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Clarifying on ICD-10 flexibilities

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The Centers for Medicare & Medicaid Services (CMS) announced in July it plans to reimburse wrongly coded Medicare Part B ICD-10 claims for one year. Your practice will be reimbursed if the codes are valid and within the correct family. Below are the CMS definitions of a valid code, and what it means to be within the same code family, along with a recent CMS document that explains an earlier CMS announcement.

What is a valid code?

ICD-10-CM is composed of codes containing 3, 4, 5, 6 or 7 characters. ICD-10-CM codes with three characters are used as the heading of a category of codes, and may be further subdivided by using 4, 5, 6, or 7 characters to provide greater specificity.

An example code is C81 (Hodgkin’s lymphoma) – which by itself is not a valid code. Examples of valid codes within category C81 contain 5 characters, such as: C81.00 Nodular lymphocyte predominant Hodgkin lymphoma, unspecified site C81.03 Nodular lymphocyte predominant Hodgkin lymphoma, intra-abdominal lymph nodes.

What is meant by family code?

A family of codes is the same as the ICD-10 three-character category. Codes within a category are clinically related and provide differences by capturing specific information on the type of condition.

An example includes K50, (Crohn’s disease) which has codes within the category that require varying numbers of characters to be valid. Examples of valid codes within category K50 include: K50.00 Crohn’s disease of small intestine without complications K50.012 Crohn’s disease of small intestine with intestinal obstruction and K50.90 Crohn’s disease, unspecified, without complications.

CMS document

CMS recently released a document clarifying an earlier announcement: Clarifying Questions and Answers Related to the July 6, 2015 CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities. According to Dr. J. Thomas Ward1, below are the top three takeaways from the new CMS document:

1. Claims may be rejected for lack of specificity and at a minimum, laterality may be required.

Claims may be rejected for lack of specificity if the national coverage determination (NCD) or local coverage determination (LCD) requires specificity (See Q&A #4 and #7). The flexibility in accepting ICD-10 codes is somewhat altered than what was originally presented by CMS. It seems that at a minimum, laterality is required for those diagnoses where it could be described.

A general rule of thumb is to know what the carrier will look at and to not code ICD-10 unspecified, is to determine the highest level of specificity during the patient assessment. The carrier expects the highest level of specificity. An example is otitis media (H66), which is a very commonly abused ICD-9 unspecified code. The exam should determine whether the otitis media is acute or chronic and nonsuppurative or suppurative, along with additional details. You have all the information to get to the highest level of specificity, so payment is not delayed.

2. The flexibility in accepting ICD-10 codes currently only applies to Medicare Part B.

The described flexibility in accepting ICD-10 codes applies only to Medicare, but not Medicaid. And, as of now, it only applies to Medicare Part B. There is still no comment regarding Part A claims. Additionally, CMS mentions that commercial payers can do as they wish with audit flexibilities.

3. There is no guarantee that your code will be accepted, even if it is in the right ICD-10 family.

It seems that CMS has modified its stance on accepting any code in the right ICD-10 family (See Q&A #6 and #7). Their stance on the issue still falls somewhat within the grey area, but statements from 6 and 7 make me believe that the NCD and LCD may actually reject a claim if the required level of specificity is not consistent with those policies. That’s apparently how their systems are currently set up – and they won’t be changing it to accommodate the one-year flexibility. If your claim is rejected because of that, you can resubmit the claim with a valid code. This appears to be substantially different from the original statement around ICD-10 flexibilities that was released on July 6.

Although there are still questions about which ICD-10 coding mistakes will or will not be overlooked during the first year, one thing seems certain, CMS has no plans to extend the ICD-10 implementation deadline. Now is the time to make sure you and your staff are ready, by submitting valid and correct family codes.


1Ward, Dr. J. Thomas, T-System, Inc. Informer 24, 8/21/15.


Topic: EMR/EHR, Medical Billing | Content Type: Blog Articles

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