Negotiating and resolving liens is already a complicated process. Case law and subrogation statutes are constantly changing. Federal and state governments' bureaucratic processes can be frustrating and confusing. It goes without saying that health plans and their agents are more aggressive than ever in their efforts to collect substantial sums of money from injury accident victims. You've probably been able to overcome—or at least adapt to—each of these challenges. Are you prepared for another major change on the horizon?

Starting in October, healthcare providers will be forced to switch from the current ICD-9 diagnosis code standards to the new ICD-10 codes. The new codes will affect diagnosis and inpatient procedure coding for everyone covered by HIPAA, not just those who submit Medicare or Medicaid claims. (The change will not affect CPT coding for outpatient procedures.) The transition has long been coming — it’s been beset by an extensive series of delays — but all indications are that the evolution will take place on October 1, 2015.

What's the difference between the two systems and what impact will it have on your clients and your law practice? At a glance:

ICD-9 Codes ICD-10 Codes
Approximately 13,000 codes Approximately 68,000 codes
3-5 characters in length 3-7 characters in length
First digit may be alpha (E or V) or numeric; digits 2-5 are numeric Digit 1 is alpha; digits 2 and 3 are numeric; digits 4-7 are alpha or numeric
Limited space for adding new codes Flexible for adding new codes
Lacks detail Very specific
Lacks laterality Has laterality (i.e., codes identifying right v. left)

*Source: AMA Fact Sheet 2

Targeting and eliminating medical diagnoses and treatments that are unrelated to the tort is a fundamental part of lien negotiation. This transition from ICD-9 to ICD-10 codes has the potential to have a major impact on your firm’s ability to efficiently and accurately handle lien resolution issues. Aside from there being over five times as many codes to learn and sort through as well as needing extensive familiarity with anatomy, there is uncertainty as to how medical providers are going to utilize the new coding system. Will they over-code, resulting in voluminous and overwhelming reams of medical codes to sort through and audit? Or will the specificity of the new codes make it easier to identify, isolate and eliminate items to which lienholders are asserting their rights? One thing is certain, however: accurately translating ledgers of ICD-10 codes will require a much more detailed knowledge of anatomy and medical terminology than with the ICD-9 codes. If you're not carefully and thoroughly auditing liens for unrelated charges, your clients will end up writing unnecessarily large checks to lienholders, which represents a possible E&O exposure to you and your firm.

The coding change may have the most significant impact on Medicare beneficiaries. Starting on January 1, 2016, the Center for Medicare and Medicaid Services (CMS) will require "Responsible Reporting Entities"—insurers, TPA's, self-insureds—to report to the government whether those entities have "Ongoing Responsibility for Medicals", known as ORM. This will be most relevant in Workers' Compensation cases in which injury victims are receiving payments from insurers, but may also apply to certain liability cases—especially those involving auto insurance because of the combination of med pay, PIP/no-fault, and liability exposures. Medicare will be actively tracking which charges are being paid for by primary payers and which specific ICD-10 codes correspond to those charges. When there is a "judgement, settlement, or award", those insurers will then report those cases with the Total Payment Obligation to Claimant (TPOC) along with very specific medical coding.

After a case settles, you will be asking for a final demand from Medicare in order to reimburse them for any conditional payments made from the date of injury to the date of settlement. By doing so, you are telling Medicare exactly which injuries and treatments are linked to your client's accident. If you don't audit out the unrelated charges, you are essentially telling Medicare that your client received compensation for those injuries and that Medicare, according to the Medicare Secondary Payer Act (MSP), should not have to pay for treatments related to those injuries until the entire value of the settlement is spent down. It’s clear that through all of these measures, Medicare is building increasingly robust mechanisms to enforce the "future medicals" provisions of the MSP, which states:

"Payment...may not be made...with respect to any item or service to the extent that...payment has been made or can reasonably be expected to be made under a workers' compensation plan, an automobile or liability insurance plan (including a self-insured plan) or under no fault insurance." - 42 U.S.C. §1395y(b)

It's essential to be prepared for the transition and to evaluate potential impacts on your firm in light of your current practices for handling and reviewing medical records. Organizations like the American Medical Association (AMA) and government agencies like CMS have published thorough and extensive overviews on the transition and are a great resource for familiarizing yourself with the changes.

Providio specializes in lien negotiation and is prepared for these changes. Our organization has built a robust, technology-based system for medical bill audits and it is scaled up to accommodate the new standards. Utilizing an outside expert to guide you through this transition period will maximize your clients' recoveries and reduce administrative inefficiencies. Plus, you can legally and ethically pass the cost of outsourced lien resolution services to your clients, thus saving your firm time, frustration, and money while at the same time producing a better outcome for your clients.

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