Category Archives: Conditional Payments

CMS Announces It has Issued more than 33,000 CPLs and CPNs Since October 1, 2015; More Are Coming!

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions, Helios

CMS Stack of PapersAs we have previously informed here, “in October 2015, the Centers for Medicare & Medicaid Services’ (CMS) Commercial Repayment Center (CRC) assumed responsibility for the recovery of conditional payments where CMS is pursuing recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation (WC) entity as the identified debtor.” On February 9, 2016, the CRC announced it has “issued more than 33,000 Conditional Payment Letters (CPLs) and Conditional Payment Notices (CPNs) since the transition.”  CMS further indicated that it “is aware that many insurers and WC entities are awaiting CPLs, CPNs, or demand letters.” As a result, CMS informed that it “is actively engaged with the CRC to improve responsiveness to requests for conditional payment information and the handling of correspondence.” https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Whats-New/Whats-New.html

Confused About When to Deal with the Benefits Coordination and Recovery Center Instead of the Commercial Repayment Center?

If you are still confused about when to deal with the Benefits Coordination and Recovery Center (BCRC) instead of the CRC, you are not alone. CMS indicates “you should contact the BCRC when Medicare is pursuing recovery from the beneficiary as the identified debtor. CMS pursues recovery from the beneficiary when the applicable plan has not reported ongoing responsibility for medicals (ORM) and has not otherwise notified CMS of primary payment responsibility. Typically this is when the beneficiary obtains a lump sum settlement, judgment, award, or other payment. This situation most frequently occurs with liability insurance, including self-insurance.”

Which means you should be dealing with the CRC if “you are an applicable plan or recovery agent for an applicable plan and you have questions about recovery cases initiated by the CRC.” As previously indicated by CMS, the CRC “pursues recovery directly from an applicable plan as the identified debtor when an applicable plan reports that it has ORM or otherwise notifies CMS of its primary payment responsibility, as the assumption is that the applicable plan’s responsibility is not in dispute. This situation most frequently occurs in no-fault insurance and workers’ compensation.”

Confused About What Prompts BCRC or CRC to Issue a Conditional Payment Notice Versus a Conditional Payment Letter?

If you are still confused about what prompts the BCRC or CRC to issue a CPN versus a CPL, you are definitely not alone. As CMS has previously explained, the CPN and CPL provide the same information regarding conditional payments and allow recipients an opportunity to dispute conditional payments before the demand is issued. However, there are some major differences.

A CPN will be issued by the CRC when “the applicable plan has notified CMS that it has primary payment responsibility for certain care and Medicare has made conditional payments. CMS may be notified of this through MMSEA Section 111 Mandatory Reporting or through a telephone call or written correspondence. In the absence of a dispute filed within the CPN response due date (30 days), the CRC will issue a demand letter automatically. The demand will include conditional payments included in the CPN as well as any additional conditional payments identified after the CPN was issued. It will provide instructions on making payment (within 60 days) or on formally appealing CMS’ determination (within 120 days).”

A CPL will be issued by the CRC when a “beneficiary (or their representative) reports a pending case where an applicable plan may have primary payment responsibility for certain care related to the injury and the MSP occurrence was not otherwise reported by the applicable plan itself (through MMSEA Section 111 reporting or by other means). The applicable plan may dispute conditional payments in the CPL, but unlike the CPN, there is no specific response due date. Therefore, the CPL is not automatically followed by the demand letter; the applicable plan or recovery agent must request it.”

Still Confused? Need Help Sorting all of this Out? Want an Agent to Handle it for You?

As CMS has previously indicated, applicable plans may appoint a recovery agent to work with the CRC and BCRC to resolve conditional payments. Helios Settlement Solutions serves as the recovery agent for several state, regional, and national self-insured, third party administrators, and insurers. We have a dedicated team of attorneys, nurses, pharmacists, claims specialists, and conditional payment specialists ready to assist you and your team. If we can be of any assistance to your organization in dealing with and ultimately resolving CRC or BCRC conditional payments, please contact us at 888.672.7674, or at contactus@helioscomp.com.

2015 Helios Settlement Solutions MSP Compliance Webinar Series: An Update on Conditional Payments Resolution

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions, Settlement Solution, Helios

Insurance LawAt the top of our goals every year is to make sure we continue to serve our clients by providing several educational opportunities on all components of Medicare Secondary Payer compliance. This year, in addition to the blogs we have posted, presentations we have delivered, opinions we have written, and research articles we have published, we also presented three webinars on the latest MSP compliance issues. Last week, we reviewed our Update on Mandatory Insurer Reporting; today we review our Update on Conditional Payments Resolution.

