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CMS clarifies ICD-10 grace period guidance

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In early July, the Centers for Medicare & Medicaid Services (CMS) announced that for a period of one year, it will allow for flexibility in claims payment, auditing and quality reporting processes as the medical community gains experience using the new ICD-10 code set.

CMS specifically clarified its statement that during the 12 months after ICD-10 implementation, contractors would not deny claims based solely on the specificity of the ICD-10 diagnosis code. However, according to the latest FAQ, claims will be rejected if they do not contain a valid ICD-10 code. CMS further defined a “valid code” as one that is coded to the maximum level of specificity. Claims will not, however, be rejected or audited simply because they contain the wrong code—as long as it is a valid code from the right family.

ICD-10 codes contain at least three characters, but sometimes as many as seven characters. The three character “coding family” may then be further subdivided, with more characters to provide additional specificity. If, for example, you submit a valid five-character code, you wouldn’t be audited simply because you selected the wrong fifth character.

So, what does the CMS flexibility really mean? While coding to the correct level of specificity is the goal for all claims, claims will be processed and will not be audited as long as the first three characters are from the correct “coding family.” This does not mean that you can submit claims that do not at least attempt to provide additional specificity, when required. If a submitted code is not recognized by the system as a valid ICD-10 code, it will be rejected. The physician can, in such an instance, resubmit the claims with a valid code.

The ICD-10 implementation date of October 1, 2015, has not changed.

To help physicians prepare for the transition, the California Medical Association (CMA) has updated itsICD-10 Transition Guide, which includes an ICD-10 transition preparation checklist. The guide also includes, among other things, information on how payors will handle prior authorizations around the transition date, listing and links to CMA’s live ICD-10 training courses, more information on CMS’s “grace period,” and a visual of the anatomy of ICD-10 code structure.

For the latest news and information on the ICD-10 transition, including the ICD-10 Transition Guide, seewww.cmanet.org/icd10.

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