ICD-10 Myths: Should healthcare providers count on 'reimbursement neutrality?'

Carl Natale
by Carl Natale

Since there is a lot to get straight when it comes to ICD-10, it is expected to find a lot of resources designed to get medical professionals up to speed.

That was the goal of last month's HIMSS Virtual Briefing on "Understanding the Past to Excel in the Future:  Critical Factors for Success."

But it wasn't all predictable. Joe Miller, director of E-Business at AmeriHealth Mercy Family of Companies, finished the presentations with his take on ICD-10 myths that need to be busted.

'Clearinghouses will help providers comply with ICD-10'

They're helping with HIPAA 5010 - which Miller considers a change in the format that data is transferred. Providers have to submit ICD-10 data on Oct. 1, 2013.

"No clearinghouse is going to go out there and crosswalk that data," said Miller. "Your system must be upgraded or replaced to be ICD-10 compliant."

'Payers will use different crosswalks from ICD-9 to ICD-10'

Actually payers aren't expected to use crosswalks, according to Miller. "I don't know of any today, payers, who will be using a crosswalk."

Miller says he doesn't expect many payers to convert an ICD-10 code to ICD-9 code  to decide if they will pay a claim. "Payers may use a crosswalk for analytical purposes - to analyze information after a claim is paid," he said.

'More claims will require medical necessity review with ICD-10'

"The specificity of the ICD10 codes will actually, probably, reduce the amount of medical necessity review in the future," Miller said. "If coded properly when the claim comes in, and linked to a proper diagnosis code the adjudication system of the payer is more likely to be able to resolve and determine if the claim should be paid."

So tell me if I'm wrong. But I read that to mean payers will be able to make more definitive decisions on whether to pay or not. Does that mean that payers can deny more claims?

'Payers will deny more claims with ICD-10'

Maybe not.

"Payers are very concerned with business continuity and continuing to pay claims," Miller said. They're really not looking for excuses to deny claims because it's inefficient.

Payers have their autoajudication rate. "The percent of claims that come in that are fully adjudicated by their core claims systems without being touched in any way by a person," said Miller

"The autoadjudication rate is a more efficient way of processing the claim," said Miller. Apparently payers want the rate to stay high. That means they are paying claims very efficiently.  Miller said payers want to ensure that flow of claims keeps going.  Providers shouldn't be worried by higher (intentional) denial rates.

Except that it is very likely that payers will deny more claims because they are improperly coded. Which isn't the payers' fault. Remember they're just trying to  be efficient.

At first.

"At some later point, some payers may add some edits for ICD-10 around unspecified codes and that," said Miller.


Is there any chance "unspecified codes" and "that" will end up with more denied claims? Or will those factors show up during contract renogiations?

'Providers will receive lower reimbursements under ICD-10'

Again, maybe not.

Miller said that payers are looking for "reimbursement neutrality." That meant that overall, payers are looking to pay the same amount. Some claim reimbursements will increase but be offset by decreases in other reimbursements.

Which sets up Miller's next myth.

'Payers adopting 'reimbursement neutrality' will treat providers equally'

Not all providers will be treated "neutrally." There will be winners, and there will be losers.

"An individual provider may see variations in their reimbursements because of case mix," said Miller. So providers have a challenge to keep from being on the lower side of neutrality.

Neutrality isn't everything

This isn't exactly a myth but my take on the neutrality issue. It goes back to my conversation with Pradep Nair, senior vice president and head of the Healthcare Practice at HCL Technologies, about the challenges that payers face.

He told me that payers were looking to maintain "reimbursement neutrality," not deny more claims or reduce reimbursements. Their big concern was avoiding "overpayments."

He didn't get a chance to explain the definition of overpayment. But it's not going to mean more money for providers.

 Consider everything Miller has said about payers wanting continuity in the claims process. And take him at his word that payers will not look to reduce reimbursements in the claims process. But that doesn't mean that post Oct. 1, 2013, contracts between payers and providers won't target the reimbursement totals.

Call it reducing overpayments or reimbursements, keeping revenue consistent will be a challenge.