A Whole New Code: Understanding What the ICD-10 Transition Means for Compounding Pharmacies

A Whole New Code: Understanding What the ICD-10 Transition Means for Compounding Pharmacies

i-clipboardOn Oct. 1, 2015, after years of preparation, the health care industry formally switched to a brand new International Classification of Diseases. The switch from the 9th to the 10th edition, or ICD-10, dominated the attention of health care organizations this year and was the biggest change of that magnitude in 25 years. The new code classification emphasizes specificity, using 68,000 different codes instead of only about 14,000 in ICD-9, and requiring sweeping educational, technological and systematic changes on everyone’s part—including pharmacies.

Most of the information on preparing for ICD-10 was aimed at health care providers and while many of us in the pharmacy industry understand how closely our function hews to the “provider” label, there was not an over-abundance of preparation material or understanding of what to expect for pharmacies. Pharmacies had to wait until hospitals and other providers were prepared with their ICD-10 transition for related patient data before making any changes.1

Several billing cycles into the ICD-10 transition, the jury is still out on whether the complex health care ecosystem has weathered the storm. Obviously, no calamity befell the entire industry and early reports indicate that most organizations felt prepared and that very little has changed in terms of claims and reimbursements. It’s crucial to remember, though, that everyone in the payer-provider loop is adjusting to ICD-10 and it’s still too early to say the transition is anywhere near complete.

Some anecdotal evidence exists that pharmacies experienced a few snags and slowdowns because of delays from plan sponsors and processors when pharmacies sought to obtain patient information, resulting in some patients’ prescriptions being delayed, but no huge issues have been reported. As compound or specialty pharmacy operators, it’s crucial to keep lines of communication open with your provider and payer partners and keep an eye on what changes could still be around the corner.2

Stay in Touch with the Physicians for ICD-10 Codes

Pharmacies will be one of the last links in the chain of patient data when it comes to making the switch to ICD-10, so as an operator you might expect to see lingering ICD-9 codes well into 2016. This could occur in several scenarios.

Recurring prescriptions, for instance, written before Oct. 1 may surface. These may have ICD-9 codes attached to them. Even if your pharmacy’s policy is to not fill old prescriptions past a certain time frame, it’s important to remember that if you contact a prescribing physician’s office to ask about an old or recurring prescription, the codes may not match up, as they may have switched to ICD-10 codes in their system for the same patient.

Pharmacies are also reliant on physician’s offices and providers to update patient records. Due to ICD-10’s vast increase in specificity and ability to describe patient medical conditions to a much more detailed degree than ICD-9, switching a patient’s codes from 9 to 10 will result in a potential mismatch on the pharmacy side. It’s impossible, for instance, to determine how to recode a patient who has a single associated code under ICD-9 when that single code may now be represented by a dozen more specific codes under ICD-10.

If your provider partners are only updating patient records as they return for additional treatment or receive an additional prescription—as reports indicate many providers are opting to do—you may be left with large numbers of patients in your system without updated ICD-10 codes.

Promote and Ensure Adequate Documentation for EHRs

Under the new code set, coders have a multitude of options for describing the patient’s total health. Situations that used to be painstaking and difficult to capture in ICD-9, such as describing a patient with multiple chronic comorbid conditions, becomes much faster for coders under ICD-10. After the switch, observers generally found that coders were relatively prepared and are mostly able to use ICD-10 with the intended level of detail—in fact, most of the problem children in the claims chain have been the physicians.

Coders can’t embroider health information from slim source material. The primary cause for claims rejections so far has been inadequate documentation from physicians and specialists. So how does this affect pharmacies? Both directly and via the same principal.3

Directly, oftentimes pharmacists are dealing with only one part of the patient’s treatment regimen. Inadequate documentation by another clinician somewhere along the line could jeopardize your pharmacy’s ability to receive timely reimbursements. This is a matter of communication with your provider partners, both inpatient and outpatient, especially if you’re noticing a consistent pattern of under-reporting affecting your claims. This scenario is particularly crucial for determining whether drugs with prior authorization will actually get reimbursed and this includes local coverage determination (LCD) and national coverage determination (NCD) requirements.4

In the same vein, pharmacists are clinicians in this context as well. If a pharmacist isn’t properly updating your electronic health records (EHR) before they go to the coders for billing processing, it could jeopardize your reimbursements and your payor’s ability to process. Making sure your computerized prescriber order entry (CPOE) is as streamlined as possible can make the process much easier on your pharmacists to record comprehensive clinical information as they go, especially for biologics and chemotherapy.

What’s Next for the ICD-10 Transition?

The Centers for Medicare and Medicaid Services is currently in the midst of a negotiated “grace period,” during which they agreed, among other provisions, to not reject Medicare claims solely based on lack of specificity in the ICD-10 diagnosis codes provided. As long as the codes are from the correct ICD-10 “family” of codes, the claim will go through.

Many private payers followed suit, albeit much less formally, which has resulted in a much lower than expected claims rejection rate after a few cycles under ICD-10. The CMS grace period comes to an official close on Oct. 1, 2016, however, and many industry watchers expect private payers to begin tightening scrutiny of codes and claims processes well before that date, potentially throwing a wrench in the works. For providers under the impression that all has been smooth sailing, it could be that the real disruption from ICD-10 actually comes well after its official start date, when payers actually begin enforcing the new codes. All of these potential disruptions would be felt at pharmacies as well.5

As a pharmacy operator, you have a lot to consider. Quality assurance, supply chain, compliance and other operational matters certainly won’t go away while you evaluate your processes for an ICD-10 world, but it’s best to discover any weaknesses in your system now before payers get strict sometime in 2016. Take another look at any processes related to your revenue cycle. Teach your staff the renewed importance of quality documentation and properly using your electronic systems. And if provider partners are the ones holding you up with improper documentation or delays with patient information, communicate with them clearly and offer mutually beneficial solutions.

The changes from ICD-10 haven’t finished coming, and ICD-10 is guaranteed to still be a story well into 2016. Stay vigilant and prepared, and don’t let the transition get in the way of your pharmacy providing the best possible patient care.

Pharmaceutica North America is a leading provider of high-quality compounding kits and active pharmaceutical ingredients for compounding pharmacies and other health care organizations. Contact us to learn more about our products.

Show 5 footnotes

  1. Countdown Nears for Launch of ICD-10,” December 2008, http://www.managedcaremag.com/archives/0812/0812.icd10.html
  2. “2015 Year in Review,” Dec. 21, 2015, http://www.chicagobusiness.com/article/20151221/NEWS03/151229966/2015-year-in-review-high-drug-prices-emerge-as-top-issue
  3. “A Walk Through ICD-10,” June 2014, http://www.pharmacypracticenews.com/ViewArticle.aspx?d=Policy&d_id=51&i=June+2014&i_id=1067&a_id=27553
  4. “Issues and Complexities Leading Pharmacy Into 2016,” December 2015, http://www.pharmacypracticenews.com/ViewArticle.aspx?d=Policy&d_id=51&i=December+2015&i_id=1273&a_id=34507
  5. “CMS Announces 1-Year “Grace Period” for ICD-10 Implementation,” June 6, 2015, http://www.ascrs.org/node/22774
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