Wednesday, December 2, 2009

ICD-10: A Win for Physicians, Care Management and the Patient Centered Medical Home

The ever virtual Disease Management Care Blog has recorded another webinar. This time it was about ICD-10 and the implications for care management. You're welcome to listen to its commentary here. Feel free to email if you want a copy of the PowerPoint presentation itself

So what did the DMCB have to say?

While the mandated future implementation to ICD-10 from the current ICD-9 coding system has been equated with 'Y2K,' the End Of Days, a planet killing asteroid or the return of certain Republicans to power in D.C., the DMCB has decided that the change will be well worth it for physicians, researchers, disease management organizations and the patient centered medical home.

Since ICD-10 has a far greater level of detail, physicians will be able to expect and demand a) better matching of payment to their work effort, b) more accurate risk adjustment in any bundled payment systems, c) increased payments under pay-for-performance reimbursement, since their performance should be more apparent to the payer and d) the payment system will have greater transparency.

Researchers will win also. Since randomized controlled clinical trials are time consuming and expensive, ICD-10 will permit better 'virtual' matching of patients in quasi-experimental studies with and without the diagnosis, treatment or intervention of interest. Armed with increasingly powerful desktop computers, more researchers will be able to plumb the claims data sets for insights that aren't possilble in the ICD-9 current claims and EHR-based systems.

Despite the huge costs of retooling their claims systems, insurers will also see some gains. Thanks to the greater 'granularity' of ICD-10 in defining the underlying drivers of cost trends, the risk associated with certain populations will be more accurately underwritten. Having actuaries who can use this information will turn out to be a competitive advantage.

However, the DMCB thinks the care management industry may end up seeing even greater benefit:
  • One key measure for assessing the change in the status of a population is the 'R squared,' which can be thought of as a mathematical measure of how much of an observed change can be accounted for by known factors. Since what is known will increase thanks to ICD-10, there will be better definition of the chronic care and disease management organizations' contractual risk corridors and an increase the accuracy of their predictive modeling.

  • Speaking of predictive modeling, the DMCB has always followed the 'sweet middle' rule of population-based care management. The trick is to not dedicate a lot of resources on the patients that have a mild burden of illness and are destined to do well, or on the patients that have catastrophic illness and are destined to not do well. ICD-10 will help find those population segments that have a moderate burden of illness and will not do well without nurse-based care management.

The Patient Centered Medical Home should do well also under ICD-10. As understood by the DMCB, Medicare is currently contemplating two payment levels for patients who are cared for in a medical home setting. Patients with a Hierarchical Condition Code (HCC, which is a method of risk adjustment) that is low will be associated with a lower monthly payment than those patients with a higher HCC. ICD-10 will hopefully force Medicare to recognize that patients and physicians deserve a better level of granularity in the reimbursement levels. There should be more levels of payment and ICD-10 may help that occur.

ICD-10? Despite the pain of transitioning to this effective Oct 1, 2013, the DMCB says bring it on. Its message for the disease management industry is to start planning for this now and do everthing you can to help your customers make it happen. It's in your - as well as your customers' and your patients' - best interest to do so.

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