On July 31, 2015, CMS released a FAQ document addressing claims denial policies associated with ICD-10 implementation. Most notably, CMS clarified that, for the 12-month period from October 1, 2015, to October 1, 2016, Medicare will not deny a claim if (1) that claim is under medical or quality review/post-payment review, and (2) the provider submits a valid code from the right coding family. CMS also addressed several circumstances in which providers will be at risk of denial based on ICD-10 coding issues.
Risks for a claim rejection and/or denial due to lack of specificity include:
- Claims applicable to policy guidelines, such as Local Coverage Determinations (LCD) or National Coverage Determinations (NCD). Published by Medicare and their administrative contractors, LCDs and NCDs are policies that provide requirements for the coverage of specific services and treatments. These policies currently require a level of specificity for diagnosis coding which will remain a requirement with ICD-10 code assignment. Claims with ICD-10 codes which are not accepted diagnoses, are subject to denial. The NCDs and LCDs are available to the public and can be found here.
- Invalid ICD-10 codes. All claims with dates of service of October 1, 2015, or later must be submitted with a valid ICD-10 code. If the submitted code is not a recognized and valid ICD-10 code, it will be rejected and will not enter the claims adjudication process. To resolve these rejections, the claims will need to be resubmitted with a valid code.
Denial Versus Rejection
The terms “rejection” and “denial” are often used interchangeably when referenced in conjunction with the revenue cycle. However, a rejection is different from a denial, and each requires a different approach for resolution.
- Claim rejection means that a claim: a) does not meet the basic format or data requirements to enter the adjudication system; b) is not considered as received; and c) will not be processed by the payer. These rejections are returned on an acknowledgement report instead of an electronic remittance advice (ERA) or explanation of benefits (EOB). Rejected claims must be corrected and resubmitted and do not have appeal rights. A complete list of valid ICD-10 codes for federal fiscal year 2016 is available on the CMS website at 2016 ICD-10-CM and GEMS.
- Claim denial is a claim that has been received by the payer’s adjudication system and for which a payment determination has been made (i.e., payment received, denied). Denials are identified by a remark code listed on the ERA or EOB, and must be either appealed or corrected and resubmitted, as applicable. According to the July 31 guidance, when a valid code is used, it will not be automatically denied as long as it is not subject to an LCD, NCD, or other medical policy guideline as noted above. If a claim is later selected for an audit, and the date of service is within 12 months after the ICD-10 implementation, the guidance is clear that the claim will not be denied simply because the wrong code was included, as long as: a) the code was in the same coding family (three-character category) for the reported condition; and, b) the code is valid.
Additional clarifications addressed in the FAQ document include:
- The ICD-10 Ombudsman, who can help triage physician and provider issues, will be in place by October 1, 2015.
- A valid ICD-10-CM code is composed of codes with three to seven characters, with the first three characters as the condition category which can be further subdivided by the use of fourth, fifth, sixth, and seventh characters to provide greater specificity.
- A “family of codes” is defined as the ICD-10 three-character category.
- All services paid under the Medicare Fee-for-Service Part B physician fee schedule are covered by the guidance.
- Commercial payers are not required to adopt CMS’ ICD-10 provisions. Therefore, practices should contact top commercial payers to determine if they will allow for any flexibilities pertaining to specificity.
With this new clarity, PYA recommends that providers press on with their ICD-10 coding implementation efforts. Continuing the momentum toward correct coding of claims to the highest specificity will help prevent medical necessity denials and claim rejections.
For more information about CMS’ latest guidance, or if you have other questions related to ICD-10 implementation, contact the experts listed below at PYA (800) 270-9629.
Additional information regarding the notifications released by CMS may be found below:
CMS and AMA Announce Efforts to Help Providers Get Ready for ICD-10 Frequently Asked Questions
