HealthOctober 19, 2016

Unspecified codes: Know your financial exposure

On October 1, 2016, the Centers for Medicare and Medicaid Services (CMS) wrapped up its one-year grace period for allowing the use of unspecified codes without consequence. The governing body also rolled out its first update to the coding system in four years, including a mammoth 6,000 new codes.

Both of these moves could negatively impact financial performance if appropriate action is not taken to minimize risk. Providers still engaging in deficient “unspecified” coding practices face short-term revenue cycle exposure in the way of denied claims, increased accounts receivable days, and time-consuming workflows associated with drafting appeals. Over the long term, revenue risk is associated with lower value-based payments.

Specificity is now the name of the game, and HIM departments must educate teams to code at the highest level under ICD-10. With thousands of new codes in play, it’s imperative that healthcare organizations address this issue through three critical steps:

1) Assess use of unspecified codes and determine financial exposure

Knowledge is power when it comes to managing risk. Healthcare organizations must first understand how unspecified codes are used and the resulting financial implications to determine next steps.

For example, consider the DRG shift for major depressive disorder. If documentation supports only the choice for an unspecified code (F32.9), the reimbursement is $3,921, as opposed to $5,723 for the more specific code F32.3, major depressive disorder, single episode, severe with psychotic features. When calculated for a US 14-site hospital system, this loss equated to a $3 million loss over a one-year period for this DRG shift alone.

Healthcare organizations can improve the outlook by educating staff on potential DRG and HCC impacts as well as negative impacts to case mix index. Also, a number of codes are now deemed inappropriate and should not be used at all. A list of these can be found here.

2) Refine CDI programs to address inappropriate use of unspecified codes

Once risks are identified, healthcare organizations can encourage movement away from specific uses of unspecified codes through education and refined clinical documentation improvement (CDI) programs. It’s important to note that education should center on inappropriate use, as unspecified codes are warranted in some cases.

Going forward, CDI teams can continue analyzing data to identify process improvement opportunities. Also, educating staff regarding current and future updates ensures that CDI efforts are focused on areas of greatest organizational impact.

For instance, some key 2017 changes in ICD-10-CM that could be considered for CDI include:

  • A92.5 – Zika Virus Disease (new code)
  • H40.11 – Primary Open-Angle Glaucoma (laterality added)
  • K05.2 – K05.3 – Aggressive Periodontitis and Chronic Periodontitis (slight, moderate, and severe added)
  • P05.0 – P05.1 – Newborn light versus small for gestational age
  • Chapter 5 – Mental Health (addition of Hoarding, OCD, and Social Pragmatic Communication Disorder)

For ICD-10-PCS, 97% of changes are associated with cardiovascular codes (3,549). Some key areas of focus include:

  • Unique device values
  • Addition of bifurcation as a qualifier
  • Additional specific body parts (specificity in upper arteries)
  • Revised code titles (changing the number of coronary artery sites to the number of vessels)
  • Perfusion is new Operation in Extracorporeal Therapies
  • New Section – New Technology

3) Manage ICD-10 changes moving forward

Solid future positioning requires readiness strategies for future updates and changes to ensure accuracy and reliability. Healthcare organizations should ask: Who is managing code updates today?

The reality is that ICD-10 updates are set to occur annually, and additional changes are possible throughout the year. While the update was very large this year, it will not be a one-time event. The ICD-10 system has many changes that need to be made before it is fully usable. Healthcare organizations need to understand not only the changes but also where the codes reside in the enterprise and how updates will be made to ensure physicians, coders, and administrators are accessing reliable information.

Health Language is partnering with hospitals and health systems across the country to improve the outlook on code management and lay a foundation of readiness going forward. Speak to an expert to learn how our Health Language consulting and implementation services, software applications, and content can optimize your financial position with ICD-10.

Learn About Clinical Interface Terminology From Health Language
Katherine (Katie) Sutton, RHIT, CCS, ICD-10 Trainer
Senior Content Consultant, Health Language

Katie supports the company’s Health Language solutions and is responsible for updating standard and proprietary content, content monitoring, and SME for coding and billing terminologies.


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