Automobile Insurance & the Use of ICD 10 Codes. April 17, 2012 Baltimore, MD

Transcription

1 Automobile Insurance & the Use of ICD 10 Codes April 17, 2012 Baltimore, MD

2 American Insurance Association, Washington, DC The American Insurance Association (AIA) is the leading property-casualty(p/c) insurance trade organization, representing approximately 300 insurers that write more than $100 billion in premiums each year. AIA member companies offer all types of p/c insurance, including personal and commercial auto and property insurance, workers' compensation, medical malpractice coverage, and liability insurance.

3 AIA While p/c insurance was intended to be a state-by-state system, ever increasing federal initiatives continue to raise issues for carriers. Having a staff based in Washington, D.C., the AIA is especially well positioned to tackle any federal issues facing insurers and deal with government agencies.

4 Summary The passage of the MMSEA Section 111 reporting requirements in late 2007 set up a reporting system for the p/c industry to collect and report claims data to Medicare (CMS). At that time, the p/c industry was required to begin to report claims information to Medicare (CMS) so they might identify primary payers under the Medicare Secondary Reporting Act. ICD- 9 & ICD- 10 codes are part of the 170+ fields in the record layout. We are the recipients, not the creators of the correct determination of an ICD-9 or ICD-10 code.

5 P/C Claims For p/c insurers a single bill from a provider does not constitute a claim. A claim is the collection of all bills arising from the same event and a p/c claim may involve multiple parties from a single incident, therefore the claims files can be quite large. The p/c industry processes over 40 million injury claims a year. The exact number is unknown since no single database exists

6 History of the use of ICD- 9 codes The p/c insurance industry never captured ICD-9 codes except in some medical bill re-pricing systems used in workers compensation and no-fault insurance by the largest carriers. These codes were not relevant to the industry s claim process. Therefore the basic p/c claim systems record layouts were never designed to capture ICD-9 codes, let alone ICD-10 codes or multiple codes.

7 Reporting of ICD 9 Codes P/C industry only began reporting for workers compensation and claims under CMS no-fault definition as of January 1, We are finding that most of the reporting errors are stemming from the rejection of files for incorrect ICD-9 codes. However, when checking on these errors we have found that the ICD-9 code submitted is what was received from the vendor of the service or the bill re-pricing system, but is rejected by CMS. The collection of ICD-10 codes for reporting purposes is only as good as the data received.

8 Personal Lines Automobile Insurance The personal lines automobile insurance market in the United States is a $100 billion dollar line of business. Therefore if a company can increase its market share by 1 % it represents a gain of $100 million dollars of income. It is dominated by the top eight companies that write 66 % of the business.

9 State Run System Each state has its own regulatory scheme, statutory law, and common law, determining what can be sold for how much, by who and how the claims are handled.

10 Typical Automobile Policies The policies have various coverages. Those that apply to injuries are medical payments, no-fault benefits, uninsured/underinsured motorist and bodily injury. Each coverage applies to a loss or claim differently. An automobile policy is a contract that insurers and those covered by it must adhere to. A first party to the contract is an insured a third party is a beneficiary of the contract. Insurers have little if any control over a third party.

11 Coverages & Bills Medical Payments, No-Fault, and Uninsured/Underinsured Coverage: The individual making the claim may or may not be an insured. Bodily Injury Coverage: The individual will not be an insured and will often have legal representation. The p/c insurance industry receives various type of bills from service providers. We can only hold the provider to reasonable and customary charges, our contracts provide nothing else. Typically we pay the insured or their representative not the providers. In No-Fault lines we might also pay for loss of wages or other benefits.

12 Bodily Injury Claims & ICD - 10 Bodily injury claims are adversarial at times and injury information might consist only of medical reports, hospital records and deposition testimony. All of this gets us to ICD- 10 Codes. What is the P/C Industry Doing relative to ICD 10 Codes? Waiting!

13 How will we determine which ICD 10 code to report? Search bills received and attempt to find one most related to the injury for which the p/c insurer is paying. Medical bill re-pricing systems in certain areas might give us the code. Guess the most appropriate code from the medical reports, hospital records and testimony provided.

14 Other Issues Beneficiaries are losing their Medicare benefits for services unrelated to the automobile accidents now that the p/c industry is reporting the claims to CMS. Insurers will need to crosswalk ICD-9 codes to ICD- 10 codes to close out a record sometime in the future.

15 Worse Yet! The p/c insurers and self insureds are subject to a $1000 dollar a day fine per claim should they incorrectly report under the law. Yet they only submit files containing the reports once a quarter, thereby setting us up for significant penalties. Try to explain that to a CEO!

16 Questions & Contact Information Peter R. Foley Vice President, Claims Administration American Insurance Association 2101 L. Street N.W., Suite 400 Washington, D.C