ICD-10 Impact on Medicare, Medicaid, Commercial Reimbursement

by Guest Blogger, Angela Carmichael, MBA, RHIA, CCS, CCS-P

Although CMS intended to remain budget neutral (or no impact on reimbursement) changes in reimbursement is inevitable when you consider the difference between ICD-9-CM and ICD-10-CM/PCS. But make no mistake, the transition to ICD-10 introduces financial risk for both providers and payers that could be favorable for one and unfavorable for the other.  Let’s take a closer look at the impact by area:

ICD-10 Impact on Medicare Reimbursement

• Goal of revenue neutrality in the short term
• No significant redistribution of payments across hospitals if claims are accurately coded
• Improve Medicare solvency in the long term
• Once sufficient  ICD-10-CM/PCS data  is available,  expect CMS to further stratify payments using MS-DRGs
• Current missed opportunities with MS-DRG’s resulting from inadequate clinical documentation and/or inaccurate ICD-9-CM coding will continue & actually increase under ICD-10-CM/PCS

ICD-10 Impact on Medicaid Reimbursement

• Expect revenue neutrality in the short term
• Some Medicaid programs are lagging behind in preparing for 5010 & ICD-10-CM/PCS
• Goal is cost savings as the Medicaid ranks are swelling due to the economy and expansion of healthcare to the uninsured via healthcare reform
• Once sufficient  ICD-10-CM/PCS data  is available,  expect state Medicaid programs to further stratify payments using whatever payment schemes they chose to utilize

ICD-10 Impact on Commercial Reimbursement

• They have experience with, and knowledge of, ICD-10-CM/PCS beyond that of the providers which creates an opportunity for them having a strategic advantage
• Mute regarding how they plan to utilize ICD-10 specificity
• May not  remain revenue neutral during the transition like Medicare