ICD-10 Grace Period Winds Down

Last year’s shift to the ICD-10 coding system proved less disruptive than many had feared, but providers still need to be on guard against a potentially costly ICD-10 change scheduled to take effect this fall: The elimination of the Centers for Medicare & Medicaid Services’ (CMS) grace period for unspecified codes.

On October 1, CMS will end a one-year moratorium that prevented Medicare review contractors from denying ICD-10 claims based solely on the specificity of diagnosis codes. The grace period allowed for extensive use of “unspecified” codes in lieu of more detailed information and was aimed at helping ease the transition to the new documentation and coding requirements.

Unspecified codes were frequently used in ICD-9 and likewise have a role in ICD-10, according to CMS. But just what the agency will or will not allow after October 1 remains unclear. In an educational communication, CMS noted that unspecified codes in some instances are “the best choice to accurately reflect the healthcare encounter” if sufficient clinical information is not known or available.1

Fortunately, most organizations were well-prepared for the ICD-10 transition and have continued to improve their documentation and coding procedures since October. But it is likely that the moratorium resulted in some physicians and coders becoming overly reliant on unspecified codes in the face of ICD-10’s complexity and steep learning curve.

In addition, specialties like radiology sometimes are not provided with key clinical information from the referring physician and as a result have no choice but to use an unspecified code. Given the likelihood of increased scrutiny after October, doctors or organizations that use unspecified codes frequently need to examine how the codes are used or run the risk of higher denial rates and lost revenue.

Reduce unspecified codes to reduce your denials

At McKesson, we’ve calculated that unspecified code usage is currently averaging 28.6% of all codes submitted across our entire radiology client base. That is an increase of approximately 10% from the ICD-9 environment.

Based on what our radiology team has learned in recent months, here are four tips that can help you reduce your utilization of unspecified codes and decrease the likelihood of being hit with a denial increase in October:

  1. Identify where and why unspecified codes are being used. At McKesson, we produce monthly reports for our radiology clients that track unspecified code use by modality and by physician. We also track whether usage trends are up or down. Reviewing representative patient accounts often reveals patterns that help illuminate why the code was used. In some cases, electronic health records may default to “unspecified” in certain fields without giving the physician an opportunity to drill deeper to access greater specificity. 
  2. Our practice managers have found that missing information involving the following anatomical or morbidity details are generating many of the unspecified codes:
    • Body location
    • Laterality
    • Type of condition
    • Severity
    • Underlying organism
    • Trimester
    • Edema
    • Chest pain (location)
    • Pneumonia – viral versus bacterial
  3. If you determine that unspecified codes are primarily the result of referring physicians’ failure to provide necessary clinical data, mechanisms should be established to ensure that the information is provided in a timely fashion. For example, practices may want to add mandatory, hard-stop data fields in their health system’s automated order entry system to make sure the referring doctor provides the required detail.
  4. In the absence of more specific guidance from CMS, practices should work to reduce unspecified code usage while continuing to improve their clinical documentation. In addition, groups should monitor unspecified code reduction rates to ensure that the reductions equate to a comparable decline in claim denials.
Better safe than sorry

Some of radiologists have pushed back about the need to improve their documentation practices in order to help reduce unspecified codes. They believe that since the issue has not yet affected reimbursement, it is not a problem. Although it is certainly possible that CMS will not significantly alter the circumstances in which unspecified codes are deemed acceptable, it is equally possible that these codes will begin to generate denials and rejections when the grace period is over. In any case, until more specific guidance emerges or until denial patterns become clear after October 1, McKesson believes it is better to be cautious and pro-active about something that could have a major impact on revenue and income.

As experts in coding for diagnostic radiology, interventional radiology, nuclear radiology and radiation oncology, McKesson Business Performance Services for Radiology can provide the revenue cycle management services that can help guide you through the complexities of the new healthcare environment. Whether improving operations, growing your practice or evaluating opportunities driven by value-based care, McKesson provides radiology practices with the strategies and support you need to determine the next step to take.

Let McKesson help you optimize financial performance, reduce operational costs, mitigate risk of non-compliance, and transition to value-based care.

1Information and Resources for Submitting Correct ICD-10 Codes to Medicare,” MLN Matters #SE1518, Department of Health and Human Services, Centers for Medicare & Medicaid Services

Author - Female

About the author

Jody Waters
Senior Client Manager - Radiology
McKesson Business Performance Services