Impact of ICD-10 Conversion on Pennsylvania Workers' Compensation

The payment systems for Pennsylvania workers' compensation date back over twenty years to the summer of 1993. In July of that year, legislation was signed into law implementing sweeping changes to payments for workers' compensation medical claims. After months of review, final regulations were completed in November of 1995. These same systems and processes are still in place today, remaining largely unchanged.

The reason for the static nature of the Pennsylvania workers' compensation payment systems can be attributed to language in the law that requires all payments and payment systems to be frozen as of December 31, 1994. Rates are increased annually by the average change in the statewide weekly wage published in the Pennsylvania Bulletin. What is important to point out is that while rates are impacted, processes are not.

SunStone has received many questions about the impact of ICD-10 for Pennsylvania workers' compensation. The Bureau of Workers' Compensation ("BWC") has provided limited guidance as follows:

The Department has recently received a number of inquiries regarding the Center for Medicare Services' (CMS) upcoming implementation of ICD-10. Please note that the Pennsylvania Workers' Compensation Act's (Act) Medical Fee Schedule does not rely on ICD-9 or ICD-10 codes to determine appropriate fees for treatment. Instead, the Fee Schedule relies upon HCPCS, CPT, DRG and service/revenue codes to determine that applicable reimbursement rate. Notably, the Center For Medicare Services has reminded providers and payors that "the change to ICD-10 does not affect CPT coding for outpatient procedures and physician services. See the  Official CMS Industry Resources page. Providers and payors should refer to guidance issued by CMS to determine when the use of ICD-10 is appropriate or required.

Furthermore, while ICD-10 PCS may result in changes to providers' inpatient billing practices, inpatient acute care providers reimbursed by DRGs must continue to "cross-walk" DRGs to the Frozen Grouper, as set forth in 34 Pa. Code §§ 127.110-.116, 127.154.

Of course, implementation of ICD-10, and the additional information it is expected to provide, may also cause payors to alter the means by which they adjust and pay medical bills; however, the Department's review of such bills will continue to take place as described in the Act and regulations promulgated thereunder.

The BWC's comments are accurate in that outpatient claims will generally not be impacted by the change; however, the statement fails to address the fundamental problem associated with inpatient DRG-based claims. Workers' compensation utilizes a Frozen Grouper, as set forth in 34 Pa. Code §§ 127.110-.116, 127.154, requiring providers to "cross-walk" DRGs to that Frozen Grouper. This will require inpatient providers to dual code, i.e., ICD-9 and ICD-10, their workers' compensation claims so as to ensure proper DRG assignment back to Grouper 12.  Since the payment systems are frozen, this process must continue indefinitely.

SunStone is cognizant that maintaining a dual coding system over the long-term can be administratively complex to manage. Our team helped to implement the Pennsylvania workers' compensation law and we assist organizations bill and collect all of the revenue associated for workers' compensation services, timely and efficiently. We now complement our workers' compensation inpatient revenue cycle services with a team of coders, fully trained in both ICD-9 and ICD-10, that can help ensure you are assigning the appropriate DRG based on ICD-9 coding assignment. Let SunStone help tailor a service to fit your exact needs.

For more information, please contact Tim Mosco at