ICD-10 Basics: Achieving Accurate Reimbursement

December 22nd, 2011 / By Ann Chenoweth, RHIA

As providers shift from using ICD-9 to ICD-10, there will be benefits in the form of more accurate payments for new procedures, fewer rejected claims, fewer improper reimbursement claims and greater efficiency in the billing and reimbursement process.

ICD-10’s improved precision in documentation of clinical care will greatly improve the likelihood of submitting accurate claims the first time around and receiving appropriate reimbursement.

The increased granularity of ICD-10 code will help reduce the number of claims being investigated or rejected due to insufficient information.  ICD-10 will solve the problems caused due to lack of detailed information contained in the diagnosis and procedure code assignment.  Fewer rejected claims will reduce the amount of rework for providers leading to an efficient reimbursement process which in turn reduce negative impacts to your revenue cycle.

One of the key benefits of ICD-10-PCS is more accurate payment for procedures.  The ICD-9 code set has now been exhausted and new codes cannot be added which limits the ability to code new procedures. Treatment techniques and methods have evolved over time and not all advanced treatments can be coded using ICD-9 accurately.  In addition, new procedures are more expensive than the procedures they replace so they are not being fully reimbursed.

ICD-10-PCS can help in understanding the value of new procedures that will no longer be lumped in with the old procedures; as they often are with ICD-9.  Providers and payers can leverage the data to determine how effective such procedures are and for which populations.  This could shift when and where the procedures are performed with net benefits as a result.  For example, ineffective procedures would be done less often; effective ones would be extended to new patients.

This increased specificity of the codes will make it easier to compare reported codes with clinical documentation, check for consistency between diagnosis and procedure codes, and check for illogical combinations of diagnoses.  The use of ICD-10-CM thus may also help reduce opportunities for fraud and improve fraud detection capabilities.  Fewer gray areas in coding will make it more difficult for dishonest providers to hide behind ambiguities in code descriptions or rules.

In summary, benefits will materialize for your healthcare organization if your approach towards ICD-10 is based on collaboration and innovation and is not a pragmatic approach which focuses on just being compliant with the mandate.

Ann Chenoweth is Director of Industry Relations and Market Research with 3M Health Information Systems.