ICD-10 Update on Payers, Clearinghouses, and Reimbursements

“Business as usual” isn’t exactly what most providers expected to hear from The Centers for Medicare & Medicaid Services just a few short weeks after October 1. But, according to CMS, the transition to ICD-10 was just that: successful with nothing out of the ordinary. Of the estimated 4.6 million Medicare claims submitted every day, only 10.1% of those processed between October 1 and October 27 were denied. That’s just 0.1% more than the historical baseline number. But, even with numbers like these, has enough time passed for us to really gauge the transition’s success? Or are our assumptions a bit premature? Here’s the latest news:

Commercial

Emdeon, one of the largest claim clearinghouses, recently explained in an ICD-10 Watch article that “claims coded in ICD-9 for services before October are still coming in, but 86 percent of claims now being received at Emdeon are ICD-10.” So, even though the majority of claims contain ICD-10 codes, it might be too early to judge the situation with commercial payer reimbursements, because there are still ICD-9 claims lingering in many payers’ backlogs.

To add to the uncertainty, this Medscape Article reveals that some commercial payers took a page from Medicare’s “grace period” book and have been more lenient with denials based on code specificity alone. But how long will this leniency last? The article goes on to warn that “physicians and their billing staffs need to closely monitor the number and causes of denied claims going forward. Commercial insurers, after all, aren’t obliged to overlook specificity mistakes on matters like location and laterality as Medicare is doing.” So, there are no guarantees that payers will forgive specificity mistakes. And it may take weeks or even months to get a pulse on just how unforgiving these commercial payers truly are when it comes to denials.

Medicare

“Grace period” aside, Medicare payments are coming in at lower-than-average rates. That said, there’s no evidence that connects recent Medicare payment decreases with the transition to ICD-10. Health Data Management recently released an article that explains why: “Medicare payments on average are 7 percent less, but that is due to October payment policy changes.”

Even if these lower payments aren’t due to ICD-10, some providers might be experiencing other problems with Medicare and ICD-10. If that’s the case, CMS urges providers to:

Medicaid

If things seem to be going well for Medicare, the same must be true for Medicaid, right? Unfortunately, this is not a guarantee. Because Medicaid claims can take up to 30 days to be submitted and processed, we have very little information on whether these claims have been successfully submitted, denied, or paid. CMS has even announced they won’t have further news on Medicaid statistics until later this month, at the earliest. But, Mike Denison, senior director of regulatory compliance programs at Emdeon, says that that organization’s initial Medicaid claim data shows that the “average paid amount is 12 percent higher but denied payments—for several reasons that include a claim not meeting contractual policy or a subscriber is not recognized, among others—are down 9.6 percent.” Typically, Medicaid has the highest number of denials. So, why now are payment percentages up and denial percentages down? Maybe the grace period is making its mark in the Medicaid world. We won’t have a definitive answer until more time has passed and more claims have been submitted.

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Where does all of this information leave us? Analysis from RemitData found that “year-over-year data reveals that when you compare October 2014 claims processing figures to October 2015, only 24 percent of the anticipated claims volume has been processed for the month of October.” So, that means we still haven’t seen the full ICD-10 picture. However, I don’t think that means providers need to give up hope about seeing the fruits of their labor and preparedness; they just need to be patient. That’s because within the next 60 to 90 days, we might find that ICD-10 implementation is truly “business as usual.”