D'Arcy Gue

New CMS ICD-10 Test Results: Is the Cup 87% Full or 13% Empty?

August 28, 2015

ICD-10 2 Minute Read

CMS has announced successful results of its latest ICD-10 testing week in July. However, the test achieved only an 87% claims acceptance rate, similar to rates in January and April. Consider that these results, released just 35 days before the compliance deadline,  also mean that 13% of claims were not accepted. The industry should be concerned.

CMS has concluded that “CMS systems are ready to accept ICD-10 claims,” because it experienced no new ICD-10 related issues, there were no rejects due to front-end CMS systems issues, and previous testing week issues had been resolved. Fair enough. 29,286 test claims were received and 25,646 test claims accepted from approximately 1200 provider participants, 493 of which were returning testers.

Still, why were 13% of claims — 3640 claims — rejected this late in the game? According to CMS:

  • 1.8% of rejections were due to invalid submission of ICD-10 diagnosis or procedure codes
  • 2.6% of rejections were due to invalid submission of ICD-9 diagnosis or procedure code
  • Other rejections were from non-ICD-10 related errors, including incorrect NPIs, Health Insurance Claim Numbers, or Submitter IDs; dates of service outside the range valid for testing; invalid HCPCS codes; and invalid place of service.

In other words, user error is the culprit, just as in earlier testing weeks.

The healthcare industry should be concerned. While CMS may be ready for ICD-10, the apparent readiness of providers has changed little. If, after October 1, 13% of all CMS claims are rejected for whatever reason, the industry is in for a financial shock. Worse, if providers experience a similar rejection rate from private payers, the shock will be enormous.

Adding fuel to this fire…let’s remember that the CMS test group was self-selected: it consisted of providers who believed they were ready for ICD-10. And, over a third were return testers who, one would hope, believed they had fixed the issues that caused earlier rejections.  Yet the rejection levels have changed little.

What about the potentially thousands of providers who did not volunteer for testing, at least in part because they didn’t believe they were ready to transact claims in ICD-10? We know these late-comers exist. Just look at the most recent WEDI survey.

How will providers as an industry — and individually — fare on October 1,  if “well-prepared” providers still can’t successfully process 13% of their claims with CMS?

Consider the following: If your provider organization believes it is ready for ICD-10, are there protections you can deploy to be more ready?  Or, if it is not sure it will be ready by October 1, do you have a financial risk mitigation plan in place? Beware.

You can read the full CMS report on its July ICD-10 testing week here.

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