Kusserow on Compliance: ICD-10 final countdown: even CMS not sure how its systems will work

Halloween may not be the only scary day in the month as it is now a matter of a few days until the health care sector changes over from ICD-9 to ICD-10. The entire health care section is on edge as to whether, after the transition, their systems will work properly. Failure to properly prepare for the transition will definitely result in negative impact on revenue streams. It is no wonder, therefore, that great concern exists on how this transition will work. In a recently released report, the Government Accountability Office (GAO) has warned that even CMS should be among those concerned, as unanticipated CMS system errors could disrupt claims processing. The transition will have a major impact on clinical management systems and functions, including: coverage and payment determinations, medical review policies, plan structures, statistical reporting, actuarial projections, fraud and abuse monitoring, and quality measurement.

GAO report

The GAO report on CMS preparedness for the transition found despite the fact CMS has engaged in extensive testing that supports transitions to ICD-10, concerns about how well the agency will function once the transition takes place on October 1, 2015, remain. The report concluded that although CMS has continually worked to update, test, and validate their systems and it has made detailed plans for contingencies, there is no guarantee against systems errors. How those errors may affect the ability to properly process claims cannot be determined until actual ICD-10 code processing begins.

The differences between ICD-9 and 10 are significant. While there are approximately 15,000 ICD-9 diagnosis codes, there are approximately 70,000 ICD-10 diagnosis codes. Likewise, there are approximately 4,000 ICD-9 procedure codes versus 72,000 ICD-10 procedural codes. The difference between the ninth and tenth versions of the codes is the terminology and disease classifications, which are to be updated so that they are consistent with new technology and current clinical practice. Other differences include the addition of new concept, such as expansion of postoperative codes to distinguish between intraoperative and post-procedure complications, and the designation of trimester for pregnancy codes.

GAO detailed CMS work to date, including processing systems updates as well as testing and validation of system changes and described the technical support that CMS will be offering. It noted that CMS began updating its systems in early 2010, as part of an established change management process for releasing system updates on a quarterly basis, and, by October 2013, had completed actions to modify its systems to process the new data. The costs are estimated to be approximately $116 million for developing, testing, and implementing the system changes. Beyond the estimated costs reported by CMS, little is known about the costs that providers, clearinghouses, and insurers incurred for updating their Medicare claims submission system. On October 1, 2015, CMS’s Office of Technology Solutions’ claims processing systems are expected to begin referencing the internal tables that store ICD-10 codes to validate, edit, and authorize payments to Medicare fee-for-service providers when claims data indicate a service date of October 1, 2015, or later.

Although the report cautions that unanticipated system errors could disrupt Medicare claims processing when systems are required to begin processing ICD-10 codes, the GAO notes that CMS has taken actions to determine and implement the necessary changes minimize potential disruptions.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.