ICD-10 Will Reduce Payment Errors and Claims Denials, but Will Also Help Fraud Investigators

Payment errors should be reduced significantly under ICD-10 diagnosis and procedure codes, which must be implemented by Oct. 1, 2013. Experts say that improvements over ICD-9 — including less ambiguity, more specificity, and standardized terminology and combination codes— will help hospitals improve their compliance. But at the same time, fraud investigators may also benefit from ICD-10 when it’s deployed with electronic anti-fraud tools.

“This is a boon for compliance,” said Rita Scichilone, director of practice leadership at the American Health Information Management Assn. (AHIMA). With 35% of overpayments identified during the recovery audit contractor (RAC) pilot related to coding errors, the new system could have a huge ripple effect, Scichilone said at a June 9 audio conference sponsored by the Health Care Compliance Assn.

The effective date of ICD-10 — which includes ICD-10-CM diagnosis codes for all settings and ICD-10-PCS procedure codes for hospital inpatients — can’t come soon enough, said Sue Bowman, director of coding policy and compliance at AHIMA, who also spoke at the audio conference. ICD-9 is running out of space for codes, its terminology is obsolete and it’s unable to keep up with advances in technology, she said.

According to Bowman and Scichilone, the many benefits of ICD-10 include:

* Preventing and detecting health fraud and abuse;
* Measuring quality and effectiveness;
* Monitoring resource use; and
* Improving clinical, financial and administrative performance and systems for payment and claims processing.

“This mandate affects all facets of health care and provides the greatest opportunity for a new compliance environment,” Bowman says. Medical Billing Outsourcing