On Wednesday, October 14, 2015, 2015, from 1 to 2 pm, Helios hosted its second 2015 MSP Compliance Webinar, An Update on Conditional Payments Resolution. The webinar was presented by Lavonya Chapman, Esq., RN, Medicare Secondary Payer Compliance Counsel at Helios and Rafael Gonzalez, Esq., Vice President of Strategic Solutions at Helios.

Lavonya and Rafael discussed primary payers, including group health providers, workers’ compensation, liability and no-fault insurers, and self-insured entities, as well as beneficiaries, physicians, attorneys, hospitals, or clinics that receive payment from a primary payer. They also discussed primary payer responsibility, even when liability is contested, demonstrated by settlement, judgment, award, or other payment.

Lavonya and Rafael also spent some time addressing Medicare’s direct right of action against all primary payers, including the Medicare beneficiary, medical provider, physician, attorney, state agency, or private insurer. They also discussed private cause of action for double damages against Group Health Plans and Non-Group Health Plans. Lavonya specifically mentioned several federal court cases from around the country that have allowed Medicare Advantage Plans, medical providers/facilities, and plaintiff/counsel/estate double damages under MSP Act private cause of action provision.

Lavonya and Rafael spoke about three programs currently available when dealing with resolution of conditional payments in liability settlements. The first deals with a liability settlement, judgment, or award pertaining to physical trauma injury/accident only, where if the settlement, judgment, or award is $300 or less and no other settlements, judgments, or awards are expected, Medicare waives any conditional payments it may have paid. The second allows for a percentage of the settlement in liability claims. Lavonya and Rafael indicated that if in a liability claim for physical trauma injury only, the settlement, judgment, or award is $5,000 or less, and there is no expectation of receiving other payments, CMS will accept 25% of said settlement, judgment, or award to resolve all conditional payments due. The third applies if a liability settlement is for a physical injury only, not related to ingestion, exposure, or implantation, and such liability settlement, judgment, or award is $25,000 or less and there is written physician attestation that no medical treatment has occurred in the last 90 days, CMS will negotiate the resolution of such conditional payments.

Lavonya and Rafael also addressed the new Commercial Recovery Center (CRC) conditional payment recovery process, effective October 5, 2015. They indicated that in situations where the primary payer has accepted responsibility for ongoing medical care associated in either a work comp claim, no-fault matter, med-pay situation, or PIP type case, the CRC will identify conditional payments related to the claim made by Medicare and a Conditional Payment Notice (CPN) will then be issued to the Applicable Plan (AP). Applicable plans will have the opportunity to dispute medical claims identified on the CPN before a formal request for repayment, or demand, is issued. However new to the process is that APs will have 30 days from the date of the CPN to dispute whether the payments included in the CPN are related to the claim. If the AP does not respond within 30 days, the CRC will assume such charges are related to the claim and forward a demand letter. Lavonya and Rafael made it clear that the AP will have 60 days from the demand letter within which to make payment without being charged any interest. Payments made after the 60 days will be charged interest from the date of the demand letter.

Lavonya and Rafael explained how for the first time, applicable plans may appeal the amount or existence of the debt, in part or in full. As of April 28, 2015, applicable plans have an opportunity to initiate a formal appeal process by requesting redetermination, reconsideration, a hearing, review, and federal court action. They also reminded listeners that if the debt continues to be unresolved for 120 days, the CRC will issue a Notice of Intent to Refer (NITR) letter informing the AP of next steps should the debt remain unpaid, including referral to the Department of Treasury (DOT) for collection.

Lavonya and Rafael also explained that the AP must provide an accurate recovery address via the MMSEA Section 111 mandatory reporting process, as this is the address CMS will use to communicate with the AP. In addition, if another individual or entity is involved with post-demand correspondence to resolve a matter on the plan’s behalf, the CRC must have a written authorization on file. In other words, once the demand is issued, recovery agents will need to submit written authorization to continue working with the CRC.

