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How Improper ICD-10 Coding will Affect Medicare Reimbursements?

October 29, 2015

ICD_10_incorrect_coding-1Following the switch to ICD-10, many physicians and eligible professionals (EPs), such as nurse practitioners, clinicians, and laboratory technologists, may have concerns over how medical coding errors will affect reimbursements and penalties. Due to the extensive listing of codes and the addition of new families of codes, as found within the ICD-10-CM Official Guidelines for Coding and Reporting, medical billing and coding professionals will face increased scrutiny within appropriate coding techniques. By understanding how incorrect coding affects your practice, you can minimize your losses and impact on your reputation.Denial of Reimbursement Payments

Proper medical codes allow the Centers for Medicare and Medicaid Services (CMS) to determine an appropriate payout for health care providers, eligible hospitals, and eligible professionals. However, incorrect encoding at your practice results in incomplete or inaccurate claims to CMS. As a result, the CMS may refuse to remit reimbursement payment for completed services. As explained by the CMS, your practice will still need to comply with the following clinical quality measures (CQMs):

  • The outcome of treatment.
  • Clinical processes as part of treatment.
  • Patient safety and any possible violations of a safe environment.
  • Efficient use of resources.
  • Coordination of care between different health care settings and providers.
  • Patient involvement in treatment.
  • Adherence to official guidelines for coding.
  • Improved public health in your region or area.

Requesting a Review of Medical Quality Reporting Coding Errors

When requesting a traditional, informal review request, Medicare may deny the request if incorrect codes have been routinely used in a practice. For the 2015 program year, no penalties are assessed, according to the CMS, “as long as the physician/EP used a code from the correct family of codes.” As a result, your practice may be denied an informal review request if you use an incorrect code from an inappropriate family of codes. Yet, this is not a free-pass to assume no penalties will be assessed if you are aware of incorrect coding in your practice.

5 Signs Your Practice Is Not ICD-10 Ready

Incorrect ICD-10 Code and Denials

Due to potential issues with the release and reporting of ICD-10 codes, Medicare review contractors will not deny any claims if the only problem is an incorrect code from the same family of codes. However, this grace period will only last for 12 months after the ICD-10 implementation date, i.e. until September 30, 2016.

If you attempt to file an ICD-9 code that no longer exists or was altered to a new format within the ICD-10 guidelines, the claim is invalid.

Advance Payments for Delays in Reimbursement Payments by CMS

CMS officials understand the transition to ICD-10 will inherently cause delays in claims processing, reviews of claims, and payment processing. To ensure physicians and EPs have all necessary resources to continue operation, EPs may request an advance payment to their Medicare Administrative Contractor (MAC).

This type of advance is only provided if Part B Medicare Contractors are unable to approve claims and remit payment within time limits due to CMS problems in administration. The advance is a partial payment and subject to repayment if your claim is found to contain errors, fraudulent billing practices, or other problems. Furthermore, CMS will not issue advance payments to physicians if the physician does not have the appropriate documentation to submit a valid claim regardless of administrative errors or input.

Medicare reimbursements take any possible penalties into account. However, 2015 program claims have an added benefit of not being assessed penalties due to same-family, incorrect codes. The goal of ICD-10 seeks to instill strong, efficient processes in medical billing and coding, but you must beware of how incorrectly-assigned codes will affect Medicare reimbursements.

If your medical coding and billing team needs help during ICD-10 implementation, M-Scribe provides resource for ensuring accurate coding in your practice. Call us at 888-727-4234 or by email at for a risk-free consultation of how we can help your practice maintain compliance and receive reimbursements from Medicare in a timely manner.


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