The Delay of ICD-10 in Workers’ Compensation & Auto Casualty

By Michele Hibbert-Iacobacci | June 30, 2014

The International Classification of Diseases – 10th Revision, Clinical Modification and Procedural Coding Systems (ICD-10-CM/PCS) will be implemented on Oct. 1, 2015. This new implementation date was initiated by a bill passed by the Senate on March 31, 2014.

H.R. 4302, Protecting Access to Medicare Act of 2014, is also called the “doc fix bill” related to the Medicare sustainable growth rate (SGR). The Oct. 1, 2015, implementation date announced by the Center for Medicare/Medicaid (CMS) in a forthcoming interim rule is one year after the date the healthcare industry was preparing to implement the new code set for standardization across the United States.

ICD-10 is an international classification system. The United States is the only civilized country not using this classification, making comparisons to the global healthcare community consistently difficult.

New Implementation Date

The United States is the only civilized country not using the ICD-10 classification system.

How will this new implementation date affect workers’ compensation and auto casualty industry to include payers and providers?

There are many commonalities between these two industries in using ICD-10, as both are non-covered entities under the Health Insurance Portability and Accountability Act (HIPAA). HIPAA is the law that required among other standardizations, the use of ICD-10 in the United States. Non-covered entities were not required to use HIPAA standards like ICD-10 but have been voluntarily, and in some cases by state legislation, making the transitions. After all, the providers are “covered” entities under HIPAA and it would have been inconsistent to require two classification systems to be used.

The intent is to use updated language to communicate information about the patient to achieve greater quality of care. Regardless of the payment system, the patient’s care should be documented consistently.

Workers’ compensation and auto casualty were ready to implement ICD-10 by Oct. 1, 2014, just like covered entities. The dependencies on how bills would be presented for payment was always at question even before the delay, because many of the providers in workers’ compensation and auto casualty were not exposed to the communications from CMS as were the providers in health.

The initial expectations by workers’ compensation and auto casualty covered every possibility including:

  • ICD-10 codes being submitted before the effective date of Oct. 1, 2014;
  • ICD-9 codes being submitted well after Oct. 1, 2014;
  • Mixed codes (ICD-9 and 10 on the same bill) in auto casualty.

In addition to the above scenarios, now we will need to consider that a larger quantity of providers may submit ICD-10 on Oct. 1, 2014, and not know about the delayed implementation until 2015. Fortunately most vendors, contractors and payment systems have been programmed to make changes to the effective dates due to the past delays.

There are many commonalities between workers’ comp and auto casualty as non-covered entities but there are also specific areas that each of these industries needs to consider for the delay.

Auto Casualty

Few states have provided guidance in the use of ICD-10 to auto casualty payers. When in doubt, or without guidance, the auto casualty industry usually defaults to the federal standards for payment in first party. In states where the Medicare fee schedule (i.e., Pennsylvania, Florida) is adopted for payments in no-fault (NF)/personal injury protection (PIP), it would be imperative for the auto casualty payer to be ready with ICD-10 in order to use the inpatient fee schedules (Diagnostic Related Groups – DRGs). Due to the fact that CMS needs to change their plan, auto casualty will utilize ICD-9 as published by CMS until the effective date of ICD-10.

Auto casualty deals with third party and it was our expectation that we would continue to see ICD-9 for a long period of time after the effective date of ICD-10. There is no requirement to present actual billing statements from providers as part of a third party demand and often the bills are composites in letter, itemizations by attorneys and subrogation detail. We anticipated translating these bills into ICD-10 formats moving forward as part of the review process.

Workers’ Compensation

The workers’ comp industry will likely have a higher impact than auto casualty due to the readiness of many states in adopting statutes through legislation for the implementation of ICD-10. Now, the states need to revisit the delays and potentially involve legislative updates. One of the largest impact areas will be to revisit the reporting requirements by the states and what is included.

The delay to 2015 will also delay programs in workers’ comp that were instituted to monitor the new code set and the anticipated benefits of tracking risks to injured employees. Monitoring in states for improved financial and administrative performance due to the added descriptions and codes that benefit the review of claims will need to be put on the back burner until Oct. 1, 2015.

Potential Impact

Anticipating that providers will likely react by submitting ICD-10 codes to payers before the implementation date of Oct. 1, 2015, both auto casualty and workers’ comp payers need to have a plan.

Payers will need to make decisions on how they will handle these claims if rules are not changed at the state level. It is likely the federal rules will be used. Some payers may decide to turn these claims back to providers, while others will translate to ICD-9 for payment.

Many aspects are positive for workers’ compand auto casualty. Additional time for testing, communicating to providers and education (external/internal) enhances the readiness for the new date.

The unanticipated cost of maintaining additional staff of testers, educators and coders for a longer period of time was likely not accounted for in most budgets. Retraining staff also may be an added expense because without real-time use of the code sets it is likely staff will forget the concepts.

About Michele Hibbert-Iacobacci

Hibbert-Iacobacci is vice president for Mitchell Information Management & Support.

Was this article valuable?

Here are more articles you may enjoy.

From This Issue

Insurance Journal West

Insurance Journal Magazine