As healthcare providers say “goodbye” to the month of September, they’ll have to say “hello” to more than just cooler temps and the beginning of a new season. That’s because, as of October 1, 2016, Medicare’s ICD-10 grace period is officially over. That means if providers continue to submit unspecified codes when other, more specific codes exist, Medicare will start saying “no” to paying for those claims. Feeling a bit underprepared for this change? Here’s what you need to know about Medicare ending the flexibility period (as adapted from this CMS doc):

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CMS draws a hard line.

When Medicare warned it would end its grace period on October 1, it wasn’t bluffing; there’s no extension. Why? Because “providers should already be coding to the highest level of specificity.” Now, CMS does recognize that this change may affect a lot of providers’ payments. So, to help them navigate this change, it has issued the following advice:

  1. Always select the most specific code available and ensure that your documentation supports your coding decisions—especially if you have to use an unspecified code.
  2. Keep in mind that many insurance companies didn’t implement a grace period. So, if that’s the case for the majority of your payer mix, you may not notice any changes in your payments (cue a collective sigh of relief).

Unspecified codes aren’t totally off the table.

To reiterate the guidelines I explained above, providers should always select the most specific code available and support those selections using defensible documentation. But, that doesn’t mean unspecified codes will always lead to claim denials. In fact, there are some situations in which unspecified codes are 100% acceptable or even “necessary”—such as “when sufficient clinical information is not known or available about a particular health condition to assign a more specific code.” If you’re not sure whether you should use a more specific code, check out this list of resources from CMS.

CMS is prepared for the future.

Because the initial transition to ICD-10 was successful by most measures, CMS feels prepared to handle the 2017 code changes and enforce the post-grace period rules. As the agency explains, “while this year’s update includes many new codes, the new clinical concepts are minimal.” CMS also notes that similar code updates have occurred every year throughout ICD’s history. So, updating the code set is essentially “business as usual.” From a provider perspective, however, that’s not always the case. With so many changes to consider, it’s easy for practices to get caught in the weeds as they try to account for every single code update. With that in mind, CMS recommends that providers focus only on the codes that affect their practices and the clinical concepts behind those codes.

The audit beat will go on.

If providers submit claims with unspecified codes—when other, more specific, codes are available, that is—CMS review contractors could deny their claims. And if providers continually submit inaccurate codes, it could be a red flag to Medicare—which could, in turn, lead to an audit. Thus, to avoid being audited, CMS recommends that providers “code claims to the degree of specificity supported by the encounter and the medical documentation.” For additional guidance on proper use of ICD-10, check out this CMS page.


Saying “goodbye” isn’t always easy—and for many in the healthcare community, it’ll be tough to let go of the ICD-10 coding flexibility afforded by CMS’s grace period. Are you concerned with these changes? Or were you already coding to the highest level of specificity? Let us know in the comments section below.

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