Medicare Compliance & Reimbursement

You've got just over a month left before you need to update your diagnosis codes -- and you've only got three years left until the ICD-9 series is replaced by the new, overhauled ICD-10 codes, HHS announced last week.

Although Oct. 1 -- the date you'll need to institute the new ICD-9 codes -- is fast approaching, the Dept. of Health and Human Services (HHS) revealed that ICD-10 codes aren't too far behind.

On Aug. 15, HHS announced its proposal to replace the ICD-9 codes with the ICD-10 series effective Oct. 1, 2011. Not only would the new code set completely overhaul your claims systems, software and superbills -- but it could require vast training for your staff.

Here's why: The ICD-9 code series includes 17,000 codes. The ICD-10 code set, however, contains more than 155,000 codes that you'll have to wrap your brain around if it's implemented as HHS hopes it will be.

"We recognize that the transition to ICD-10 will require some upfront costs, but each year of delay would create additional costs, both because of the limitations of ICD-9 and because of the need to employ the greater precision that ICD-10 codes provide to support value-based purchasing of health care and other initiatives," said CMS Acting Administrator Kerry Weems in a statement.

Many medical practices were surprised by the news of the impending ICD-10 implementation, despite the fact that CMS has been building the new code set for years.

"We've been thinking of ICD-10 as this far-away prospect that may never take hold," says Heather Corcoran with CGH Billing. "The new announcement sort of brings us back to the reality that this will indeed take effect."

The HHS is currently seeking comments on the proposed ICD-10 code set and transaction standards by Oct. 21. To read more, you can visit the CMS Web site at www.cms.hhs.gov/TransactionCodeSetsStands/02_TransactionsandCodeSetsRegulations.asp#TopOfPage.

• CMS may have boasted that it slashed inappropriate spending in 2006, but the agency allegedly overlooked nearly $2.8 billion in improper Medicare spending, according to a late-breaking new report.

On Aug. 21, the New York Times reported that the OIG will soon issue a document indicating that CMS "told outside auditors to ignore government policies that would have accurately measured fraud." If the auditors had properly reviewed the records, they would have found about $2.8 billion more in improper spending by DME suppliers, the Times article indicates.

Congress members are outraged by what they refer to as CMS' attempt to "cook the books."

Look to Medicare Compliance & Reimbursement in the coming weeks for more information when the OIG issues its final report on this subject.

• CMS appears to be getting its feet wet in pay-for-performance, announcing high marks for the participants of its PGP program.

In an Aug. 14 news release, CMS announced that each of the 10 groups participating in the Physician Group Practice (PGP) program "improved the quality of care delivered to patients with congestive heart failure, coronary artery disease, and diabetes mellitus during performance year two of the demonstration."

Because the participating groups met their pre-set benchmarks, they collected bonus payments totaling $16.7 million.

"We are paying for better outcomes and we are getting higher quality and more value for the Medicare dollar," said CMS Acting Administrator Kerry Weems in the statement.

Weems also appeared to confirm what many analysts had already suspected -- that the pilot program is simply an "audition" for a move to pay-for-performance.

"These results show that by working in collaboration with the physician groups on new and innovative ways to reimburse for high quality care, we are on the right track to find a better way to pay physicians," Weems said.