8 anti-fraud questions to ask now about ICD-10

By Julie Malida
01:28 PM
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Legend has it that there once was a boy who, on his way to school, noticed a small leak in a dike and, knowing he would be late for school, poked his finger in the hole until a passerby later saw him, went to get help, and many others who came to his aid were able to repair the dike and seal the leak. He saved the day with his forethought and self-sacrifice. What does this have to do with health care?

U.S. health plans are just like that little Dutch boy, with the coming onslaught of conversion to ICD-10 coding next year, and the fraud and misrepresentation likely to ensue from that confusing and daunting task (real or fabricated).

We have a little over a year left to seal up that leak.

While we say other countries have been on ICD-10 since 1994, the level of adoption from place to place still varies. To date, the United States has continued to use ICD-9, but that will end by mandate in October of 2014. We’ll be converting from 17,000 disease classifications to over 150,000, with significantly more specificity. But if the rest of the globe is any indicator, it is likely that the U.S. will be accepting data with a blend of ICD-9 and ICD-10 codes for years to come. This will impact providers, billers, health plans, and anyone who analyzes U.S. health care claims data, but each party is essentially left to its own devices to re-map the codes.

[See also: Will ICD-10 catalyze a last-minute IT vendor conundrum? Or not?]

ICD-10 is expected to influence billing documentation, provider contracting, payment integrity analysis, and other major business functions, as well as IT systems for trend analysis and analytics; claims and documentation in both paper and electronic form will be overhauled.

Moving to ICD-10 is intended to bring the benefits of greater coding accuracy, higher data quality for measuring service and outcomes, more efficiency, lower costs, better use of the electronic health record, and better alignment worldwide, to name a few. 

Recognize that two sweeping changes are happening:  more codes with more specificity but also totally restructured codes. Here is an example of the greater specificity:  the most common type of stroke has 11 different ICD-9 codes, but 127 different ICD-10 codes, depending on circumstances. And an instance of the new structure: unlike the 5 digit ICD-9 codes, each of the 7 digits in the new coding system has a meaning, e.g. 1st digit – section, 2nd digit – body system, 3rd digit – root operation, 4th digit – body part, etc.

It should be noted that only a small percentage of codes will map directly, and all other codes will lose information or need someone to “assume” the level of specificity originally intended. As no generally approved complete technology is available, mapping is directly related to the quality of the person doing the translation. 

Those complexities, by definition, lead to important questions healthcare organizations should be ready to tackle:

  1. How reliable is the data that is known, in order to re-map?
  2. How do you do trending and peer group analysis over time, and determine claims that are actually quality delivery of care vs. outliers worthy of scrutiny?
  3. Are there errors in the mapping, or worse yet, intentional misrepresentation of the facts, by creative billers?
  4. Will billers use a combination of ICD-9 and ICD-10 based on what might be more advantageous for their reimbursement, and say “oops” later?
  5. Will providers and plans use the ICD-10 opportunity to re-negotiate every contract provision, to the detriment of the other, thereby resulting in added administrative and medical costs?
  6. Will fraud alerts really be false positives, because of data integrity issues?
  7. Are there holes in the system (edits) that can be corrected while the mapping exercise is underway?
  8. Who is at fault for any errors:  the payer, the provider, the claims editing vendor, the clearinghouse?

Healthy skepticism will be important. Assume now that the unscrupulous will find any hole in your system and take full advantage of it.

Fraud and improper payments as an industry problem will get worse before anyone can reap the benefits of the reasons we moved to ICD-10 in the first place.

Having the foresight to plug those leaks until help arrives is not just a matter making small gestures, it is a matter of corporate and in some cases personal self-preservation.

Julie Malida is the Principal for Health Care Fraud Solutions in the Security Intelligence Practice at the SAS Institute Inc. She is a 30-year veteran of the health insurance industry and is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries.

Related articles:

Video: ICD-10 Compliance and Beyond: Completing the journey

ICD-10's long road to population health management

Podcast: Why the U.S. hasn't already moved to ICD-10

ICD-10 and the coming revenue cycle changes

Q&A: Part 2 with 3M's Richard Averill on the politics of ICD-10 timing