Last, Lavonya and Rafael provided some insight and detail about the new formal appeals process available to payers, or applicable plans. As a result of the Strengthening Medicare and Repaying Taxpayers (SMART) Act, liability, self-insured, no-fault, and workers compensation entities are now afforded a formal multilevel appeal process, which includes: an “initial determination” (the MSP recovery demand letter), a “redetermination” by the contractor issuing the recovery demand, a “reconsideration” by a Qualified Independent Contractor (QIP), a hearing by an administrative law judge (ALJ), a review by the Departmental Appeals Board’s Medicare Appeals Council (MAC), and judicial review (USDC, USCA, and USSC). Therefore, if after dispute, an AP still believes an item should be removed from the Statement of Responsibility, then the Applicable Plan may appeal same using this process.

We are so very appreciative for your trust and confidence in us. We are so very grateful for your reliance on us and for allowing us to continue to serve your MSP compliance needs. Be on the lookout for details on our 2016 Helios Settlement Solutions MSP Compliance Webinar Series. We will soon announce dates and times for CEU accredited quarterly presentations that will concentrate on legislative, regulatory, and legal updates to mandatory insurer reporting, conditional payment resolution, and set aside allocations, approval, and administration, as well as non-CEU quarterly offerings that will focus on outside the box, creative problem solving solutions to the MSP compliance issues you have asked us to address and assist you with. As always, we welcome your thoughts and ideas on how to better to serve you, including possible topics for discussion and presentation during our 2016 webinar series. Please contact us at 888.672.7674, or at contactus@helioscomp.com.

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Tennessee Federal District Court Allows MAP PCA Against No-Fault Insurer

By Rafael Gonzalez, Esq.
Vice President, Stragetic Solutions

073115_1834_FloridaFede1.jpgOn September 1, 2015, the United States District Court for the Eastern District of Tennessee published its opinion on Cariten Health Plan, Inc. v. Mid-Century Insurance Company, concluding that since MAP has pleaded sufficient facts to support an inference that PIP carrier violated §1395y(b)(2)(A) when it failed to pay Enrollee’s medical expenses as a primary payer under the Medicare Statute and thereafter refused to reimburse MAP for payment of those expenses, because §1395y(b)(3)(A) provides for a federal right of action in this instance, the MAP has stated a plausible claim to relief, thereby allowing MAP’s claim to move forward.

Plaintiff, Cariten Health Plan, Inc., is a Medicare Advantage Organization (MAO) that provides benefits to Medicare beneficiaries who elect to enroll in privately-administered Medicare Advantage Plans (MAP). Defendant, Mid-Century Insurance Company, is a no-fault insurance provider that offers Personal Injury Protection (PIP), Medical Payments (Med Pay), and Guaranteed Benefits Coverage (GBC) to individuals in accordance with its insurance policies.

Plaintiff alleges that Enrollee 1 received Medicare benefits through a MAP administered by plaintiff and held a no-fault insurance policy with defendant. Plaintiff alleges that on or about October 17, 2012, Enrollee 1 was injured in an automobile accident in Greeneville, Tennessee, and received medical treatment for those injures. Enrollee 1 was charged at least $55,378.70 by her medical service providers as a result of this medical treatment. Plaintiff discharged the medical providers’ bills with a payment of benefits in the amount of $15,799.43.

Plaintiff further alleges that after making these medical payments, plaintiff learned that defendant held a no-fault insurance policy with defendant, which was effective at the time of the accident. Plaintiff notified defendant on multiple occasions of plaintiff’s payment of the medical charges for Enrollee 1’s injuries and requested reimbursement from defendant. Defendant responded to these requests with a form letter from the Farmers National Document Center in Oklahoma City, Oklahoma, stating that its no-fault coverage of Enrollee 1 was first party coverage, and therefore, plaintiff had no subrogation rights.

Plaintiff initiated this action on October 8, 2014, seeking a declaration that the no-fault insurance coverage issued by defendant is primary to Medicare benefits advanced by MAOs such as plaintiff, and that when an MAO such as plaintiff has advanced benefits in which its payments are secondary to defendant’s payment obligations, defendant is obligated to make appropriate reimbursement to the MAO. Plaintiff also claims that it is entitled to double damages from defendant for the payment of $15,799.43 it made to discharge Enrollee 1’s medical bills, pursuant to the private right of action provided by 42 U.S.C. §1395y(b)(3)(A), or in the alternative, recovery of the entirety of the $55,378.70 in charges submitted by Enrollee 1’s medical providers, pursuant to a federal common law right of action. Additionally, plaintiff brings a claim for restitution or unjust enrichment pursuant to Tennessee law. Finally, plaintiff seeks an equitable accounting of the amounts that defendant owes plaintiff for medical claims that plaintiff paid, but which defendant’s no-fault insurance coverage made defendant a primary payer. Defendant’s motion to dismiss followed.

