Medicare Compliance & Reimbursement

New codes take effect Oct.1., ready or not.

If providers were banking on the usual 90-day grace period to implement the 2005 ICD-9 codes, CMS has other news for them.

According to two Feb. 6 CMS transmittals (Nos. 89 and 95), the grace period allowed providers "to ascertain the new codes and learn about the discontinued codes," CMS says. But "HIPAA Transaction Standards eliminated the 90-day grace period for updating codes and requires providers to use the ICD-9 code in effect when service was provided," says Prinny Rose Abraham, RHIT, CPHQ, a health information management consultant with HIQM Consulting.

The result: Providers will have to begin using new and revised ICD-9 codes on Oct. 1, 2004. You will not have 90 days to continue using the old codes. For CPT codes and HCPCS Level II codes, providers will need to implement additions, revisions and deletions the day the new codes take effect: Jan. 1, 2005.

Planning: Providers need to be aware of the upcoming new diagnosis codes and instruct your coders or staff on their availability prior to Oct. 1.

Consequence: Claims using outdated codes will automatically be returned to the provider for corrections, which could slow down cash flow and result in extra time spent correcting documentation as well as claims, says M. Aaron Little, CPA, supervising consultant with BKD LLP in Springfield, CT.

What to do: Providers shouldn't encounter many coding difficulties or denials without a grace period as long as they update their encounter forms by the ICD-9 and HCPCS deadlines, says Melanie Witt, RN, CPC, MA, an independent coding consultant in Fredericksburg, VA. The Federal Register usually publishes new codes well in advance of their release, so you should have enough time to make the changes, she adds.

Download: After the Federal Register publishes the codes, CMS posts them on its Web site. You can locate new, revised and discontinued ICD-9 codes at http://www.cms.hhs.gov/medlearn/icd9code.asp. CMS will publish the updated CPT and HCPCS codes at www.cms.hhs.gov/providers/pufdownload/anhcpcdl.asp at the end of October 2004.

Beware: Medicare will be ready to accept these codes the day they become effective, but some private insurers may not be. These guidelines for grace periods apply to CMS, but private payers may not necessarily respond as quickly. If an intermediary denies a correct code, talk to the provider representative and alert him to the new code.