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CMS Steps Up to Help Providers Avoid Costly Coding Errors

Lyman Sornberger
President and CEO, LGS Health Care and
Chief Health Care Strategy Officer, Capio Partners, Cleveland, OH 

For years, the American Medical Association (AMA) loudly raised concerns, to put it mildly, over the implementation of International Classification of Diseases, 10th Edition (ICD-10) codes. But as an October 1 deadline draws near for putting the codes in place, the group is dealing with the near-inevitable and is helping its members prepare for the massive overhaul.

In a statement in early July, the AMA said it was working with the Centers for Medicare and Medicaid Services (CMS) “to make sure physicians and other providers are ready ahead of the transition to ICD-10 that will happen on October 1.”1 That message came only weeks after the group, at its annual convention, requested CMS provide a two-year grace period where physicians would not be penalized for errors or malfunctions of the system.

“We appreciate that CMS is adopting policies to ease the transition to ICD-10 in response to physicians’ concerns that inadvertent coding errors or system glitches during the transition to ICD-10 may result in audits, claim denials and penalties under various Medicare reporting programs,”2 Dr. Steven J. Stack, the AMA president, said in a news release last month. “The actions CMS is initiating today can help to mitigate potential problems. We will continue to work with the administration in the weeks and months ahead to make sure the transition is as smooth as possible.”3

Dr. Robert Wergin, president of the American Academy of Family Physicians, said in an interview that the AMA recognized there would be no further delays with ICD-10 “and appropriately chose to move forward in the best interest of their members with resources to prepare them.”4

ICD is used to standardize codes for medical conditions and procedures. The previous codes, International Classification of Diseases, 9th Edition (ICD-9), went into effect 35 years ago. There now are about 14,000 ICD-9 codes, many of which have obsolete terms.

ICD-10 has close to 70,000 diagnostic codes, some of which seem rather unusual. According to the CMS website, using ICD-10 “should advance public health research and emergency response through detection of disease outbreaks and adverse drug events and support innovative payment models that drive quality of care.”5

Guidance From Everywhere

CMS has released additional guidance in response to provider concerns that allow flexibility in the claims auditing and reporting process over a one-year grace period while providers navigate the new codes. Medicare review contractors will not deny any claims billed under the Part B physician fee schedule based on the specificity of the ICD-10 diagnosis code, as long as the physician used a valid code from the right family.

Also, the grace period applies to codes submitted in connection with Meaningful Use programs and quality reporting programs such as the Physician Quality Reporting System.

A communication and collaboration center for monitoring ICD-10 implementation will be set up by CMS and will act to identify and initiate resolution of issues that arise as a result of the transition. There will also be an ICD-10 Ombudsman who will work with representatives in CMS’ regional offices. Guidelines regarding how to submit issues to the Ombudsman will be provided by CMS as the October 1 deadline approaches.

Another provision of the new CMS guidance states that when a Part B Medicare contractor can’t process claims within established time limits due to administrative problems, advance payment may be available. This is a conditional partial payment, which requires repayment.

Stack said in a July 6 AMA Viewpoint that “these provisions are a culmination of vigorous efforts to convince the agency of the need for a transition period to avoid financial disruptions during this time of tremendous change.” He urged physicians to “buckle down and make sure your practice is as prepared as possible ahead of October 1.”

An AMA cost study conducted by Nachimson Advisors in February 2014 estimated that costs to implement ICD-10 for a small practice started at $56,000 and went up to $226,000. These costs are associated with required software upgrades as well as training, practice assessments, testing, payment disruptions and lost productivity.

The good news is that both the AMA and CMS offer free educational resources for physicians. CMS has a website called “Road to 10”6 geared toward smaller practices and have released training videos with implementation tips. AMA Wire has a special series that gives monthly sample assignments to prepare for the ICD-10 transition. AMA Wire provides several other free resources, such as an ICD-10 project plan template, sample medical cases, a tip sheet series and an ICD-10 Tips and Resources newsletter from the American Academy of Professional Coders.

Wergin said one of the major burdens was training expenses, but “with these various options being added and on a nationwide scale, this can only prove to be a benefit to those that choose to participate.” 7 He urged physicians to take advantage of the many free offerings.

“CMS has made many efforts to ensure a seamless switch,”8 said Wergin. “Many private payers have stated for quite a while they are ready. It is up to the physicians and their professional organizations to continue to demand testing and proof for the private sector’s readiness, including clearinghouses.” 

1 http://www.roadto10.org/ama-cms-press-release/
2 https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-07-06.html
3 http://www.roadto10.org/ama-cms-press-release/
4 http://www.healthcaredive.com/news/ama-accepts-the-nearly-inevitable-prepares-for-icd-10/402035/
5 https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-07-06.html
6 http://www.roadto10.org/
7 http://www.healthcaredive.com/news/ama-accepts-the-nearly-inevitable-prepares-for-icd-10/402035/
8 http://www.healthcaredive.com/news/ama-accepts-the-nearly-inevitable-prepares-for-icd-10/402035/

Lyman Sornberger, President and CEO for LGS Health Care and Chief Health Care Strategy Officer for Capio Partners. Prior to his roles at LGS Healthcare and Capio Partners, Sornberger was the Executive Director of Revenue Cycle Management for Cleveland Clinic Health Systems (CCHS) from 2006 – 2012. This role comprised of the Revenue Cycle Management for all 11 Cleveland Clinic Health Systems Ohio and Florida Hospitals and 1,800 Foundation Physicians. His responsibilities included all CCHS Patient Access Services, Health Information Management and Billing. Prior to his affiliation with CCHS Mr. Sornberger was with the University of Pittsburgh Medical Center for 22 years as a leader in revenue cycle management. Sornberger is a graduate from the University of Pittsburgh with a BS and a Masters Degree in Business. He can be reached at 216-337-4472 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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