ICD-10 Arrives Early – April 1, 2014: CMS Announces New CMS-1500 Healthcare Claim Form

The U.S. Health and Human Services (HHS) Centers for Medicare and Medicaid (CMS) announced today that Medicare will begin accepting a revised CMS-1500 form (version 02/12)  on January 6, 2014.  Embedded in this is a requirement for some healthcare IT vendors to start supporting a component of the International Classification of Diseases version 10 (ICD-10) earlier than the anticipated October 1, 2014 date.

According to CMS, Starting April 1, 2014, Medicare will accept only the revised version of the form.

The revised form will give  HIPAA Covered Entities who are health care providers the ability to indicate whether they are using ICD-9 or ICD-10 diagnosis codes, which is important as the October 1, 2014, transition approaches.  The revised form also allows for additional diagnosis codes, expanding from 4 possible codes to 12.

Effectively this means that any healthcare IT system that adjudicates, submits, or reports on claims data, where this requirement applies, that was scheduled to be compliant as of October 1, 2014 with ICD-10 must actually comply with a component of the ICD-10 requirements related to claims data as early as of April 1, 2014.

Only providers who qualify for exemptions from electronic submission may submit the CMS-1500 Claim Form to Medicare.  Exempted providers include those submitting dental claims, small providers with less than 10 FTEs, non-U.S. providers, and others.   For those providers who use service vendors, CMS encourages them to check with their service vendors to determine when they will switch to the new form.  While this might sound like only a small subset of the healthcare industry is impacted, remember that these “forms” get converted back to data.  The data types, fields and supporting business rules and workflows will be impacted. Since most adjudication systems, reporting and related supporting systems are not ‘versioned’ for exempted providers, this change effectively impacts a large component of health IT vendors and those who manage internally built systems to support CMS standards.

ICD-10 promises to introduce better information to improve the quality of healthcare by providing more granular data on the condition of the patient, how the patient acquired a condition, how the patient was treated for the condition and why.  This in turn it is hoped, will improve population health management and other components of healthcare.   At the same time ICD-10 is viewed as disruptive because it requires a re-write of healthcare IT systems, processes, and substantial re-training of medical coders, billing personnel, physicians, and other clinical staff.   From a financial perspective ICD-10 introduces a new payment paradigm including opportunities for improved reimbursement and potential risks of decreased reimbursement for HIPAA Covered Entities who do not carefully examine the nuances of the ICD-9 to ICD-10 transition.

ICD-9 codes must be used for services provided before October 1, 2014, while ICD-10 codes should be used for services provided on or after October 1, 2014. ICD-10 CM must be used for all diagnosis for both inpatient and outpatient claims.  ICD-10 PCS must be used for all inpatient procedures.

HIPAA Covered Entities  and Healthcare IT vendors who are building test plans must take this into consideration as they plan for the ICD-10 transition.

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Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See https://www.noworldborders.com/news/ and https://www.noworldborders.com/clients/ for more about the company.

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