CMS Continues Clarification Campaign Regarding ICD-10 "grace period"


In early July, the Centers for Medicare & Medicaid Services (CMS) announced that for a period of one year, it will allow for flexibility in the claims payment, auditing and quality reporting processes as the medical community gains experience using the new ICD-10 code set.

CMS specifically clarified its statement that during the 12 months after ICD-10 implementation, contractors would not deny claims based solely on the specificity of the ICD-10 diagnosis code. However, according to the latest FAQ, claims will be rejected if they do not contain a valid ICD-10 code. CMS further defined a “valid code” as one that is coded to the maximum level of specificity. Claims will not, however, be rejected or audited simply because they contain the wrong code—as long as it is a valid code from the right family.

ICD-10 codes contain at least three characters, but sometimes as many as seven characters. The three-character "coding family" may then be further subdivided with more characters to provide additional specificity. If, for example, you submit a valid five-character code, you wouldn't be audited simply because you selected the wrong fifth character.

So, what does the CMS flexibility really mean? While coding to the correct level of specificity is the goal for all claims, claims will be processed and will not be audited as long as the first three characters are from the correct "coding family." This does not mean that you can submit claims that do not at least attempt to provide additional specificity, when required. If a submitted code is not recognized by the system as a valid ICD-10 code, it will be rejected. The physician can, in such an instance, resubmit the claims with a valid code.

CPMA had previously posted an in depth notice from billing and coding specialist Harry Goldsmith, DPM on CMS’ “ one-year grace period” titled CMS’ ICD-10 1-Year “Grace Period” for No Reimbursement Denials Due to ICD-10 Billing Errors, Has no Grace

To clarify, the ICD-10 implementation date of October 1, 2015, has not changed.

CPMA Members please log in for ICD-10 Resources