ICD-10-CM No Turning Back

by Stefani Daniels, Managing Partner.
Published on Aug 15, 2015

Over 25 countries already adopted ICD-10 to classify diseases and related health problems because of the many benefits it provides in the provision of patient care and collection of data. ICD-10 will also improve quality of care and its documentation. ICD-10 is specific enough to identify diagnoses and procedures that were not possible in ICD-9. The addition of codes to ICD-10 allow for reporting of increased specificity such as laterality, manifestation and healing, as well as providing a mechanism for reporting new diseases and treatments.


A recent announcement from the CMS and the American Medical Association (AMA) was certainly a welcome surprise. For years, the AMA has led the charge against ICD-10. As recently as during its summer meeting in June, the AMA kept opposition as its gospel, calling the ICD-10 conversion a “looming disaster."  The announcement indicates that they finally called a truce and that AMA will cease its resistance to ICD-10 and begin helping physicians prepare for the transition. That’s a very important climate change. The announcement also confirms the transition date as Oct. 1 and removes doubt about additional delays or a potential dual-use period. 

There is still alot of physician education that's needed.  On a recent webinar, some attendees weren’t even aware that there were both CM and PCS codes under ICD-10.  Others questioned if CPT codes would still be used. This shows a gap in knowledge that directly affects physician payment.  Having AMA help with this education will mark a big step forward. 

The CMS/AMA announcement included some concessions made by the CMS. It released a regulatory guidance affording physicians more “flexibility” in using ICD-10 for processing Medicare claims and cutting physicians some slack on ICD-10 use when code discrepancies show up in audits and quality reporting. Those concessions include:

  • Not deny claims solely based on the specificity of diagnosis codes as long as they are in the appropriate family of codes, so physicians won’t be penalized because of a coding error;
  • Not audit Medicare claims in the first year of ICD-10 based on specificity of diagnosis codes if in the appropriate family of codes;
  • Authorize advance payments if Medicare contractors cannot process physician claims coded with ICD-10;
  • Not penalize physicians via reduced reimbursements for errors in selecting and calculating quality codes for the EHR meaningful use, PQRS and Value-based Modifier reporting programs as long as they use codes within the appropriate family of codes. Penalties also will not be applied if CMS has difficulty calculating quality scores during the ICD-10 transition; and
  • CMS will establish an ICD-10 Ombudsman office to help physicians resolve problems during the transition.

Medicare claims with a date of service on or after October 1, 2015, will be rejected if they do not contain a valid ICD-10 code. The Medicare claims processing systems do not have the capability to accept ICD-9 codes for dates of service after September 30, 2015 or accept claims that contain both ICD-9 and ICD-10 codes for any dates of service.  A valid ICD-10-CM code is composed of codes with 3, 4, 5, 6 or 7 characters. Codes with three characters are included in ICD-10-CM as the heading of a category of codes that may be further subdivided by the use of fourth, fifth, sixth or seventh characters to provide greater specificity. A three-character code is to be used only if it is not further subdivided. While diagnosis coding to the correct level of specificity is the goal for all claims, for 12 months after ICD-10 implementation, if a valid ICD-10 code from the right family is submitted, Medicare will process the claim. 

The one-year reprieve from such “granular coding” errors will give the physicians time to accustom themselves to the new system without being penalized.

For more clarifying information check CMS here