Dual Coding & ICD-10 Transition

ICD-10 implementation is looming, and the industry is scrambling to prepare for the transition. Our post in May gives a broad overview of ICD-10 and how to prepare, but let’s talk now more specifically about “Dual Coding.”

ICD-10 Chalk


What is “Dual Coding?”

Dual Coding is the term that describes claims that have both ICD-9 and ICD-10 diagnosis codes. When a major change occurs, there is usually some leeway in the first few months that would allow for this type of claim to squeak through. This gives time for all players to get acclimated to the new requirements and how to implement them. Dual Coding has been a hot topic of sorts in our industry, with many wondering if it would be allowed.  With this release from Medicare, that question has been largely answered with a resounding “NO.” All claims after October 1, 2014 will be denied if they contain ICD-9 diagnosis codes. Private insurers are sure to follow suit.

What Can You Do?

Prepare! Medicare shows no indication of delaying the transition, and is pushing for quick and relatively painless transition. Rather than allowing for acclimation in the first few months, your practice will need to be prepared PRIOR to the transition date. October 1, 2014 may seem like a long way off, but this transition will require a complete overhaul of many office processes. Do not let your practice’s cash flow be affected by needless denials!

Have You Heard? We’ve Gone Paperless!

One of the most frequent questions asked by prospective clients is, “How do you receive the charges?” HIPAA compliance is always on the forefront of everyone’s mind, and third-party medical billing requires transmission of protected health information. Email does not meet HIPAA security standards, so the most common method of charge transmissions were fax and courier service.

Seeking to create a more convenient means of transmission for our clients, In Charge Office Solutions has launched a new program this week. We have developed a software program exclusively for our clients that makes uploading charges to our server quick, easy, and secure.

How Does it Work?  keyboard

Clients simply:

  •  Scan their own superbill or use our fillable PDF
  •  Drop the file into a specified folder and double click on the “In Charge Office” icon.
  • The program pulls all files from the folder, encrypts the information, and uploads them directly to our server.

Clients receive immediate confirmation that their files have been received for posting/billing. The program and our server exceed HIPAA privacy and security standards.

Our hope is that this program increases efficiency, cuts down on paper usage, and gives peace of mind that your information is secure.

Sequestration: Have you Felt the Effects?

What does sequestration mean for you and your practice? Most significantly, this means a 2% reduction in Medicare reimbursement for all services provided on or after April 1, 2013. This means that instead of Medicare payment at 80% of the allowed amount, they pay at 78% of the allowed amount. The patient is still responsible for 20%, and the provider of service has to adjust the 2%.

What Does This Look Like?

Prior to
Allowed Amount $161.61 $161.61
Medicare Payment $129.29 $126.70
Patient Payment $32.32 $32.32
Provider Paid $161.61 $159.02


The difference of $2.59 is not reimbursable by supplemental insurance, and the patient may not be billed for it. This is a “contractual obligation” and is shown on your Remittance Advices from Medicare with adjustment code “CO-223.”

What Does this Mean?

Declining revenue for Medicare providers will affect not only the provider, but their employees and patients as well. Reduction in Medicare fee schedule has become standard, however the additional 2% reduction on top of the usual reductions will become unsustainable for many providers.

The American Medical Association is projecting a loss of up to 766,000 jobs in the healthcare industry due to sequestration, (source: AMA: Sequestration Cuts Cause Real Pain for Medicare Patients, Physicians) and there is no near end in sight to the 2% fee schedule reduction.  Due to the further decline in fee schedule, it is more important than ever to ensure each claim is billed accurately for the highest reimbursement allowable, to keep on top of Accounts Receivable, and to keep communication open with patients on any out-of-pocket expenses.

ICD-10 Transition – Coming Up!

The United States is one of the last developed countries that still uses ICD-9 for diagnosis coding. ICD-10 has actually been around since 1994, and has been used in Australia, Canada, and many countries in Europe since the early 2000s.  Advances in diagnostic technology allows for more specificity, and ICD-10 offers a way to report to that level. Some main differences are:

  • Available codes jump from 13,000 with ICD-9 to 68,000 with ICD-10.
  • ICD-9 codes are mainly numeric (unless a “V” or an “E” code) and are 3-5 characters in length. ICD-10 are alpha-numberic, and 3-7 characters.
  • The additional characters in ICD-10 format specify the etiology, the anatomic site, and severity.

When new healthcare regulations and are set to roll out, the industry knows the deadline will likely be pushed back (sometimes multiple times). It is looking more certain that ICD-10 transition will be the exception to that rule, and October 1, 2014 will be the implementation date.

Will You Be Ready?

CMS has released suggested timelines , but each practice should really tailor their transition plan to fit their needs. Healthcare claims billing and reimbursement is a true collaboration between many players.  Here are a few of those players and how things may change due to ICD-10:

  • Clearinghouse and Software: Software programs will need to be updated to recognize and accept the new codesets, and your clearinghouse will also need to update their edits. Your clearinghouse should also be keeping you updated on payer readiness as it gets closer to implementation. In Charge Office Solutions takes care of this for their clients.
  • Office Staff: All office documentation that currently uses ICD-9 codes will need to be updated to accommodate for the new codeset. This may include superbills, lab orders,etc.
  • Healthcare Providers: Because each diagnosis must be coded to the highest level of specificity, Providers will need to become familiar with the level expected and document their encounters accordingly.
    EX:  Open wound of left cheek:
    ICD-9 “873.51” which specifies open wound of cheek, complicated.
    ICD-10  “S01.402A” specifies the first encounter for an open wound of left cheek and temporomandibular area.

In Charge Office Solutions will be working with each client to help ease the transition for their practice, and make it as seamless as possible. Rather than a burden, ICD-10 is a means to advance the accuracy of claims reporting and documentation.

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Patient Billing: A Fine Line

The cost of healthcare for the patient is rising, yet reimbursement for medical professionals is declining. The growth of high-deductible/high coinsurance plans leaves the patient responsible for more and more of their care, even when insured. It is no surprise that medical bills are the biggest cause of US bankruptcies, with many people unable to pay thousands of dollars for an unexpected illness or injury.

If a patient is surprised when they see their bill in the mail, feeling uninformed and overwhelmed by the amount makes it less likely they will pay their portion. Many offices try to mitigate this by adjusting the balance, but this only leads to decreased revenue and essentially, services provided that do not cover the cost of practicing. The converse of this is hard-line collections, and in the medical community, doctor/patient relationship suffers.

Because of this trend, patients are rightfully inquiring what their out-of-pocket expense will be prior to a procedure or service. This information is often difficult and time consuming for a medical office to predict, as it depends on an individual’s specific insurance plan and benefits.

When an office contracts with In Charge Office Solutions, we estimate patient out-of-pocket expense for procedures at the time we confirm their benefit for it. Our clients are then given a “Procedure Authorization and Payment Estimate” form detailing:

  • The patient’s covered benefit.
  • Authorization number, should one be required.
  • The contracted fee schedule amount for the procedure.
  • Estimate of what the insurance plan with pay and what the patient’s responsibility will be, based on the patient’s available benefit information.

A well informed patient PRIOR to the procedure allows for pre-payment, or payment arrangement discussion to begin.