From the Contributor’s Corner: Are You Preparing for Compliance With ICD-10?

All covered entities and business associates must transition from ICD-9 to ICD-10 by October 1, 2014 and use the new code sets in order to have claims paid.   The changeover is designed to allow for a more efficient claims submission process; strengthen quality and care management; decrease coding errors; and help to identify fraud and abuse.  All of these issues impact Compliance Officers, although the responsibility for putting the changes in effect do not fall directly on them.  Compliance Officers need to become familiar with these issues and ensure their organizations are taking all the necessary actions to be in compliance.

There will be a major impact on clinical management systems and functions, including: coverage determinations, payment determinations, medical review policies, plan structures, statistical reporting, actuarial projections, fraud and abuse monitoring, and quality measurement. The following are some of the compliance consequences to expect for failing to properly prepare for the transition:

  • Changeover to  impact revenue streams;
  • Failing to meet new level of detail in clinical documentation requirements;
  • Payers giving more attention to potential duplicate billings and/or payments;
  • Increased requests for medical records related to specific claims;
  • Significant impact on clinical management systems and functions, e.g. coverage determinations, payment determinations, medical review policies, plan structures, statistical reporting, actuarial projections, fraud and abuse monitoring, and quality measurement;
  • Rejection when not using Version 5010 standards;
  • Failure to pay ICD-9-CM code claims on or after October 1, 2014;
  • Significant documentation changes due to increased code detail;
  • Increased claims denials due to misinterpretation of new policies or rules;
  • Increased delays in payers’ claims processing;
  • Claims denial for failing to meet new policies on prior authorizations, referrals, and approvals, resulting in claim denials due to misinterpretation;
  • Unprepared payers, resulting in increased delays and claim denials;
  • Increased scrutiny related by payers and  their contractors;
  • Routine overpayment recovery actions for coding differences; and
  • More aggressive Government enforcement, including administrative sanctions and penalties.

What Should Be Done?

Compliance Officers should ensure their organizations are moving ahead now with a thoughtful transition plan, which can’t be done at the last moment.  The following are some questions that they can ask:

  1. Have all the risks associated with the changeover been identified?
  2. Are senior management, health information management/coding, billing/finance, compliance, revenue cycle management, and information systems and technology on board with planning?
  3. Has someone been selected to be responsible for making business, policy, and technical decisions?
  4. Does the project manager have defined roles/responsibilities that include having regular update meetings, performing impact analysis on processes and systems requiring changes?
  5. Have strategies, tasks and goals for the transition developed?
  6. Have all the affected policies governing coding been identified for review to update or rescind?
  7. Has there been an analysis of the costs and benefits associated with the transition?
  8. Has the impact of potential reduction in coding accuracy and production been evaluated?
  9. Has a clear implementation timeline been developed for all the steps in the transition?
  10. Does the practice leadership know of the scope of the transition and how it will affect them?
  11. Has a communication plan been developed to prepare affected parties for upcoming changes?
  12. Has work begun with vendors and third parties to identify potential implementation issues, both internally and externally, for the changeover?
  13. Has someone been given the responsibility for risk reduction and monitoring impact on cost?
  14. Are implementation plans between providers, payers, and vendors being communicated?
  15. Are all phases of project planning being documented with milestone benchmarks?
  16. Are there plans to develop training of affected parties to the transition?

Once all preparation for the changeover has been made, there are a number of other issues that should be addressed by the organization.  The Compliance Officer should question these processes as well:

  • Who is assigned the authority to resolve issues and train staff and external vendors to ensure that all coding is consistent with the new standards?
  • Has an audit plan been prepared to sample records for accuracy upon transition?
  • Is there a plan to audit claim submittals, both pre-payment and post-payment, to recognize and address incorrect coding?
  • Who is identifying and assessing resources for handling potential problems?
  • Who will monitor and perform internal audits areas targeted by Recovery Audit Contractors?

The government intends for the transition to have a positive effect on health care providers and entities with increased efficiency, as well as allowing payers, program integrity contractors, and oversight agencies to operate more effectively and efficiently.  It is also intended that there will be an improvement in detecting fraud and abuse.  All this will impact claims processing, auditing, fraud and abuse, pay-for-performance, payment methods, ACOs, and value measurements.  Compliance Officers have an obligation to see that their organizations are moving to implement these mandated changes.


  • Centers for Medicare & Medicaid Services.  “Administrative Simplification: Adoption of a Standard for a Unique Health Plan Identifier; Addition to the National Provider Identifier Requirements; and a Change to the Compliance Date for the International Classification of Diseases, 10th Edition (ICD-10-CM and ICD-10-PCS) Medical Data Code Sets.”  45 Fed. Reg. 162, 54664, 54664 (5 Sept., 2012).

Richard Kusserow previously served as the DHHS Inspector General for 11 years and currently is CEO of Strategic Management Services, a firm that has assisted over 2,000 organizations in the health care sector with compliance issues. His Compliance Resource Center provide policy template and tools for health care organizations.

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.