Health Information Management

Q/A: How will ICD-10 affect OPPS?

APCs Insider, June 21, 2013

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Q: How will the change to ICD-10 affect the Medicare OPPS beginning October 1, 2014?

A: Hospitals will be required to assign ICD-10 codes for hospital outpatient encounters beginning with date of service October 1, 2014. This system requires the documentation of more specificity than is currently required with ICD-9, so facilities need to take certain steps to prepare.
Immediate attention should be directed to overall outpatient documentation improvement. For those who are not be familiar with ICD-10, some codes cannot be selected without specific information, such as laterality (right vs. left). Currently, ICD-9 does not require that type of specificity so this will require complete and detailed documentation. In addition, facilities myst begin coder training for ICD-10, including both CM and PCS. This training is required for the classic code sets of same day surgery, ED, observation, and other outpatient ancillaries.
Although Medicare does not require ICD-10-PCS code for outpatient claims, other third party payers may build the code set into their contracts for reimbursement purposes or just for the collection of data – similar to what they do currently with ICD-9 procedure codes.
Some non-Medicare payers are already looking at removing “unspecified” diagnosis codes from their coverage policies. This is potentially a huge impact on providers. If the documentation is not specific enough, and the only option to report the diagnosis is an “unspecified” code, the payer will deny reimbursement since the code will not support medical necessity or coverage.
It is crucial to address this with your ICD-10 steering committee and focus on your top five payers. What are they going to do regarding ICD-10? Many facilities are prepared to code both ICD-10-CM and ICD-10-PCS for outpatient encounters because their encoders can handle both code sets, and in turn, the granular data provided by ICD-10-PCS is proving to be an asset for all organizations.
Finally, let’s not forget about the practical application of ICD-10 for outpatient coders and auditors. The adage “practice makes perfect” is so very true in practical application of the I-10 codes. As with any new system, there will be a ramp up time where productivity is slower because the codes are new. It is vital that your coders and auditors be confident with the new coding system as part of their skill set.
Editor’s note: Denise Williams, RN, CPC-H, vice president of revenue integrity services at Health Revenue Assurance Associates, Inc., in Plantation, Fla., answered this question.

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