The clock is ticking: One year to go for ICD-10

Have you gotten your clinicians buy-in for documentation?

Now that the Centers for Medicare & Medicaid Services (CMS) has confirmed the go-live date for ICD-10— October 1, 2015— providers must focus on making their ICD-10 readiness a top priority. The growing and dominant interest continues to be Clinical Documentation.

From a fee-for-service perspective, 98 percent of all physician fee schedules are based on CPT codes, the diagnosis code provides the medical necessity for payor adjudication (the “Why”). With that, many physicians will opt to use an “unspecified diagnosis code” to get their claims paid for (barely) qualifying as ICD-10 compliant. Let’s talk about PQRS and HCC!

According to CMS “PQRS is a reporting program that uses a combination of incentive payments and payment adjustments to promote reporting of quality information by eligible professionals (EPs).” The Physician Quality Reporting System (PQRS) has been using incentive payments, and will begin to use payment adjustments in 2015, to encourage eligible healthcare professionals (EPs) to report on specific quality measures. The program provides an incentive payment to practices with EPs who satisfactorily report data on quality measures. With the specificity in ICD-10, physician documentation will be the controlling factor for successful reporting of measurements of PQRS. The reporting of unspecified ICD-10 codes “may lead to reporting of less than best practices” accepted standard of quality care. In addition, physicians will be penalized a 1.5 percent reduction in payment in 2015, and a two percent reduction for non-reporting physicians beginning in 2016.

However, let’s not forget about the HCC scores, which are correlated to a payment model and rely solely on diagnosis codes. Risk adjustment is a method of adapting payment to medical assistance organizations using Hierarchical Condition Categories (HCCs). The Medicare risk adjustment payment system uses diagnosis codes to calculate risk premiums for Medicare Managed Care Organizations. HCC uses ambulatory diagnosis to create a valid risk adjustment methodology to help predict individual expenditure variation among Medicare patients. The key concept of HCC is to provide the correct HCC code or diagnosis for the same medical condition. For CMS, the HCC code or diagnosis determines the level of illness of the patients and the risk adjustment factor (RAF) score. In general, the higher level illness is associated with higher HCC weight for that HCC diagnosis. With the implementation of ICD-10-CM, the number of HCCs and the number of diagnosis codes will significantly increase. One of the added benefits of ICD-10 codes are the increased specificity. The better a plan does in reporting HCCs, directly correlates to the plan’s ability to offer members richer benefits and better rates and incentives to participating providers.

With the increase of specificity, it is more important than ever for physicians to provide increased documentation. This will not only ensure accurate coding for ICD-10, which will result in incentive payment for PQRS and maximize HCC scores, but most importantly, demonstrate the accepted (best practices) levels of severity of illness.


Hoffman, Sylvain & Krauss, Glenn. The of Clinical Documentation Improvement Specialist Guide to ICD-10. HCPro Inc., Danvers, MA. 2011

Physician Quality Reporting System Retrieved from



About the Author: Judy Monestime has led several ICD-10 assessment and implementation projects, including evaluating both the business and technical processes and systems for key potential impacts of ICD-10, as well confirming ICD-10 impacts by process area, such as business rules, training, work effort, business-developed tools, business-managed vendors, and impact to process work efforts. Judy has also led many seminars on ICD-10 transition and clinical documentation impact.

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