CMS grants quality penalty relief due to ICD-10 snafu

Dive Brief:

  • CMS will not apply the 2017 or 2018 penalties to eligible healthcare professionals or practice groups just for failing to meet requirements under the Physician Quality Reporting System (PQRS) in 2016, according to the agency's website.  
  • ICD-10 code sets, which are sometimes included in quality measure specifications, experienced "an extended freeze" during an update process transitioning from ICD-9, the agency stated.
  • After assessing the impact this would have on quality reporting, CMS determined it would hinder its "ability to process data reported on certain quality measures for the 4th quarter of CY 2016." 

Dive Insight:

Penalties are usually a 2% payment reduction of the Medicare physician fee schedule amount for a service. The rollout of ICD-10 had caused a lot of concern in the hospital industry as the number of diagnostic codes was being substantially increased — from approximately 13,000 with ICD-9 to about 68,000

The ICD-9 to ICD-10 transition wasn't as disruptive as it had been expected to be "because of the potential inability to process the new codes really never transpired,” Michael L. Munger, a family physician at Kansas-based Saint Luke’s Medical Group, and president-elect of the American Academy of Family Physicians (AAFP), told Healthcare Dive last year. 

The error rate for Medicare claims tracked by the AAFP stayed at 10% since ICD-9 months after ICD-10 were put to use. But the coding system is undoubtedly complex. And while some may see the penalty waiver due to the incomplete updates of the ICD-10 code sets as a relief, it also could suggest it may have been too early to declare the transition a complete success.

"CMS is saying that while considerable work was done to incorporate ICD-10 changes into the (quality) measure specifications, there are still some problems and that work is still incomplete," Sandy Pogones, a certified professional in healthcare quality and the AAFP's senior strategist for healthcare quality, told AAFP News

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Filed Under: Payer Finance