The Court here indicates that although most Medicare-eligible individuals receive Medicare benefits directly from the government, individuals can elect instead to receive their benefits through private insurance companies that contract with the government to provide Medicare Advantage plans. In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353, 355 (3d Cir. 2012) (citing 42 U.S.C. §1395w-21(a)(1)). These plans are governed by Part C of the Medicare Statute. 42 U.S.C. §§1395-1395lll (Medicare Statute); 42 U.S.C. §§1395w-21-1395w-28 (Part C).

The Court also points out that Plaintiff, however, is not always required to provide primary payment for covered medical services. In 1980, Congress enacted the Medicare Secondary Payer Act as part of an effort to counteract escalating healthcare costs. Mich. Spine & Brain Surgeons, PLLC v. State Farm Mut. Auto. Ins. Co., 758 F.3d 787, 789-90 (6th Cir. 2014). Under the Medicare Secondary Payer Act, in most situations where an individual is covered by both Medicare and another payer, Medicare serves as the secondary payer rather than the primary payer. Put differently, when payment is available from a primary plan, the primary plan and not Medicare is responsible for paying the costs of the individual’s medical treatment.

The Court correctly points out that Congress incorporated the principles of this secondary payer scheme into privately-administered MA plans when it enacted Part C in 1997. 42 U.S.C. §1395w-22(a)(4); Balanced Budget Act of 1997, Pub. L. No. 105-33, §§1851-1859, 111 Stat. 251, 276-327. As set forth in the organization as secondary payer provision of Part C: Notwithstanding any other provision of law, a MAO may in the case of the provision of items and services to an individual under a MA plan under circumstances in which payment under this subchapter is made secondary pursuant to section 1395y(b)(2) of this title charge or authorize the provider of such services to charge, in accordance with the charges allowed under a law, plan, or policy described in such section– (A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or (B) such individual to the extent that the individual has been paid under such law, plan, or policy for such services. 42 U.S.C. §1395w-22(a)(4).

Section 1395y(b)(3)(A) provides: There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A). Paragraph (1) governs the requirements of group health plans in providing medical coverage for individuals who also are eligible for Medicare, 42 U.S.C. § 1395y(b)(1), and paragraph (2)(A) establishes the Medicare as secondary payer scheme that Congress cross-referenced in the MAO secondary payer provision, §1395y(b)(2)(A); §1395w-22(a)(4).

The Sixth Circuit has interpreted the private cause of action provision of §1395y(b)(3)(A) to permit medical service providers to recover payment for medical services from a group health plan designated as a primary payer under §1395y(b), when the group health plan denied payment on behalf of an enrollee because the enrollee was eligible for Medicare. Bio-Medical Applications of Tenn., Inc. v. Cent. States Southeast & Southwest Areas Health & Welfare Fund, 656 F.3d 277, 294 (6th Cir. 2011). In so holding, the panel in Bio-Med. interpreted the phrase “in accordance with paragraphs (1) and (2)(A)” contained in §1395y(b)(3)(A) to mean that a plaintiff seeking to recover against a group health plan must show that the group health plan violated the provisions of both §1395y(b)(1) and §1395y(b)(2)(A).

The Sixth Circuit has since found §1395y(b)(3)(A) to be ambiguous with respect to the statutory obligations of primary payers that are not group health plans. Mich. Spine, 758 F.3d at 792. Therefore, the court in Michigan Spine deferred to the interpretation of the statute contained in regulations promulgated by the Centers for Medicare and Medicaid Services (CMS). Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-45, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1985) (explaining that in the face of an ambiguous statute, federal courts must afford deference to and seek guidance from agency regulations). In doing so, the court concluded that a plaintiff seeking to recover against a primary payer that is not a group health plan need only show that the primary payer failed to comply with its obligation to pay under §1395y(b)(2)(A). Thus, the court held that a medical service provider had a federal right of action to recover payment for services rendered to a person covered by an automobile insurance policy, when the automobile insurance policy made the insurance company a primary payer under §1395y(b)(2)(A).

