ICD-10: Navigating Diagnoses, Billing & Compliance Standards

Healthcare providers nationwide dreaded the looming DSM-IV/ICD-9 to DSM-5/ICD-10 code switch for months. Now that the code change has occurred, providers are still left wondering things like, “What will happen if I use the wrong codes?” and “How is this transition affecting our revenue cycle?” Regardless of all the stress and anxiety caused by the switch, healthcare professionals and Electronic Health Record (EHR) vendors must face the challenges presented by ICD-10.

Many providers prepared for months, using various published crosswalks, educating staff and pre-loading codes in an effort to make the switchover seamless. Others chose to deal with the switch only after it was officially imposed. Providers on both ends of the spectrum alike are utilizing the new ICD-10 codes for submitting insurance reimbursement claims across the nation. In addition to using the new codes for insurance purposes, providers must adhere to new documentation rules for HIPAA compliance and reimbursement support. Many healthcare provider organizations will be audited by insurance companies in 2016. If clinical documentation does not support the new ICD-10 code set, payors will require previously granted reimbursements to be returned to insurance companies. This means if an auditor sees old DSM language such as “NOS” in a diagnosis, providers may lose revenue. This switch adversely impacts clinicians and billers because while some ICD codes have a one-to-one match with DSM codes, many have a variety of subset codes for one condition aligned in DSM-5. This presents some difficulty as clinicians try to ensure their documentation aligns with the claims that billers submit to payors. It is imperative that healthcare providers implement appropriate workflows within their organizations to support ICD-10 documentation and billing processes in order to prevent revenue disruption.

Organizational Preparation and ICD-10 Impact

About half of all behavioral health providers are billing third-party payors for clinical services. Clinicians, administrators, quality assurance and information technology (IT) personnel are all affected by the ICD-10 code change. Unfortunately for all these behavioral health professionals, ICD-10 code issues are not resolved with a simple EHR system update. It has been estimated that EHRs only take on 30 percent of the burden for the ICD-10 shift, while provider organizations bear the other 70 percent. Up until October first, many providers assumed their EHR vendors would automatically upload all their diagnoses code information into their systems. For most behavioral health providers, that has not been the case. So, many providers are anxiously scrambling to make sure documentation, billing and IT departments enter the necessary data for accurate service reimbursement.

Behavioral health providers prepared for ICD-10 by implementing strategies that included: organizational impact assessments, detailed timeline development, budget analysis, data loading, organizational meetings, systems testing and staff education. Providers also had to communicate with software vendors, billing clearinghouses and other third party vendors about their compliance plans. Health record, coding, clinical, finance and IT staff within every behavioral health organization had to coordinate both internally and externally to make a smooth transition.

While many feared the worst before the ICD-10 conversion, most have experienced a successful transition without major hiccups. Some billing clearinghouses saw spikes in rejections throughout October, but according to Mike Denison, Senior Director of Regulatory Compliance at Emdeon, the payor rejection rate was lower than the year-to-date baseline measure. In November, payor and rejection rates were just slightly above the baseline. About 86 percent of claims being received at Emdeon are ICD-10. The remaining 14 percent in ICD-9 are claims dated prior to October first.

Commercial insurers are paying health providers slightly less remittance than under ICD-9. However, the decrease in payment is currently less than one percent. Blue plan payments are just over 1 percent less. Medicare payments average about 7 percent less—due to payment policy changes that went into effect in October, not the ICD-10 switch. Medicaid is paying 12 percent higher on average, but denied payments are down about 10 percent. According to Mike Denison, Medicaid denials are usually the highest. The reason for the decrease in denials is not yet known. Overall, the ICD-10 transition seems to be going smoothly and providers were more prepared than billing clearinghouses expected.

Looking Ahead

Healthcare organizations nationwide dedicated abundant time, effort and money prior to the ICD-10 switch. Their efforts paved the way for a much smoother transition, limiting the amount of revenue disruptions, coding errors and service idleness. While it has only been a little over a month since the transition, it seems to be going much better than expected; and the billing claims rejection rate is relatively low compared to ICD-9. However, we still do not have a complete picture of how the transition will impact healthcare organizations over time. A better idea is expected in the coming months, but for now we can relax knowing that the initial switch has come and gone and it wasn’t so painful after all.

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Organizational Impacts from the ICD-10 Transition

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