The AAFP says don’t buy too many just yet, here’s why:
The NUCC (National Uniform Claim Committee) has revised the old Standard CMS-1500 (version 08/05) in order to allow for the new ICD-10 codes. The new claim form, known as the 02/12 version of the CMS-1500 Form has a deadline date of April 1st, 2014 which has been ratified, published, and is consistent with CMS’s timeline. In this case “no news” is the news, being that the deadline has not been pushed out, and it is fast upon us.
“The significance of this event” says Terry Salz, industry expert on ICD-10, “is that the ICD-10 Mandate doesn’t begin on Oct 1st, 2014; that’s the deadline for electronic claims. Jan 6th represents the actual start date of the ICD-10 initiative and it begins with paper claims –the first date that the new form will be required by Medicare officially begins on April 1st, 2014 when the old (non ICD-10) claim form becomes obsolete”.
That doesn’t leave a lot of lead time for millions of healthcare providers, hoping CMS would push the date, to upgrade their software to accommodate the new dual CMS claim form.
Features of the Revised Form
The new claim form, among other changes, notably adds the following functionality:
• Indicators for differentiating between ICD-9-CM and ICD-10-CM diagnosis codes.
• Expansion of the number of possible diagnosis codes to 12.
• Qualifiers to identify the following provider roles (on item 17):
Clearinghouse experts tell us that as much as 24% of claims are submitted on paper. Many of these claims are claims to primary insurers while others are secondary claims to payers such as United Healthcare (UHC), Medicare and others.
For the vast majority of providers, unless certain exceptions are met, Medicare claims must be sent electronically. Some Medicare providers qualify for the exceptions and still send their claims to Medicare on paper.
But according to the AAPC, Medicare receives over 1.2 billion claims a year of which some 500 million are on paper –well above the industry average for paper claims. The AMA states that the typical cost to the physician practice for each claim processed manually (on paper) is $6.63 versus $2.90 to send the same claim electronically. That’s a whopping $3b per year coming directly out of doctor’s purses.
“These are the same docs that are feeling the pinch of declining payments and increased provider cost” states PracticeSuite CEO Vinod Nair. “The first place to improve is by investing in technology which has proven to reduce cost, reduce claim errors, denials, and improve efficiency.”
Every day, it gets harder for healthcare providers to collect insurance dollars. According to the AMA, a typical physician that sees 25 patients a day and processes claims manually on paper has a claim transaction cost of $70,000 per year, while the cost to submit those same claims electronically would be less than $28,000, a difference of $42,000 or nearly 60%.
The Bottom Line?
Don’t take a revenue dip or hit in cashflow come April 1st when paper claims submitted on the old HCFA form begin producing rejections. Be prepared. Look for medical billing software that can process the new claim form. Get billing staff up to speed on the new requirements, and keep your practice doors wide open.