Betsy Nicoletti's Tips for Preventing and Managing ICD-10 Denials

The principles of preventing and managing denials in ICD-10 are the same as in ICD-9, but with five times as many codes and a handful of new concepts, the potential for denied claims increases. And it will take some time for medical providers and staff to be comfortable with the new ICD-10 code set, which also increases the chance for diagnosis coding errors. However, the basics of denial management are the same today as they were before the implementation of ICD-10. Practices with a sound denial management program in place will have an early warning for ICD-10 denials.

Medical practices should pay particular attention to diagnosis-related denials and for denials due to medical necessity. Look back at the reason codes related to these types of denials prior to October, and this will provide guidance in watching for denials after October.

Based on the changes and complexity of ICD-10, I would pay particular attention to certain diagnosis code chapters and certain types of CPT codes. The musculoskeletal chapter expands exponentially in ICD-10, with increased specificity for the location, types of conditions, and laterality. The biggest increase in diagnosis codes comes in the injury chapter. These codes, which begin with the letters S and T, take up half of all diagnosis codes. There is a new concept in ICD-10 of a 7^th character extender. The 7th character extender has different meanings in different chapters but is mostly used in the injury chapter. Medical practices that bill of codes in these chapters—the musculoskeletal chapter and the injury chapter—should monitor denials for those services carefully.

Reporting obstetrical services is also more complicated in ICD-10, and this is another type of service that practices should monitor for denials. Supervision of a normal pregnancy is reported with a code from the final chapter of the ICD-10 book and begins with a Z. That code changes depending on the trimester. There is an additional code to report the week of gestation. The codes used for caring for obstetrical patients with complications or conditions are also defined by trimester, in childbirth, or in the postnatal period. Although many obstetrical services are billed globally, coding for each visit is required by some Medicaid plans, and if the patient moves or changes insurance. Groups still submit claims for ultrasounds and other lab tests and these will need accurate codes based on the trimester. For some labor and delivery codes, the 7^th counter extender indicates the fetus. Medical practices that provide OB services should watch closely for denials for both routine pregnancy and caring for patients with conditions coded in the obstetrics chapter starting with the letter O.

Looking at CPT codes, practices should pay special attention to all diagnostic tests that they provide. These lab and imaging tests are in the 70000 and 80000 series of codes. These tests often require specific medical indications in order to be paid. The medicine chapter of the CPT book includes test performed by pulmonologists, cardiologists, ophthalmologists, otolaryngologist, and other specialty physicians. Many tests in this chapter have national or local coverage policies and require specific diagnosis codes to support medical necessity. Medical practices should run a report of these CPT codes to see which, if any, they perform. These will be in the 90000 series of codes (but don’t include E/M). Watch for denials carefully.

Finally a surgical practice should monitor payments and denials for their procedures. Most diagnosis codes support the medical necessity for an evaluation and management service. But procedures and diagnostic tests often require more specific codes and are paid for only a limited code range.

The reimbursement rules didn’t change from September 30, 2015 to October 1, 2015. Some diagnosis coding rules changed as described in the general guidelines at the front of the book, but most diagnosis coding rules remain the same. What changed is every single diagnosis code. Be on the lookout for denials in October that are related to diagnosis coding and medical necessity.