The Changing Face of Medical Necessity under ICD-10

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1 The Changing Face of Medical Necessity under ICD-0 Sponsored by 95 N. Fine Ave #04 Fresno CA Phone: (559) Fax: (559) Program Handouts Monday, June 8, 205 Track Two 3:20pm 4:20pm 205 State Convention and Exhibit Speaker Linda Corley, MBA, CRCR, CPC Copyright California Health Information Association, AHIMA Affiliate

2 California Health Information Association California Health Information Association The Changing Face of Medical Necessity Under ICD 0 June 8, 205 Linda J. Corley, MBA, CRCR, CPC Vice President of Compliance Xtend Healthcare lh Disclaimer Please keep in mind -- This material is designed and provided to communicate information about clinical documentation, coding, and compliance in an educational format and manner. The author is not providing or offering legal advice but, rather, practical and useful information and tools to achieve compliant results in the area of clinical documentation, data quality, and coding. Every reasonable effort has been taken to ensure that t the educational information provided is accurate and useful. Applying best practice solutions and achieving results will vary in each hospital/facility and clinical situation.

3 Objectives of ICD 0 Medical Necessity Discussion The transition to ICD 0 CM and PCS represents a major change not only in codes, but perhaps also in Patient Access work flow, claims processing and submission, and payor specific coverage based on medical necessity Learn why understanding medical necessity is so important Identify who within your organization will be affected by changing medical necessity guidelines Catch up on what we know so far for Mdi Medicare Discuss commercial and managed care payor contracts that may define medical necessity differently under ICD 0 Improve expectations for provider documentation to meet medical necessity requirements What s different about the U.S. and the use we will make of ICD 0 CM and PCS? Prior approval and/or pre certification of service, test, therapy, treatment plan based on diagnosis Case Mix Index and quality core measure reporting Payment! Coverage based on patient status, IP, OBS or OP Length of stay does not drive reimbursement Medically necessary diagnoses determine coverage 2

4 Just the facts... Medical necessity rules define criteria for reimbursement of reasonable and necessary items and services used to diagnose and treat illness and injury. Medicare rules for medical necessity, called Local and National Coverage Determinations (LCDs and NCDs), apply primarily to hospital outpatient services and professional physician i charges. Currently NCDs and LCDs can mean as many as 500,000+ ICD 9 and HCPCS/CPT 4 code pairs far more with ICD 0. Just the facts... Medical necessity financial $$ facts The average cost to rework a claim for ambulatory / outpatient care = $25.00 Most costly denial Revenue cycle and practice managers cite medical necessity denials as the most costly complex denial for hospitals and physicians! 3

5 Just the facts... 70% of Rev Cycle Directors said they did not know how many of their weekly claims required rework Top concerns regarding medical necessity are: -- Preventing denials in practice setting -- Registration / scheduling / ABNs prepared / signed -- Hospitals report that most medical necessity denials are due to care in the wrong setting, not unnecessary care.? What are the benefits of ICD 0 to providers? Dramatic improvement in the assignment of specific costs to chronic conditions and procedures performed ICD 0 will allow meaningful estimates to be developed regarding a disease state or a procedure cost Improve evidence based protocols / care plans Additional information in an ICD 0 diagnosis code includes severity and specific co morbidity, as well as some of the underlying reasons for the diagnosis Will provide clarity for providers and payors! Will spotlight outcomes (quality indicators) in services provided to patients! 8 4

6 Good outcomes and maybe not so good! Reimbursement will better align with needed care and projected cost (per CMS) Payers will reimburse severe and complex cases at a higher, more representative rates Less complex or simple cases at lower rates Burden on provider to document severity and accurately report patient outcomes Now you may want to crosswalk top twenty MS DRGs coded with ICD 0 to payments per CMS! MS DRG Conversion Project.html Per CMS the change in coding practices will have minimal impact on MS DRG assignment because the ICD 0 MS DRGs are a replication of the ICD 9 MS DRGs, and do not take advantage of the increased specificity of ICD 0. For 205, ICD 0 MS DRGs will function at the same level of specificity as the ICD 9 MS DRGs. When the MS DRGs are optimized to take advantage of the detail in ICD 0, there may be a substantial impact on payments. 0 5

