coding expert Betsy Nicoletti, in Springfield, Vermont, believes that the conversion process will be inexact, given the huge numerical imbalance between the old and new codes. And that could lead to delayed or denied claims.

"If I were a physician with a high Medicaid population in California, I'd be nervous," said Nicoletti, author of The Field Guide to Physician Coding, in an interview with Medscape Medical News.

State worker compensation programs add to the patchwork. They're not required to use ICD-10 codes in the first place. Some states have gone ahead and voluntarily mandated the conversion, and some haven't, according to consultant Deborah Grider. Physicians with EHRs, she said, can easily choose ICD-9 or ICD-10 mode, depending on what payer is processing the claim. Still, having to switch back and forth strikes some observers as a hassle.

"The inconsistencies add to the confusion," said Vinita Ollapally, regulatory affairs manager for the American College of Surgeons.

Despite all the possibilities for chaos to ensue, some observers are relatively sanguine about flipping the switch on October 1.

"If providers can get a claim to a payer that has an ICD-10 code that looks reasonable and a good CPT [billing] code, they'll be paid like they've always been paid," said Jim Daley, co-chair of WEDI's ICD-10 work group and director of information technology at Blue Cross and Blue Shield of South Carolina. The fear factor, Daley told Medscape Medical News, is overblown.

"If your electric lights go out on October 1, somebody will blame it on ICD-10," he said.

The MGMA's Robert Tennant, for one, isn't predicting a meltdown.

"We'll muddle through," he said, "but at the end of the day, people will still ask the question, 'Where is the value of making this change?' "


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