The Most Common ICD-10 Flexibilities Questions – Answered!

What you need to know about the July 6, 2015 CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities

Q: What is the ICD-10 Ombudsman implementation date?
A: October 1, 2015

Q: Will the Guidance result in a delay in the ICD-10 implementation deadline?
A: No. All Medicare claims dated October 1, 2015 or later must contain valid ICD-10 codes in order to be approved. Medicare claims with ICD-10 codes for dates of service after September 30, 2015, or accept claims with both ICD-10 and ICD-10 codes for any dates of service will be rejected. Procedures for correcting and resubmitting rejected claims will remain the same.

Q: What are valid ICD-10 codes?
A: ICD-10-CM codes are composed of 3, 4, 5, 6 or 7 characters. Codes with three characters are the heading of a category of codes that can be further subdivided with fourth, fifth, sixth or seventh characters in order to provide greater specificity. Three-character codes are only used when they do not need to be further subdivided. While coding to the correct level of specificity is the objective for all claims, in the 12-month period following ICD-10 implementation, Medicare will process valid ICD-10 codes from the right family.

A complete list of the 2016 ICD-10-CM valid codes and code titles is available on the CMS website which you can find here.

Q: How should rejected claims be handled? Will details be provided as to whether it was rejected because it is not a valid code, or denied due to a lack of specificity for an NCD, LCD, or other claim edit?
A: Yes, submitters will be informed of the reason for rejection of the claim, and should follow existing procedures for correcting and resubmitting rejected claims.

Q: What is a family of codes?
A: “Family of codes” refers to the ICD-10 three-character category. Codes within a category are clinically related in order to account for differences in capturing specific information on the type of condition. For example, category H25 (Age-related cataract) contains specific codes to capture specific information on the type of cataract, as well as the eye involved. (Examples: H25.031 (Anterior subcapsular polar age-related cataract, right eye), which has six characters; H25.22 (Age-related cataract, morgagnian type, left eye), which has five characters; and H25.9 (Unspecified age-related cataract), which has four characters.) Most instances will require more than 3 characters in order to be valid.

Q: Does the recent Guidance mean that claims will be denied if submitted with ICD-10 codes that do not contain the maximum level of specificity?
A: In some cases, claims may be denied if the ICD-10 codes are not consistent with an applicable policy, such as the Local Coverage Determinations or National Coverage Determinations. All claims must be submitted with valid ICD-10 codes in order to be accepted and processed.

Q: Does the recent Guidance mean that NCDs and LCDs will be changed to include families of codes rather than specific codes?
A: No. Following the 12 months after ICD-10 implementation, Medicare review contractors will not deny claims billed under the Part B physician fee schedule through either automated medical review or complex medical record review based solely on the specificity of the ICD-10 diagnosis code, as long as the physician/practitioner used a valid ICD-10 code from the correct family of codes. Medicare review contractors include the Medicare Administrative Contractors, the Recovery Auditors, the Zone Program Integrity Contractors, and the Supplemental Medical Review Contractor.

The recent Guidance does not change the coding specificity required by the NCDs and LCDs. Coverage policies that currently require a specific diagnosis under ICD-10 will require a specific diagnosis under ICD-10. These policies will require no greater specificity in ICD-10 than was required in ICD-10, with the exception of laterality, which does not exist in ICD-10.

LCDs and NCDs that contain ICD-10 codes for right side, left side, or bilateral do not allow for unspecified side. The NCDs and LCDs are publicly available and can be found at

Q: Are technical component (TC) and global claims included in the CMS/AMA guidance because they are paid under the Part B physician fee schedule?
A: Yes, all services paid under the Medicare Fee-for-Service Part B physician fee schedule are covered by the same guidance.

Q: Do the ICD-10 audit and quality program flexibilities extend to Medicare Fee-for-Service prior authorization requests as well?
A: No. Audit and quality program flexibilities only pertain to post payment reviews. ICD-10 codes with the correct level of specificity are required for prepayment reviews and prior authorization requests.

Q: If a Medicare paid claim is crossed over to Medicaid for a dual-eligible beneficiary, will Medicaid be required to pay the claim?
A: State Medicaid programs are required to process submitted claims that include ICD-10 codes for services furnished on or after October 1, 2015. Claims processing verifies that the individual is eligible, the claimed service is covered, and that all administrative requirements for a Medicaid claim have been met. If these tests are met, payment will be made in accordance with the amount paid or payable by Medicare. Medicaid can deny claims based on system edits that indicate that a diagnosis code is not valid.

Q: Will ICD-10 flexibility regarding audits only apply to Medicare?
A: The official Guidance only applies to Medicare fee-for-service claims from physician or other practitioner claims billed under the Medicare Fee-for-Service Part B physician fee schedule. This Guidance does not apply to claims submitted for beneficiaries with Medicaid coverage, either primary or secondary.

Q: Will CMS permit state Medicaid agencies to issue interim payments to providers unable to submit a claim using valid, billable ICD-10 codes?
A: Federal matching funding will not be available for provider payments that are not processed through a compliant MMIS and supported by valid, billable ICD-10 codes.

Q: Will commercial payers observe the one-year period of claims payment review for ICD-10 codes that are from the appropriate family of codes?
A: The official Guidance only applies to Medicare Fee-for-Service claims from physician or other practitioner claims billed under the Medicare Fee-for-Service Part B physician fee schedule. Each commercial payer will determine whether it will offer similar audit flexibilities.
The ML Medical Billing website has a great tool which you can use to experiment with to convert ICD-10 codes to ICD-10!



For more information about ICD-10, take a look at the ICD-10 conversion tool.