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CMS ICD-10 Coding Grace Period Comes to a Halt October 1, 2016

Written by: Nicole Zurawski on Sunday, September 11, 2016 Posted in: HME/DME, Home Infusion, Specialty Pharmacy

Navigating the Medicare Appeals ProcessSince the update from ICD-9 to ICD-10, has your business successfully made the transition to the new coding system, or are you still struggling to keep up? If it’s the latter, very little time remains!

According to CMS, October 1, 2016, will be the cutoff date for the use of unspecified or less specific codes when more specific codes are applicable. Although there had been some flexibility during the first year, the coding flexibilities will end on October 1, 2016. (1) Therefore, if your business isn’t already doing it, you will need to take a detailed look at every claim is coded accurately to reflect the clinical documentation in as much specificity as possible.  Otherwise, your claims may be denied.

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When ICD-10 was first implemented, providers were allowed some leniency and could use “a valid code from the correct diagnostic family, or ICD-10 three character category, even if a more specific code existed.” (2) As long as there was no evidence of fraud, CMS prohibited revenue contractors from denying Medicare fee-for-service claims based on specificity issues with diagnosis codes. However, CMS believes that the 12-month grace period was sufficient to allow providers to transition all of their codes and business practices so that, by now, everyone should be using the correct codes.

It is important to note that there are circumstances in which unspecified codes may be acceptable. CMS cautions that healthcare providers should “report specific diagnosis codes when they are supported by the available medical record documentation and clinical knowledge of the patient’s health condition [but], in some instances …, unspecified codes are the best choice to accurately reflect the healthcare encounter. You should code each healthcare encounter to the level of certainty known for that encounter.” (1).

So what does all of this mean for you as a provider? Hopefully by now, your business has already made the transition, so nothing should change. But if there are still uncertainties about which codes to use, here are a few helpful tips.

  1. Don’t allow yourself to become overwhelmed by the more complex and vastly increased number of codes. Instead, start with a focus on your clinical domain. Each clinician has a specialty, so become familiar with coding for those conditions or diseases. The first three characters of each code designate the category of the diagnosis. Here are a few examples of the ICD-10 chapters for the characters I am referring to:

A00-B99: Certain infectious and parasitic diseases

C00-D49: Neoplasms

D50-D89: Diseases of the blood and blood-forming organs and certain disorders involving the immune mechanism

E00-E89: Endocrine, nutritional, and metabolic diseases

While there are thousands of new codes in ICD-10, there are not thousands of new diseases. More than 1/3 of the ICD-10 codes are repeated codes, where laterality is the only difference. In reality, the greater number of codes makes it easier to find the right one. Because ICD-10 is much more specific and uses a more logical structure compared to ICD-9, it is actually easier to use.

  1. Help your staff understand the benefits of learning the ICD-10 system. Knowing the new codes will help avoid billing errors, or increases in DSO, or in delayed payments, etc. Ask your staff about any specific parts of their workflow (services, payers, etc.) that are delayed by ICD-10, so you can offer tools and training in these areas. Creating an “issues” spreadsheet, where staff can document hurdles as well as the steps taken to resolve them, is also beneficial to all.
  1. Stay informed about ICD-10. As always, CMS offers special topics through its listserv, with a specific subscription related to ICD-10 industry updates. CMS also published a helpful FAQ document. Along with the tools that CMS offers, your team should closely monitor and understand what payers are looking for. This will greatly reduce the quantity of claim resubmissions and delayed payments.

Proactively manage your documentation and billing so that your reimbursement will not suffer once the “flexibilities” come to an end. See how Mediware’s software solutions are ICD-10 compliant, and how Mediware’s reimbursement services can help lessen the burden of billing headaches with complete outsourced billing and collections services.



  1. Clarifying Questions and Answers Related to the July 6, 2015, CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities; page 8, Expiration of Medicare Flexibilities (new 08/18/2016);
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