The Sixth Circuit does not appear to have answered the question presented by this case: whether §1395y(b)(3)(A) gives an MAO, rather than a medical service provider, a right of action to recover from a primary payer when the MAO has made medical payments that should have been made by the primary payer. In Avandia, the Third Circuit answered this question in the affirmative. 685 F.3d at 367. Undertaking an extensive review of the statutory text, statutory framework, legislative history, and public policy, the court concluded that §1395y(b)(3)(A) unambiguously provides a federal right of action for an MAO to recover medical payments from a primary payer. Additionally, the court noted that CMS regulations also interpret the Medicare Statute to provide such a federal right of action. Therefore, court explained that even if §1395y(b)(3)(A) were ambiguous, the court would defer to the interpretation of CMS and find that MAOs have a private right of action under §1395y(b)(3)(A) to recover medical payments from primary payers.

The Court here finds the Third Circuit’s analysis in Avandia to be persuasive. Thus, the Court adopts the reasoning and holding of Avandia, also citing to Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 2015 U.S. Dist. LEXIS 31875, at *13-14, 2015 WL 1191208, at *5 (S.D. Fla. Mar. 16, 2015) (adopting the reasoning and holding of Avandia); Collins v. Wellcare Healthcare Plans, Inc., 73 F. Supp. 3d 653, 665 (E.D. La. 2014) (same); Humana Ins. Co. v. Farmers Tex. Cnty. Mut. Ins. Co., 2014 U.S. Dist. LEXIS 166654, at *4-5, 2014 WL 8388619, at *2 (W.D. Tex. Sept. 24, 2014) (same). Accordingly, the Court concludes that plaintiff has a federal right of action in this case pursuant to §1395y(b)(3)(A).

The Court therefore concludes that viewing the allegations in the light most favorable to plaintiff, the Court finds that plaintiff has pleaded sufficient facts to support an inference that defendant violated §1395y(b)(2)(A) when it failed to pay Enrollee 1’s medical expenses as a primary payer under the Medicare Statute and thereafter refused to reimburse plaintiff for plaintiff’s payment of those expenses. Because §1395y(b)(3)(A) provides plaintiff with a federal right of action in this instance, and plaintiff has stated a plausible claim to relief, the Court allows the claim to move forward to trial.

While it was expected the Tennessee District Court would look at and rely upon decisions previously made by the Sixth Circuit Court of Appeals to decide this matter, what is surprising is the fact that the decision does not mention any of the recent decisions made by the Southern District of Florida Court finding that unless there is evidence of primary payer responsibility, such private causes of action under the Medicare Secondary Payer will not be allowed.

On April 2, 2015, the United States District Court for the Southern District of Florida published its opinion on MSP Recovery, LLC v. Progressive Select Insurance Company, finding that since Plaintiff did not allege that Defendant’s responsibility to pay had been demonstrated by settlement, judgment, award, or any other means, the court granted Defendant’s motion to dismiss, dismissing the claim without prejudice, thereby allowing Plaintiff to reassert its claim after Defendant’s responsibility to pay under Section 1395y(b)(3)(A) has been demonstrated. The court followed the findings of the 11th Circuit in Glover v. Liggett Group and Phillip Morris, USA, in which that court concluded that a primary plan has a duty to reimburse a secondary payer MAO for conditional payments only “if it is demonstrated that such primary plan has or had a responsibility to make payment.”

On July 22, 2015, the same court published its opinion on MSPA Claims 1, LLC, v. Liberty Mutual Insurance, concluding that a claim for double damages under the MSP private cause of action does not accrue until the primary payer’s responsibility to pay has been demonstrated. The court found that even where an insurance contract exists between two parties, an insurer should still be able to contest contractual liability without being exposed to double damages. The Florida PIP statute, upon which Plaintiff relied to argue that Defendant is contractually and statutorily obligated to pay, recognizes that an insurer should be able to assert that the claim was unrelated, was not medically necessary, or was unreasonable. Therefore, the court holds that a contractual primary payer, such as a no-fault/PIP insurer, should have the ability to contest payment of claims without facing MSP private cause of action double damages.

On August 28, 2015, the same court published its opinion on MSPA Claims 1, LLC v. IDS Property Casualty Insurance Company, concluding again that because Plaintiff’s allegations failed to demonstrate Defendant’s responsibility to pay through “a judgment, a payment conditioned upon the recipient’s compromise, waiver, release, or by other means,” the Amended Complaint must be dismissed without prejudice to Plaintiff to reassert its claim after Defendant’s responsibility to pay under section 1395y(b)(3)(A) has been demonstrated.

helios-logoAs always, Helios Settlement Solutions will continue to monitor MSP private cause of action legal opinions throughout the country and report on them here for you. If we can help you with this or any other Medicare Secondary Payer compliance issue or matter, please contact us at 888.672.7674, or at contactus@helioscomp.com.

