ICD-10 Debuts Today, Whether Physicians Are Ready or Not

October 01, 2015

The 70,000 diagnostic codes known as ICD-10 made their long and nervously awaited debut in medical practices today.

Claims for any service performed on October 1 and beyond must bear one or more of the new diagnostic codes — more numerous and complex than their ICD-9 predecessors — to establish the medical necessity for what a physician did.

For several years, physicians have chuckled about the code for "bitten by a macaw, first encounter" (W61.11XA) and other seeming oddities in ICD-10, but today the laughter may be subsiding. Many physicians fear that coding errors on their part and claims-processing errors by third-party payers will translate into a Code Blue for cash flow. Simply put, practices may not be able to meet payroll and pay the rent if denied claims and payment delays dry up their revenue stream.

The Centers for Medicare and Medicaid Services (CMS) has a contingency plan for Medicare if the ICD-10 switch falls in a ditch. The plan, obtained by the news organization Politico through a Freedom of Information Act request, envisions one dark scenario in which the Medicare administrative contractors (MACs) that process claims mistakenly reject or deny a large number on account of ICD-10 issues. In that case, the agency would suspend claims processing while it tries to solve the problem. Claims held for more than 30 days may require Uncle Sam to pay physicians interest.

If CMS can't make the fixes immediately, it has the option of temporarily turning off ICD-10 "edits" in its claims processing software, essentially giving providers a free pass on the new codes. However, CMS would have to decide whether it should reprocess such claims once it turns the edits back on.

The contingency plan also considers the possibility that the billing systems of some medical practices will prove unable to submit electronic claims with the new code. It gives such practices several alternatives:

  • Download free, ICD-10 compliant billing software available on MAC websites.

  • Enter claims directly into the provider portals of those MACs that offer this capability (this is also possible with some private health insurers).

  • Submit paper claims to Medicare. Physicians first must apply for a waiver from the requirement to submit claims electronically.

More information about these options and other advice on how to operate in the ICD-10 world is available on the CMS website.

Physicians also can email questions to the agency’s ICD-10 ombudsman, William Rogers, MD, at ICD10_ombudsman@cms.hhs.gov.

Still Time to Get a Line of Credit

Most physicians whose billing systems can shoot an ICD-10 compliant claim to Medicare, Medicaid, or a private insurer won't know immediately whether it will be paid or not. Payments — or news of a denial — normally don't roll in until several weeks down the line.

That delay gives physicians enough time to do something ICD-10 counselors recommend — obtain a bank line of credit to meet 3 to 6 months' worth of practice expenses if ICD-10 issues interrupt cash flow. For a solo practitioner, that could easily be $200,000.

"The average community bank probably could set it up within two weeks," said Joey Root, president and chief executive officer of First Liberty Bank in Oklahoma City. "If you're already a customer, it will be relatively quick. Most physicians are good credit risks."

If a physician already has a bank line of credit, but it's not big enough to weather an ICD-10 emergency, he or she should seek an additional line of credit rather than expand the current one, Root told Medscape Medical News. Once the emergency is over, the second, larger line of credit can be dropped while the first remains intact.

The possibility of payment denials or delays isn't the only reason to talk to a banker. Practice management consultants warn that many physicians will need extra time initially to choose the correct ICD-10 code and ensure it's properly documented (is it otitis media in the right ear, left ear, or both ears?). As a result, physicians won't be able to see as many patients per day as they're accustomed to. While they get bearings, revenue will dip.

Will Private Payers Be as Lenient as Medicare?

The problem of interrupted cash flow is very much on the radar of CMS. That's why it announced in July that it will cut physicians slack on minor mistakes in ICD-10 coding for the first 12 months. It will not deny Medicare claims solely on the basis of code specificity as long as a physician chooses a valid code from the right family or category for the condition.

How lenient commercial insurers will be is another matter. Even though some major insurers have announced that they'll adopt the CMS policy on ICD-10 claims processing, suspicion and distrust still abound. "What I hear more than anything is that private insurance companies will look for any reason not to pay doctors," said Joey Root. "They can enhance their own cash flow by slowing down payments on claims."

Deborah Grider, a practice management consultant with KarenZupko and Associates who coaches physicians on ICD-10 coding, also worries about private insurers living up to their reputation of being T-Rex's that prey on physicians. But that's just one worry.

"I'm not sure a lot of physicians are ready," Grider told Medscape Medical News. "Some will be fine. Others will be apprehensive about what is the best code to pick.

"It's a little frightening. We have no idea of what's going to happen."

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