- A recent letter from the American Medical Association (AMA) and 99 other physician groups to the Centers for Medicare & Medicaid Services (CMS) expressed collective concern that effective contingency plans require further completion to prevent critical financial disruptions in the possibly disastrous aftermath of October 1 conversion to ICD-10 diagnostic and procedural codes.
Robert M. Wah, MD, AMA President, spoke to RevCycleIntelligence.com today in direct response to this letter. Wah discusses the serious possibility of a dangerous accumulation of millions of dollars in unpaid Medicare claims when the ICD-10 transition goes into effect on October 1 and the adverse ripple effect it may have for physicians.
CMS’s ICD-10 end-to-end testing, says Wah, is severely flawed, because the size of the group surveyed was too small to be accurately counted as a valid industry-wide representation. Additionally, because the testing participants volunteered their efforts, Wah says it is likely the results reflect only those physician practices that are fully prepared.
Wah notes end-to-end testing results demonstrated a sharp decline in claims acceptance from the current 97 percent to only 81 percent. “When this is expanded to all physicians and all claims, the results may be disastrous,” Wah states.
Another of the AMA’s primary apprehensions is the ICD-10 transition’s influence on quality programs which run on dissimilar time tables. These programs include the Physician Quality Reporting System (PQRS) and Meaningful Use (MU).
“If the system is not prepared to handle quality reporting in both ICD-9 and ICD-10 for the year, physicians could face significant penalties by no fault of their own,” says Wah. “The AMA is urging CMS to ensure that measure calculations for PQRS and MU are not adversely impacted by the transition.”
Loosely established contingency plans might create a massive financial disruption for physicians and critical issues with Medicare beneficiaries’ access to care, states Wah.
“Physicians cannot afford to not get paid for nearly 20 percent of the claims they submit to Medicare. Delayed and denied Medicare claims must be tracked, reworked and reprocessed,” he states. “These administrative costs can be better put to use serving patients. More planning needs to be done to prevent the anticipated financial disruptions and administrative burdens of the ICD-10 switchover.”
During previous HIPAA implementations — such as NPI and Version 5010 — issues with Medicare processing meant many physicians went completely unpaid for several months by Medicare, says Wah.
“Some practices were at the point of being unable to make payroll for staff and needing to temporarily close the practice, or obtain lines of credit with financial institutions until processing was complete,” Wah states. “We are extremely concerned that physicians will face similar issues as a result of the switchover to ICD-10.”
Wah trusts that any claims processing, claim rejection, and cash flow interruptions can be resolved effectively if timeliness is executed.
“Physicians will need to closely track various metrics for their claims including pending claims, rejected claims, days in accounts receivable and payments,” says Wah. “Any issues will need to be addressed and reworked as early as possible to prevent a backlog of unprocessed claims and lack of reimbursement.”
AMA continues to actively advocate for end-to-end testing with Medicare returning the remittance to test that the function is working. Such actions enable physicians to best compare an expected payment with an actual payment.
Although AMA appreciates a stated indication to use advance payment, it enthusiastically urges CMS publicize and finalize the policy.
Wah says AMA has specifically asked CMS to mitigate the risk of Medicare and cash flow interruptions by yielding “advance payments” — reimbursement outside of the normal claims processing system for already rendered services, such as paper checks – to those physicians experiencing dire monetary hardship following the ICD-10 transition. AMA especially advocates an alleviation of risk if such issues originate solely on Medicare’s end.
Although Wah says physician reimbursement for outpatient services will likely not be affected by the code set change, since payment is made based on the service or performed instead of the diagnosis code, he expresses further concern that physicians may be unreasonably penalized as a higher volume of codes is introduced.
We are concerned,” says Wah, “that payers may use the conversion to ICD-10 to change their policies on the level of code specificity required on the claim. Since greater specificity of information is a touted benefit of ICD-10, payers may penalize physicians for using more general codes.”
Wah says the AMA continues to advocate CMS introduce a period of up to two years where a payer cannot limit or deny reimbursement based on a diagnostic coding’s specificity.
Wah urges physicians to prepare for the federal mandate compliance date of October 1 as AMA continues to seek to reduce ICD-10 implementation administrative burdens.
“As an industry,” says Wah, “we need to ensure that the transition to ICD-10 is smooth and there are adequate contingency plans in place to prevent large-scale interruptions in claims processing and reimbursement.”