Ready or Not, Here it Comes: Welcome to the New World of ICD-10!

Rafael Gonzalez, Esq.
Vice President, Strategic Solutions, Helios

Introduction

changesAlthough the vast majority of the medical leading countries around the world have been working with ICD-10 codes for many years, the US will finally enter the picture and join those which have adopted ICD-10 for diagnosis, treatment, billing, and reporting medical information starting October 1, 2015. The Center for Medicare and Medicaid Services (CMS) has been leading the efforts for quite some time. After years of roadblocks, hesitation from the medical community, and the challenge of the costs in adopting a new system for all involved, public and private systems, ICD-10 will become a reality for all using and communicating medical information October 1, 2015. Although only required for providers when dealing with Medicare and Medicaid, the reality is that both of these systems have such a large impact on all other private medical processes and systems, that virtually all other private medical payers, insurers, providers, and users will also adopt ICD-10 as the universal method of communicating medical information. My hope here is to provide you with a basic introduction to ICD-10, including how we got here, basics about the codes, and some of the expected benefits.

ICD-10 Implementation History

In the U.S., the transition to ICD-10 has been a 7 year project. On August 22, 2008, the US Department of Health and Human Services (HHS) proposed HIPAA Administrative Simplification: Modification to Medical Data Code Set Standards to Adopt ICD–10–CM and ICD–10–PCS. On January 16, 2009, HHS published a final rule in which the Secretary adopted ICD–10 as the HIPAA standard code set to replace ICD–9–CM. The 2009 ICD–10 final rule established an October 1, 2013 compliance date for ICD–10. As a result of industry concerns, in 2012, HHS published an ICD–10 delay final rule in which the compliance date for ICD–10 was delayed from October 1, 2013 to October 1, 2014. However, before the effective date of this last delay, Congress enacted the Protecting Access to Medicare Act of 2014 (PAMA) on April 1, 2014, requiring the Secretary of HHS to adopt ICD–10 no sooner than October 1, 2015. As a result, on August 4, 2014, HHS published its final rule implementing section 212 of PAMA by establishing October 1, 2015, as the new ICD–10 compliance date.

What is ICD-10?

Developed by the World Health Organization (WHO) as the International Classification of Diseases (ICD), ICD became a method of coding medical patients’ state of health and institutional procedures. ICD-9, the version in use prior to the conversion to ICD-10, was adopted by the WHO in 1979. ICD-10 was adopted by the WHO in 1990. Countries using ICD-10 for reimbursement or case mix include the United Kingdom (1995), Nordic countries (Denmark, Finland, Iceland, Norway, Sweden) (1994 –1997), France (1997), Australia (1998), Belgium (1999), Germany (2000), and Canada (2001). Although certainly late as compared to these countries, taking so long to adopt ICD-10 has given us the ability to study and examine how other countries have struggled through and been able to meet ICD-10 challenges. As a result, our version of ICD-10 is different than the rest of the world. Ours includes ICD-10-CM and ICD-10-PCS.

ICD-10-CM and ICD-10-PCS

Although there is generally one version of ICD-10 used throughout the world, in the U.S., ICD-10 includes two separate versions: ICD-10-CM, which defines clinical modification in all health care settings of the WHO standard for diagnoses, and ICD-10-PCS, which is the inpatient procedures coding system for hospital settings developed and maintained by CMS. ICD-10-CM and PCS apply to all HIPAA-covered entities, and will provide more information per code, will provide better support for care management, quality measurement, and analytics, and will significantly improve our ultimate ability to understand risk and severity. In a time and era in which data is king, ICD-10 will allow all of us who collect such information to have greater detail about anything and everything medical.

ICD-10-CM Chapters and Categories

ICD-10-CMs are broken down into 21 chapters. Each chapter covers specific categories:

