Another ICD-10 Delay

Buried in the U.S. Congress's just-passed sustainable growth rate extension patch is a little known provision that would further delay the HIPAA-mandated implementation of ICD-10. As reviewed years ago by the PHB ("Rough Seas Ahead"), ICD-10's benefit of precise medical billing accuracy was threatened by the considerable provider costs of having to retool their information systems without much impact on patient care or revenue. 

This was going to be an uphill climb under the best of circumstances.

While CMS had previously delayed the implementation of ICD-10 from 2013 to October of 2014, continued hospital and physician alarm apparently convinced a majority of U.S. Senators to delay the implementation by another year to 2015.  While many in the health care industry are undoubtedly breathing a sigh of relief, that's small comfort to others who have been diligently working hard and investing a lot of money to be in compliance with the law.

Is this democracy in action, or further evidence of Washington DC's fickle inability to be a responsible and consistent steward of the health care system?  While readers ponder that, the Population Health Blog was naturally struck by some similarities between the tragic loss of Malaysian flight 370 and the star-crossed travails of ICD-10 roll out:

Response to heartbroken families and overworked programmers?

Malaysia 370:   Sorry!               
ICD-10 Delay:  Sorry!
                        
Remains only big news only to:

Malaysia 370:  CNN viewers                
ICD-10 Delay:  Commercial insurers
                                            
One underlying problem:                   

Malaysia 370:   Transponding               
ICD-10 Delay:  Squandering         

Involving tends of thousands of:

Malaysia 370:   Square miles               
ICD-10 Delay:  Diagnosis codes

How should the public respond?

Malaysia 370:    Fly less?              
ICD-10 Delay:   Couldn't care less
                               
Who really seems to be in charge?

Malaysia 370:   Astrologers               
ICD-10 Delay: Senators
                 
Outcome?

Malaysia 370:   Flotsam         
ICD-10 Delay:  Bedlam

ICD-10: Rough Seas Ahead

Have you heard of "ICD-10?"  In addition to the many requirements of the Affordable Care Act, this may turn out to be another big headache for insurers and providers.  According to CMS' web site, under the authority granted to it under the 2003 Health Insurance Portability and Accountability Act (HIPAA), if you want to do business with Medicare or any other health insurer...

"ICD-10 codes must be used on all HIPAA transactions, including outpatient claims with dates of service, and inpatient claims with dates of discharge on and after October 1, 2013. Otherwise, your claims and other transactions may be rejected, and you will need to resubmit them with the ICD-10 codes. This could result in delays and may impact your reimbursements, so it is important to start now to prepare for the changeover to ICD-10 codes."

Which is why the DMCB paid attention to this "Report from the Field" Health Affairs article "Coding Complexity: US Health Care Gets Ready For The Coming Of ICD-10." 

The Disease Management Care Blog was reminded that "International Classification of Disease" or "ICD" is an alphanumeric billing system used to specify and describe diseases and treatments.  Originally developed in 1763, it was adopted by the World Health Organization in 1948 for use in public health reporting.  It was later used by physicians, hospitals and health insurers to specify diagnosis coding and payment levels.  For example, persons with "diabetes" may think they saw a doctor for that particular disease, but as far as their insurer goes, they were really seen for "250." 

As medical care has grown more complex, ICD has undergone periodic updates of its nomenclature, making each successive version more detailed. The ninth version (or "ICD-9") is currently in use in the United States, while most of the countries in Europe use "ICD-10."   In ICD-9, there are about 14,000 diagnosis billing codes; in ICD-10 there are 69,000.  ICD-9 has 3800 treatment procedure codes, while ICD-10 has 72,000.  As a result, if you are a health insurer, care management provider, public health advocate, government organization or a fan of Disease Management Care Blog interested in data and billing accuracy, you'd probably prefer ICD-10.

It turns out that if you're a doctor or hospital, you might hate it.

That's probably how providers are going to react on Oct 1, 2013 when the Feds start requiring ICD-10 instead of ICD-9.  That's because they'll have had to retrain the folks working in their billing offices and buy totally revamped software for a brand new coding system.  For a three physician practice, that could cost as much as $83,000. For a hospital, it'll cost millions.

As this unfolds there will be two things for DMCB readers to to watch out for:

1) Some providers are not going to be able to meet the deadline.  That means CMS and other commercial health insurers will have to decide whether to accept any ICD-9 bills and use their own information technology systems "remap" the codes into "ICD-10-speak."  If they don't, they may have to refuse payment, which could drive some physicians out of business.  There is even talk of providers and insurers setting up credit lines in case there are any disruptions in cash flow.

2) The switch from ICD-9 to 10 could lead to another round in the coding arms race.  Despite the coming advent of bundled payments, there will be plenty of fee-for service in the system. Insurers will be sorely tempted to use the greater claims detail to "downcode" anything that doesn't meet their guidelines, while providers might use ICD-10 to "upcode" and unbundle their services in attempts to shake more money from the insurers.

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.