Fighting Back Against Increased Claim Rejections Under ICD-10

The Dark Report recently reported that the implementation of ICD-10 diagnosis codes in 2015 has resulted in disrupted laboratory test billing and collections, rejected claims, and increased demands for medical-necessity documentation.

Lab billing experts, including Kyle Fetter, Executive Vice President and General Manager of Diagnostic Services for XiFin, said that alongside the new codes, payors are requiring more data to support the test claims, which is impacting reimbursement. Even more alarming, at least one payor—Humana—is sometimes applying new criteria retroactively to previously-paid claims and then seeking recoupment if there is a disconnect.

ICD-10 provides more clinical data on each patient’s diagnosis to help the healthcare chain to deliver better quality care. But as Fetter explained to The Dark Report, “armed with more data on patients’ disease states, health insurers have required clinical laboratories to provide more information on the tests physicians prescribe.” Fetter added, “many times, those requests for more information lead to demands for more data on medical necessity or to payment denials, or both.”

Particularly troubling is the trend of insurers using retrospective requests to see if underlying clinical information supports clinical indications for coverage. Explained Fetter, “If the physician submits that information, it may show that the patient didn’t qualify for the test. In many cases, this is more of an issue with how the physician documented the test order, rather than the patient not meeting the criteria for coverage.” Either way, or if the physician failed to provide the documentation, the insurer will seek recoupment.

Fetter also told The Dark Report that health insurers have denied coverage by about 20% for lab testing under ICD-10, even though they paid for those tests under ICD-9 codes.

• Physicians don’t follow the test-ordering guidelines published by health plans and Medicare.
• Supporting documentation, particular patient medical records, are often not provided by physicians, leaving laboratories at risk of claim denial.
• Major health insurers continue to narrow their coverage of a growing number of lab tests, including routine clinical laboratory testing, many molecular tests, and some infectious disease test.

Fetter said that clinical laboratories facing increased claim rejections should monitor payments and denials closely and provide as much information to support medical necessity for testing as possible. Labs should carefully assess their reserve rates, paying particular attention to how much exposure they have for the payors that have been most active in this regard. See the rest of Fetter’s discussion with The Dark Report here.

XiFin RPM not only helps ensure claims are submitted with proper supporting documentation but also enables the laboratory to track and monitor payor reimbursement behavior. Learn more about the importance of such capabilities in the XiFin white paper, The Executive’s Guide to Measuring Total Cost of Billing in the Laboratory.

Read Now