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ICD-10: Will All Payers Comply?

by Michael Palantoni, senior manager, product innovation

The ICD-10 transition (reminder: Oct 1, 2014) is revealing some of the more obscure nuances of the health care industry. While all providers and clearinghouses must comply with ICD-10 regulations as ‘covered entities’ under the Health Insurance Portability and Accountability Act (HIPAA), not all payers are required to. Worker’s compensation (WC), disability insurance, and auto insurance (MVA, as in “motor vehicle accident”) payers are not covered by HIPAA, and therefore not required by the federal government to use ICD-10 codes.

The Centers for Medicare and Medicaid Services (CMS) is encouraging these payers to transition to ICD-10 but with the potentially high costs associated with the changeover, some WC and MVA payers are likely not to take part. (See more on these payers on our ICD-10 Knowledge Hub.)

Getting paid as a provider will continue to increase in complexity

The difference in ICD-10 compliance requirements among payer types shows how critical it will be for providers to monitor and react to their payers’ ICD-10 readiness status. Providers that bill payers using diagnosis codes that are based on date of service alone will face operational disruption and impacts to collections. The scale of this impact varies significantly by practice. On average, our 40,000+ providers receive only a small fraction of reimbursement from WC and MVA payers (3% of total reimbursement between April and June of 2013), however, several athenahealth clients receive more than 50% of their reimbursement from these types of payers, making monitoring payer ICD-10 status a critical business function for these practices.

Additionally, this issue is not limited to WC and MVA payers. Rather, this situation serves as a microcosm of the broader challenges providers face. Specifically, other types of payers (i.e. typical health plans) may also be unprepared for the ICD-10 compliance deadline. A combination of planning, technical, and resource-related challenges could result in ICD-10 readiness glitches for payers of all types, requiring providers to be prepared to submit ICD-9 based claims after the compliance date. This is not unprecedented. The transition to the ANSI-5010 claim format saw varying degrees of readiness during the transition period across the industry.

This means that providers should be prepared to account for ICD-10 readiness status across all of their payers in order to maintain business continuity – and cash flow. For most practices, this necessitates another layer of business processes to monitor and validate payers’ ICD-10 status and reflect this information in claim submissions.

Managing the ICD-10 transition requires software, knowledge, and work

Keeping clinical and billing operations streamlined while accounting for payer ICD-10 status poses a significant challenge, especially for small practices where this incremental work is a proportionally greater burden that gets in the way of caring for patients. At athenahealth, we’re taking on this task for clients through a combination of cloud-based software, industry knowledge, and back-office services.

Our network knowledge teams will continually monitor payer (and clearinghouse) status before, during and after the October 2014 transition, so clients can focus instead on their practices. As we detect changes in payer status, we will build this ICD-10 readiness information into our proprietary rules engine; our cloud-based services will evaluate every claim submitted to ensure that it has the right diagnosis code set based on the destined payer’s ICD-10 status.

Preparing for these types of payers

What if your practice or organization doesn't have a cloud-based services partner? Here are a few recommendations to help you prepare:

  • Evaluate your existing reimbursement patterns to gauge your volume of MVA and WC claims, and assess the corresponding impact to coding and billing operations.
  • As part of this preparation, consider how solutions from system vendors and billing service providers (or internal teams) will account for all payers’ varying ICD-10 status.
  • Lastly, put in place the tools you need to monitor and address payer readiness issues during and after the ICD-10 transition.
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