CMS delays ICD-10, offers new overpayment options

The Centers for Medicare and Medicaid Services heard the primary care community's complaints and have delayed ICD-10 implementation until further notice. The agency did, however, launch several new tactics in order to collect overpayments.

The U.S. Department of Health and Human Services (HHS) acknowledges that it has heard clearly the concerns and complaints of the physician community and others in the nation's health care system regarding the burdens imposed by the planned transition to the International Classification of Diseases, 10th Edition (ICD-10).

The agency will postpone the date by which mandated health care entities covered by the Health Information Portability and Accountability Act (HIPAA) must comply with ICD-10 diagnosis and procedure codes.


The clinical modification for diagnosis codes (ICD-10-CM) is the code set that will affect physicians and their health insurance claims billing. HHS has described the delay as “... part of President Obama's commitment to reducing regulatory burden.”

This will be the second delay to ICD-10 implementation. The 2008 proposed rule initially specified that the code set would become effective in October 2011. Later, the 2009 final rule adopting ICD-10 as a HIPAA standard moved the compliance date to October 2013, a delay of two years. At press time, HHS had not yet announced the new compliance date.

Meanwhile, the transition to an electronic data interchange claims platform for version 5010 should have been completed by April 1. The compliance date for that HIPAA standard was originally Jan. 1 but was eventually delayed by HHS because of technical obstacles faced by physicians, their claims clearinghouses, and their payers. Updated information on the Version 5010 and ICD-10 compliance and transition is available online.

New overpayment options

CMS, in a trend to attempt to recover overpaid monies, has recently launched several tactics:

  • immediate recoupment,
  • Recovery Audit Contractor audits on place of service coding errors, and
  • audits on hospital observation versus inpatient status.

There is also a new proposed rule on how the agency wants physicians, providers and suppliers to self-report erroneous Medicare payments.

Once an audit is underway and the contractor has determined that overpayment has been made, the physician has 41 days following the date of the initial demand letter before recoupment (recovery of the excess payment) occurs. During that 41-day period, interest on the overpayment accrues if full repayment is not made in the first 30 days.

CMS recently made a change to the recovery process. Called the “immediate recoupment option,” it allows physicians to request that the recoupment begin prior to day 41. If they do so, interest paid can be avoided entirely if the overpayment is refunded in full by day 31.

This request needs to be made in writing to the contractor and can be for a one-time recoupment of a specific, demanded sum. It can also be a permanent request related to a specific demand and all future overpayments. The physician can terminate the request at any time with another written request.

Although it offers a way to avoid paying interest on the overpayment refund, this option comes with a downside. Electing this voluntary recoupment requires that physicians waive their right to any interest that might be earned if the overpayment demand is later overturned at the administrative law judge level or at a higher level. Also, any recoupments made after a Qualified Independent Contractor (QIC) proceeding will not be considered voluntary.

Unfortunately, in terms of paperwork, CMS has not created a standard form for the immediate recoupment requests. They can be submitted through a variety of media: e-mail, fax, or postal mail. The request must contain the following information: physician's name, phone number, National Provider Identifier, physician or chief financial officer's signature, demand letter number, and the option the physician is choosing (either the one-time or permanent request). Full details are provided in a CMS article.