7 However, the ICD 0 optimization of MS DRGs cannot occur until there is sufficient ICD 0 data available to allow MS DRG payment weights corresponding to the ICD 0 optimized MS DRGs to be computed. Realistically, the earliest an ICD 0 optimized version of MS DRGs can be implemented is FY208. Per CMS, this means that there will be two years of ICD 0 coded data available before an ICD 0 optimized version of the MS DRGs is implemented. Who needs ICD 0 knowledge beyond the coders PAS, PFS leaders and staff members will need job role l training i as payors may reject claims li or deny coverage based on diagnoses. All payors will have new lists of ICD 0 diagnoses that meet medical necessity (payor specific). Changes in payor claims processing requirements that may reject or deny diagnoses (i.e., number of diagnoses covered; number of digits required) Individual payor decision on non specified ICD 0 diagnoses! 2 6

8 Who needs ICD 0 knowledge... beyond the coders... PFS leaders and contracting staff members... To ensure if contracts must be re negotiated, that the payor does not narrow coverage based on diagnoses under ICD 0. To ensure payor can accept both ICD 9 and ICD 0 codes based on date of service, on claim forms post go live Specific inclusions and exclusions of diagnoses To understand how the payor will treat non specified diagnoses under ICD 0 various definitions! 3 Who needs ICD 0 knowledge... beyond the coders... Patient Care Managers (Case Management, Utilization Review, Discharge Planning and Nurse Auditors) will need to be able to carry out pre certifications and prior approvals utilizing ICD 0 diagnoses. Length of stay determinations will need to be crosswalked to MS DRGs for Medicare and DRGs for other payors. Quality reporting of core measures may need review and/or revision due to changing diagnoses under ICD

9 Who needs ICD 0 knowledge... beyond the coders... Decision support and all clinical areas using ICD 0 codes (diagnosis and inpatient procedure) for tracking, reporting, etc. Trauma registry Tumor registry treatment outcome comparisons, patient population care for specific chronic diseases (capitated payment) 5 Other areas for PFS or PAS attention to Medical Necessity? UB 04 and CMS 500 claim submissions with specific diagnosis codes Orthopedic Surgery Cardiology Neurology Denials with new reason codes ICD 0 is far more specific and allows for closer scruitiny Understand revisions to compliance checker software for ABN or waiver issuance Understand pre bill (system) and billing system (clearinghouse) edits, and payor edits 6 8

10 CMS Policies For each Medicare Laboratory National Coverage Decision (NCD), the ICD 9 CM CM codes and descriptions must be crosswalked to ICD 0 CM diagnoses. Preliminary versions of ICD 0 CM translations of Lab NCDs posted on CMS web site Still in preparation are ICD 0 CM versions for full diagnosis implementation MLN Matters MM897 ICD conversion from ICD 9 to related code infrastructure of the Medicare shared systems as they relate to CMS NCDs. 7 CMS Policies GenInfo/ICD0.html The table below (on the web site) contains the various CRs and associated documents that CMS/CAG has issued to date as part of its ICD 0 conversion activities related to NCDs and LCDs. R327CP /9/204 Screening for Hepatitis C Virus (HCV) in Adults It will be updated periodically. Currently, 36 policies have been cross walked to ICD 0 codes 8 9

11 Other Cautions! Loss of Revenue Cycle or practice staff member productivity physician orders, py payor approvals, claim rebills, denials, rejections, EOB work, medical necessity rejections / follow up corrections Loss of productivity excessive physician queries, coder slow down with new coding process (HIM) Growth in the discharged not final billed (DNFB) Solutions! Process review, revision and training! 9 EMR will play a vital role! As electronic records are built and/or reviewed for revision for ICD 0 Understand descriptive words needed for accurate ICD 0 coding Build or revise templates to request physician response (documentation) to include required specificity! Understand your patient population, clinical area of service, or physician specialty to incorporate verbiage into the documentation

12 A significant increase in the number of physician queries is expected for ICD 0. Existing coding queries will require revision to ensure different documentation is captured for specificity. Still cannot lead the physician Even more difficult under ICD 0 Consider making the query part of the permanent medical record (physician addendum) Audit individual physician documentation under ICD 9 to train for ICD 0! Track and trend for patterns for additional training 2 Best practice concurrent Inpatient coding! Immediate interaction with the provider and other caregivers on weak or incomplete documentation ti Utilize coders on the floor with the care team. Back office coding results in chasing the provider = delay in coding = delay in cash. Expand the CDI team... to include both UR needs for severity of illness and intensity of service... PLUS specificity / laterality / and other required documentation needs for coding ICD 0! 2 2

13 Summary Know your patients and your payors ICD 0 specifics Review coverage requirements for all patients and all payors Understand processes for all Revenue Cycle staff members Review, revise, train, identify problem resolution team for immediate time frame following transition to ICD 0 Prepare providers, clinical and Rev Cycle staff members Test... All systems, payors and processes 2 3 Questions/Answers Linda Corley Xtend Healthcare

14 Bibliography assn.org/go/icd transition 3

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