Coalition sees negative consequences in ICD-10 grace period

Recent efforts to establish a grace period around the ICD-10 transition will have "far-reaching, negative consequences," according to the Coalition for ICD-10.

While recent bills aim to reduce physician's financial risk, the colation said the assumptions that the coding of ICD-10 diagnoses directly impacts physician payments and that ICD-10 coding will be a burden because of additional detail are false.

The amount paid to physicians is not impacted by the assignment of ICD-10 diagnosis codes, according to the coalition. Plus, there was only a 2 percent denial rate during the most recent end-to-end testing.

The coalition cited the following negative consequences for the healthcare delivery system of these safe harbors:

1. Safe harbor undermines determination of coverage, medical necessity and quality of care

The ICD-10 diagnosis codes are used for coverage determination, medical necessity and some quality of care measures. Under the safe harbor provisions, physicians would be exempt from providing the data necessary for Medicare to determine if the services being delivered are covered under Medicare guidelines, meet medical necessity standards and are of high quality. Thus, a safe harbor has no impact on physician payment, but would severely restrict Medicare’s ability to determine coverage, medical necessity and quality of care.

1. Safe harbor ignores Medicare’s fiduciary responsibility to ensure proper payment

Submission of “unspecified or inaccurate” ICD-10 codes will prevent Medicare from accurately determining medical coverage and medical necessity. By allowing ICD-10 coding errors to go through the payment processing system unchecked, medical necessity and coverage would not be validated, leading to payments for medically unnecessary or uncovered services. For example, a diagnosis of unspecified disorder of prostate would not justify removal or destruction of the prostate. Under the proposed safe harbor, Medicare would be required to pay the claim for the removal of the prostate even though there was no diagnosis such as malignant neoplasm of the prostate that would justify the procedure.

1. Safe harbor raises serious fraud and abuse concerns

Allowing “mistakes” and “errors” to be reported without fear of audit raises serious fraud and abuse concerns. Even intentional errors would be included in the safe harbor provisions. If a broken finger was reported as a broken neck, Medicare would have no choice but to accept that the services delivered were covered and met medical necessity standards. Thus, even when there was a strong indication of potential fraud or the intent to purposefully bill incorrectly by deliberately reporting incorrect ICD-10 codes, a claim could not be denied. In fact, a physician could potentially report the same ICD-10 diagnosis code on claims for all of his patients, without regard to the patients’ actual medical conditions. This is analogous to allowing a tax form to be submitted with erroneous or conflicting information that does not support a refund and prohibiting the IRS from validating the information before issuing a refund check.

1. Safe harbor encourages incomplete documentation—a quality of care issue

Assigning the most accurate code based on the medical record documentation has long been an obligation for all providers – whether the coding system is ICD-9-CM, CPT, HCPCS level II, or ICD-10-CM. The vast majority of clinical detail in ICD-10 was included at the request of medical specialty groups because it was viewed as critical for understanding patient care and outcomes. Failure to document essential information in the medical record is in itself a quality of care issue.

1. Safe harbor would lead to widespread system disruptions

It is not clear whether the safe harbor would apply to just Medicare or to all payers. If the safe harbor applies only to Medicare, then other payers may or may not adopt a similar safe harbor. Basic system functions such as coordination of benefits between payers would be compromised due to an inconsistent reporting of diagnosis codes. Also, the safe harbor would actually increase the burden on physicians, as they would still have to be able to submit accurate codes to private payers. If the safe harbor applied to all providers, then payment systems that rely heavily on diagnosis codes such as DRGs could experience significant shifts in payment levels.

1. Safe harbor is just another delay by a different name

The original proposal to implement ICD-10 included a three-year period for physicians to get ready for the transition. The two delays in the implementation date have extended the time period for preparation to five years. And yet some still claim not to be ready. The safe harbor proposals essentially amount to yet another delay. As long as physicians aren’t expected to document and code as specifically as possible, many of them will continue to delay doing so. It can be predicted with virtual certainty that at the end of the safe harbor, there will be new demands for a reprieve from ICD-10 because there hasn’t been enough time to prepare.

There is substantial evidence that physicians can be prepared with a very modest amount of effort, and there are ample free or very low-cost resources available from many sources to assist physicians who want to be ready. The endless rumors about another delay or safe harbor provisions postpone physicians from making the effort to get ready.