CMS Grace Period Falls Short -- Private Insurances Left Unaddressed

SILICON VALLEY, CA--(Marketwired - July 27, 2015) - In response to the recent ICD-10 policy update by The Centers for Medicare & Medicaid, software maker PracticeSuite, Inc. says that the new plan, although good falls short of providing a complete safeguard for medical practices in that it fails to address Private Insurances:

The PracticeSuite Petition to the White House urges President Obama to mandate a reimbursement contingency plan for all health benefit payers, to prevent interruption of payments during the transition to the new ICD-10 coding system.

For those arriving late to the game, Oct. 1, 2015 is the deadline for the new federally mandated coding initiative referred to as ICD-10, (International Classification of Diseases - Tenth Revision). ICD-10 has been in use globally for decades except in the United States.

In a typical practice (no one really knows what that means by the way) about 80% of a practice's revenue is paid in-arrears via insurance reimbursements, sometimes long after medical treatment has been rendered. Roughly 40% of these medical claims are from "commercial" or private health plans. So the recent win by the AMA of a twelve month grace period of coding leniency from CMS safeguards only about half of a practice's revenue.

"The CMS decision is good, but solves only half the problem," states PracticeSuite's CEO Vinod Nair. "Several thousand private insurances are going to need more direction than just looking to CMS for an example."

Although it's in every insurance payer's best interest to maintain good relations with its provider base, it is not the knee-jerk reaction of insurance company shareholders to protect the nation's healthcare system: Each individual payer sets its own internal policies of what it will do in the advent of a reimbursement meltdown come Oct. 1st.

"To avoid an inevitable disruption to payments, the contingency must be universal and applicable to all payers," states Mr. Nair.

Some insurance payers are avowedly still unable to process ICD-10 claims, which means doctors will have to produce two versions of claims for the foreseeable future if they want to get reimbursed. CMS processes a billion claims a year from 1.6 million providers and completes its final testing today. Its previous testing included 875 participants and tested 23,138 claims. "This small sample of the most prepared in no way represents the readiness of the larger payer/provider community," states Nair.

The question of the hour is who will require an entire industry to protect its weakest links -- patients and the small medical businesses that serve them?

The changeover is not without controversy among the medical community; as most physicians neither welcome, nor have the time and/or resources to implement the new coding system. A recent survey of MGMA members found that about 25% of respondents were still using older 4010 version software to send medical claims to clearinghouses. The update to version 5010 went into effect in 2012. A huge division exists over the need for, or the validity that the new system is a betterment.

If the case of whether the costs of ICD-10 outweigh its benefits is arguable, the timing of the changeover -- at the exact confluence of Meaningful Use and Electronic Health Records, Physician Quality Reporting and is like arguing in favor of the conditions that turned Hurricane Sandy into a superstorm.

The heart of the problem may not be at Medicare or Medicaid as they aren't considered by most medical billers to be the slowest payers. Medicare may audit or make adjustments to reimbursements, but they tend to pay in a timely manner. Medicaid doesn't pay much, but they pay quickly. Account Receivables tend to pile up when insurances (read private insurance) challenge claim details, or hold up payments, sometimes indefinitely, and affix expiration dates on responses.

"Small practices don't have the resources to doggedly pursue denied claims," says Nair. Statistics show that only 48% of denials are ever followed up. The resources to research and document and successfully appeal a denied payment is consuming." A sudden increase in denials or a dramatic increase in A/R Days will prove tough on small businesses, or potentially devastating to a practice that's unprepared and undercapitalized.

"Now that CMS has stated a clear and strong contingency policy, we are calling on all physicians to support the petition asking President Obama to make it applicable to all payers," states Nair.

No Disruption of Payments - Sign the Petition

ICD-10 Training: By Specialty

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Contact Information:

PracticeSuite, Inc.
Michael Sculley, VP Mktg.
Msculley {at}