Petition to President Obama Update: CMS Offers ICD-10 Contingencies

SILICON VALLEY, CA--(Marketwired - July 16, 2015) - In conjunction with the AMA, The Centers for Medicare and Medicaid (CMS) have released details of a contingency policy for a safe transition to the federally mandated and highly controversial diagnosis coding standard known as ICD-10, which goes into effect Oct. 1st, 2015 -- now less than three months away.

The CMS contingency items mirror one-for-one the requests in a petition to President Barack Obama drafted by the medical software maker PracticeSuite, Inc. which it posted on its corporate website and has received attention from lawmakers, naysayers, and supporters of the petition -- mainly physicians and their staff.

While some intent on derailing the new diagnosis system are calling for a permanent delay, the PracticeSuite petition promotes the position of merely separating the new coding initiative from the claim payment process so that medical practices are not overrun with denied claims and unpaid patient visits that could result in undercapitalized practices closing their doors.

"Small physician-owned practices are at-risk if they are unable to withstand the 3-6 months of interrupted cash flow that is predicted by CMS and other industry experts," states CEO Vinod Nair. The Centers for Medicare & Medicaid estimate claims denial rates to increase 100 to 200 percent in the early stages of coding. Further, Medicare expects small practices to be the hardest hit.

"But small practices make up half of all US practicing physicians; and in primary care where there is already a national shortage, they are the lowest paid and least able to bear both the direct and indirect costs of implementing ICD-10.

"We were startled that our suggestions are mirrored almost 'as-is' in the Centers for Medicare and Medicaid's plan," says Nair who summarizes the petition points as:

  • 1. For 12 months following 10/1/15, payers cannot deny claims based solely on minor ICD-10 diagnosis coding errors.
  • 2. During those 12 months, payers cannot delay ICD-10 claims payments. Errors will be reported to providers with a request for corrected information.
  • 3. During those 12 months, payers cannot enforce the additional clinical documentation required by ICD-10.

"And fourthly," states Nair, "'Advanced Payments' are to be made available to practices in the event that internal payer glitches slow down payment processing."

In a best case scenario, the transition to ICD-10 goes smoothly. But in a worst case, a meltdown at the payer level is possible, as some payers are still not able to test ICD-10 in a production environment; and given that the most reliable data points to small practices being the most ill prepared, it is hard to imagine a best case scenario taking place for small practices.

"Although the decision by CMS is encouraging, our work is far from over," states Nair.

Over 40% of a practice's medical claims are paid by private insurance payers who mostly regulate themselves. With no intervention, physicians are at the mercy of an adversarial relationship in which benefit payers typically work as hard as they can to keep every penny of the insurance premiums in their own pocket.

"We believe that only an executive order can provide a true safeguard to an already fragile healthcare system during this transition," states Nair. "Medicare has led the example, but we understand that the only way to make the playing field level is for the President to step up and issue a directive that applies to all payers, which everyone must adhere to."

Although recent news puts out-of-pocket expense for ICD-10 at $3,430 per physician or $8,167 per small practice (PAHCON survey of 276 practices), the most recent data from the American Medical Association estimates productivity loss for small practices at $8,500 to $20,250 and payment disruption at $22,579 to $100,349. Other countries that have made the transition, such as Canada, have experienced productivity losses of 23% to 50% that have lasted years.

Physicians are becoming vocal and expressing their concerns about the near-term impact the transition is expected to have on cash flow due to reimbursements delays caused by coding errors, claim denials, and the inability of payers to internally process medical claims:

Dr. Judy Vanmalderen of Ohio calls the ICD-10 transition "a terrible financial burden for doctors who are trying to maintain a solo practice." And another signatory of the PracticeSuite petition says her office is "still recovering from having to implement Electronic Health Records."

"We are calling on all physicians to step up and support the petition now," says Nair. "Only in unity of voice can we ensure that small businesses remain in business amidst the turbulence of complying with this federal mandate."

Read and sign the petition

Is New Bill Strong Enough to Fight ICD-10 Meltdown

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