ICD-10-CM: What About the Payers?

Providers and facilities are beginning to work on ICD-10 implementation, but what about health plans? Where do they fall into place?

Most health plans have been fully immersed in ICD-10 implementation for quite some time. They have also set up Steering Committees, Education Committees, and Communication Committees, just like most of us on the provider side, but their interest lies principally on internal processes and claims adjudication. They have many business areas for which we don’t have to prepare, such as Medical Policies, Claims Adjudication, and Underwriting.

In the Medical Policies division, payers have many issues. All coverage determinations containing ICD-9-CM codes have to be evaluated and updated. Every ICD-9-CM code has to be mapped to all possible ICD-10-CM codes. Then, the determination has to be reviewed again to conclude which ICD-10-CM codes will be accepted as part of the policy. The same reviews must be performed on benefit policies that contain ICD-9-CM codes. This is a time-consuming and arduous process.

Once all the policies have been determined, they will need to be moved in to the claims adjudication area. Auto-adjudication software will need to be programmed to fit the new policies. The Denial and Appeals areas will most likely have an increase in workload. The people in these departments will need a solid knowledge of both their policies and ICD-10-CM to ensure that claims, denials, and appeals are properly adjudicated through the system.

The Underwriting and Actuarial departments will also be working heavily to prepare for ICD-10, converting current ICD-9-CM data to ICD-10-CM data to perform their underwriting function. If the payer offers individual plans (private policies), the underwriters will need to figure out how the approval and pricing structures may be affected by more exact data gathered from ICD-10-CM. When an individual fills out the application for a private policy, the data gathered on the applicant’s personal and family health history and diagnosis information is evaluated for approval and policy premium. The granularity of ICD-10-CM will make that process more involved. The general equivalence mappings (GEMs), or some other cross mapping tools, may need to be employed to enable data to be compared and evaluated.

The above examples are just a few ways in which ICD-10-CM is touching the payers. They have a heavy up-front load to bear to enable a smooth transition to ICD-10-CM. Working together with the health plans will help us all achieve a smoother transition.

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One Response to “ICD-10-CM: What About the Payers?”

  1. Steve Sisko says:

    Other major areas of impact include:

    1. Pre-existing conditions. These are usually identified by diagnosis code and existing members with pre-existing conditions will have to be updated.

    2. Other Party Liability. The existing “external cause” or “E” codes have changed so detection of externally caused conditions that are the responsibility of another payer will need to be addressed. Moreover, the classification of “body part” is associated with ICD codes and must be addressed.

    3. Assignment of risk scores or hierarchical condition categories (HCC) which are used by Medicare to reimburse payers are based on diagnosis codes.

    4. Reimbursement based on Diagnosis Related Groups (DRG).

    5. Member benefits can be based on diagnosis code and may require reconfiguration.

    For more info on how ICD-10 impacts payers, visit shimcode.blogspot.com or follow me on Twitter @ShimCode

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