  • Chapter 1: Certain Infectious and Parasitic Diseases (A00-B99)
  • Chapter 2: Neoplasms (C00-D49)
  • Chapter 3: Disease of the blood and blood-forming organs and certain disorders involving the immune mechanism (D50-D89)
  • Chapter 4: Endocrine, Nutritional, and Metabolic Diseases (E00-E89)
  • Chapter 5: Mental, Behavioral and Neurodevelopmental disorders (F01 – F99)
  • Chapter 6: Diseases of the Nervous System (G00-G99)
  • Chapter 7: Diseases of the Eye and Adnexa (H00-H59)
  • Chapter 8: Diseases of the Ear and Mastoid Process (H60-H95)
  • Chapter 9: Diseases of the Circulatory System (I00-I99)
  • Chapter 10: Diseases of the Respiratory System (J00-J99)
  • Chapter 11: Diseases of the Digestive System (K00-K95)
  • Chapter 12: Diseases of the Skin and Subcutaneous Tissue (L00-L99)
  • Chapter 13: Diseases of the Musculoskeletal System and Connective Tissue (M00-M99)
  • Chapter 14: Diseases of Genitourinary System (N00-N99)
  • Chapter 15: Pregnancy, Childbirth, and the Puerperium (O00-O9A)
  • Chapter 16: Certain Conditions Originating in the Perinatal Period (P00-P96)
  • Chapter 17: Congenital malformations, deformations, and chromosomal abnormalities (Q00-Q99)
  • Chapter 18: Symptoms, signs, and abnormal clinical and laboratory findings, not elsewhere classified (R00-R99)
  • Chapter 19: Injury, poisoning, and certain other consequences of external causes (S00-T88)
  • Chapter 20: External Causes of Morbidity (V00-Y99)
  • Chapter 21: Factors influencing health status and contact with health services (Z00-Z99)

ICD-10-PCS: Procedure Coding System

ICD-10-PCS are broken down into 16 categories. Each covers the following:

  • 0: Medical and Surgical
  • 1: Obstetrics
  • 2: Placement
  • 3: Administration
  • 4: Measurement and Monitoring
  • 5: Extracorporeal Assistance and Performance
  • 6: Extracorporeal Therapies
  • 7: Osteopathic
  • 8: Other Procedures
  • 9: Chiropractic
  • B: Imaging
  • C: Nuclear Medicine
  • D: Radiation Therapy
  • F: Physical Rehabilitation and Diagnostic Audiology
  • G: Mental Health
  • H: Substance Abuse Treatment

Getting Ready for ICD-10

On October 1, 2015, physicians, clinics, hospitals, diagnostic facilities, and all other providers must start using ICD-10 codes for services provided on or after October 1, 2015. A major difference between ICD-9 and ICD-10 codes include the fact that ICD-9-CM diagnosis codes use 3 to 5 digits, while ICD-10-CM codes use 5 to 7 digits. This change alone will allow for greater detail and significantly more codes that were badly needed to truly explain today’s medical care and treatment. ICD-9-CM procedure codes used 3 to 4 numeric digits, while ICD-10-PCS codes use 7 alphanumeric digits. As a result, unlike ICD-9, which had essentially run out of room for new codes and no longer had the ability to provide necessary detail, ICD-10 significantly expands the number of codes and details of each code for all conditions.

Why Transition to ICD-10

It is undeniable that ICD-10 better reflects current medical practice, terminology, and procedures. ICD-10 captures more specific data from clinical documentation than ICD-9. Fractures, for example, captures left vs. right side of body, initial vs. subsequent encounter, routine vs. delayed healing, and nonunion vs. malunion. ICD-10-PCS provides detailed information on procedures and distinct codes for all types of devices. As a result, the detail captured by ICD-10 can facilitate patient care coordination across settings, and improve public health reporting and tracking. In addition, while ICD-9 is running out of capacity and cannot continue to accommodate additional codes to reflect new diagnoses and procedures, the ICD-10 structure will be able to accommodate thousands of new codes for years to come.

Benefits of ICD-10

It is also clear that ICD–10 will provide greater specificity of diagnosis-related groups, will improve quality measurement and reporting capabilities, will improve tracking of illnesses, and reflect greater accuracy of reimbursement for medical services. We are convinced that ICD–10’s granularity will also improve data capture and analytics of public health surveillance and reporting, national quality reporting, research and data analysis, and provide detailed data to inform health care delivery and health policy decisions. It is universally accepted that the specificity of ICD-10 will improve the quality of healthcare we will all receive as ICD–10 includes significant improvements over ICD–9 in coding primary care encounters, external causes of injury, mental disorders, and preventive health, just to name a few.

