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ICD10 Likely to Bring Payment Challenges

With only a month until the implementation of ICD10, it’s an opportune time to consider the impact of the new scale on your revenue cycle. Granted, we’ve all put a lot of effort into training on the new system, but just because you choose the right code doesn’t mean that you are going to be paid. While the CPT® code drives the level of reimbursement in our current reimbursement system – $85 for a 99213, for example, the decision to pay often hinges on the diagnosis code. Physicians rarely encounter challenges with payment of evaluation and management (E/M) codes on the basis of the diagnosis, but once outside of the comfort of the 99xxx series, the diagnosis code makes all the difference in the world. And that’s what concerns me about ICD10.

Call it payment policies, coverage determinations or reimbursement guidelines, third-party payers create custom, proprietary algorithms to govern the claims adjudication process. The protocols incorporate many factors – place of service, national provider identifier (NPI) and so forth – but the decision to pay – or pre-authorize to perform – often hinges on the diagnosis code. Particularly for non-E/M services, one of the most common denials is “the diagnosis is inconsistent with the procedure” in which the payer conveys its decision that the service was not medically necessary. That determination results in a series of actions that a medical practice must take to get the claim paid.

The impending conversion to ICD10 won’t change the reimbursement process itself, but the quadrupling of the codes that provide an essential component of the algorithms used in adjudicating claims and authorizing services will certainly impact it. The potential to have a claim denied, in other words, rises exponentially after October 1, 2015. Unless the payer migrates its algorithms to mirror that which are used in ICD9, there will be an inevitable rise in denials. Even a single one of the 68,000-plus ICD10 codes that doesn’t map to the existing protocols will trigger payment issues for your practice.

While it’s difficult to know exactly what to expect this fall, it’s an opportune time to ensure that your denial management procedures are in order:

  1. Recognize how to identify denials at the line-item level; examine electronic and paper-based remittances with scrutiny.
  2. Understand denial reporting options available from your practice management system; business intelligence about denials will be more important than ever post October 1.
  3. Garner resources to address denials expeditiously; while most have plenty of employee time lined up to code services correctly, these efforts won’t do the practice any good unless you get paid for them.
  4. Consider scheduling employees to work evenings and weekends starting mid-October; resubmitting claims during normal business hours may be a challenge if payers’ Websites are overwhelmed with traffic.

No one knows exactly what’s going to happen on October 1, as denials and authorizations are a function of administrative decisions at the payer level. Don’t let those denials translate into write-offs; prepare today for what could be a rocky reimbursement road ahead.


Woodcock & Associates: Changing the Way You Work