ICD-10 Impacting Workers Compensation Public Policy Changes

As states have begun to prepare for ICD-10, numerous workers’ compensation jurisdictions have adopted changes to billing (electronic and paper) rules/requirements, placing these rules in alignment with federal requirements utilizing ICD-10 codes. States implementing ICD-10 billing requirements include CA, CO, FL, GA, NY, NC, OH, and TX. Similar to billing, WC jurisdictions have also adopted changes to their EDI/State Reporting rules and requirements also aligning them with usage of the ICD-10 codes. States implementing ICD-10 state reporting requirements include CA, OR, TX, and FL. National billing and state reporting standards, such as NCPDP and IAIABC have adopted the “most current” federal ICD requirements into their standards. States adopting drug formularies and nationally-recognized treatment guidelines also utilize ICD diagnosis and procedure codes for treatment compliance.

ICD-10 Conversion and Mandatory Insurer Reporting

ICD-10 also affects MSP, especially mandatory insurer reporting. For submissions prior to October 1, 2015, use of ICD-9-CM diagnosis codes is mandatory. For submissions beginning October 1, 2015, ICD-10-CM diagnosis codes will be required on all production Claim Input Files (CIP) and Direct Data Entry (DDE) add and update records with a CMS DOI on or after October 1, 2015. For submissions beginning October 1, 2015, either ICD-9-CM or ICD-10-CM diagnosis codes will be accepted on all add and update records with a CMS DOI prior to October 1, 2015. However, each record can only contain either all ICD-9-CM or all ICD-10-CM codes. RREs may not submit a combination of ICD-9-CM and ICD-10-CM diagnosis codes on one single record. RREs will not be required to convert or crosswalk ICD-9-CM codes submitted on previously accepted records to ICD-10-CM codes when submitting subsequent updates to those records.

More Effects of ICD-9 and ICD-10 on Medicare Secondary Payer

The effects of these changes don’t stop at MIR. Effective January 1, 2016, CMS has already indicated it will add an additional limitation to Medicare claims payments where insurers or workers’ compensation entities have reported to CMS that they have Ongoing Responsibility for Medicals (ORM). In situations where an insurer or workers’ compensation entity has reported to CMS that it has ongoing responsibility for medicals for specific care, CMS’ claims processing contractors will use the information provided by the insurer or workers’ compensation entity to determine whether Medicare is able to make payment for those claims. CMS has made it clear that insurers and workers’ compensation entities that notify Medicare that they have ORM are strongly encouraged to report accurate ICD-9 or ICD-10 codes as Medicare’s claims processing contractors will use this information to pay accordingly. In other words, reported ICD-10 codes will be key to challenging any conditional payment Medicare may be requesting reimbursement on and will be central to the determination of what items should or should not be included in a Medicare set aside.

Conclusion

The use of ICD-10 is effective October 1, 2015. ICD-10-CM is the new coding system for treatment in clinical settings. ICD-10-PCS is the new coding system for procedures in hospital settings. ICD-10 will go from about 18,000 existing codes (3,824 procedure codes and 14,025 diagnosis codes) to over 140,000 codes (71,924 procedure codes and 69,823 diagnosis codes). ICD-10 offers full description, greater detail and consistency within each code set; uses modern terminology for descriptions, based on modern technology; captures more specific data, therefore allows deeper analysis of data. ICD-10 structure will be able to accommodate thousands of new codes, now and into the future.

The industry expects workers’ compensation jurisdictions to adopt ICD-10 changes to billing (electronic and paper) rules/requirements. Most also expect WC jurisdictions to adopted changes to their EDI/reporting rules and requirements to align ICD-10 codes. It is also expected that states adopting drug formularies and nationally-recognized treatment guidelines will utilize ICD-10 diagnosis and procedure codes for compliance. Therefore, most expect ICD-10 codes will have a significant impact on all components of Medicare Secondary Payer compliance, including mandatory insurer reporting, conditional payments, and Medicare set asides.

For more than a year, Helios has been assisting clients with preparations for the adoption of ICD-10. In addition to testing systems and data, Helios created its own platform for converting ICD-9 codes to ICD-10 codes and vice versa. Our ICD look up tool allows clients to look up codes by matching specific terms. Our search tool also allows clients to use diagnosis codes or cause of injury codes to search for ICD-9 and ICD-10 codes and translate them into either one for use in mandatory insurer reporting, which of course also assists with conditional payments and set aside compliance. Should you be interested in speaking with us about this or any of our other Medicare Secondary Payer compliance products and services, please contact us at 888.672.7674, or at contactus@helioscomp.com. To sign up for our ICD-9/ICD-10 Search Tool, please visit https://medicareconnect.pmsionline.com/ICDCodeSearch/ICDCodeSearch.aspx