The Next Challenge to Private Small Practices!!

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Last week I discussed the difficulties of rural medicine and the solo practitioner. Unfortunately it is only going to get worse in the future. Consider that in less than 90 days, essentially all health care providers will be faced with the unfunded mandate of transitioning to what is called ICD-10 (International Statistical Classification of Diseases and Related Health Problems).

This is the latest and exponentially more complex version of the International Classification of Disease coding system, which we have used for insurance reimbursement (to get paid) for decades.There is abundant evidence to suggest that the transition comes with a significant financial and administrative burden that will disproportionately impact smaller medical practices as well as hospital emergency departments.The recent announcement that the Centers for Medicare and Medicaid Services (CMS) will ease regulations and will not penalize providers for coding errors is, in one sense a welcome gesture. It shows that the administration recognizes that, for a number of providers, the transition is not likely to be smooth. The announcement states that CMS will not deny billing claims if the claims are at least partially correct. CMS will also partner with the American Medical Association to help practices prepare for the transition.However, a number of practices do not yet even have the necessary IT infrastructure in place. These additional efforts, although well intentioned, are unlikely to help those practices.

If practices are not ready, they don’t just face a 1.5 percent fee cut, they simply won’t get paid or there will likely be a significant delay in getting paid.

Even if CMS can mitigate some of the burden of this unfunded mandate, the question that still remains is: Why are physicians and by proxy their patients, being asked to bear this burden?

ICD-10 will not improve patient care. In fact, these ICD codes have nothing to do with patient care; they are part of the billing process.

In more than 30 years of practicing plastic and reconstructive surgery I have never consulted the ICD codes to help me decide what was wrong with a patient or aid me in treating a patient.

That will not change with ICD-10, the ICD-10 will not allow for early detection of epidemics beyond the precautions and guidelines already established by the Center for Disease Control and the National Institute of Health.

If we have to rely on the billing process to sound the alert the next time an Ebola patient interacts with the health care system, we will be in serious trouble.

Granted, ICD-10 will allow for greater specificity in the submission of billing claims and I will discuss this in more detail later in today’s post.

But unless fixing a fracture of the right wrist, for example, will be reimbursed differently than fixing a fracture of the left wrist, ICD-10 seems disproportionately complex.

Even in terms of research, there are better options than ICD-10.

When a coder goes through a patient’s medical record and attempts to translate what was done into billing codes, they have one goal in mind, maximizing reimbursement, not producing research data. Claims data have never been good sources for clinical research. Support of the ongoing efforts to develop good clinical patient registries is a much better approach to the production of data that will lead to better quality, more efficient care.

It appears that the transition to ICD-10 will be imposed as scheduled on October 1 of this year, perpetuating the bad policy decision of conflating the disparate goals of research and medical billing.

With regards to our discussion to rural health and the private practitioner, specifically solo practitioners; the codes will go from about 7,600 to over 72,000 codes. This means that practices will have to upgrade their computer hardware and software as well as augment their staff. This will cost the average practice $20,000-30,000 per practitioner per practice.

When I lecture physicians regarding practice management and their modification and getting ready for the coding changes, I suggest, strongly, that practices put aside $30,000-40,000 to cushion the problems that we predict from the coding changes. I predict that due to the transition and software problems, that there will be 40-60% rejection of insurance claims, especially Medicare and Medicaid insurance claims. Think about that impact on the average small practice!

The recent gesture from CMS to provide for a one year grace period is welcome only in so far as it acknowledges that “flipping the switch” to ICD-10 on Oct. 1 is likely to be disastrous.

H.R. 3018, the Coding Flexibility in Healthcare Act of 2015, recently introduced by Reps. Marsha Blackburn, R-Tenn., and Tom Price, R-N.C., would allow providers to use either ICD-9 or ICD-10 for six months.

Although far from ideal, this would at least offer some relief for the many providers who are not ready to switch. Another however, is that there is no guarantee that all third party payers, i.e. the insurance companies to whom we physicians have to submit the insurance forms with the codes, will also follow the grace period. And that is why I still tell my clients to set aside money in a savings account to support the overhead of the practice until all runs smoothly.

At the very least, CMS should add the provision in H.R. 2652—Protecting Patients and Physicians Against Coding Act of 2015, introduced by Rep. Gary Palmer, R-Ala., and Rep. Diane Black , R-Tenn., that calls for a study of the real-time impact of the transition on medical practices.

This information should help to finally persuade Congress to pursue a better solution—one that will ultimately delink research from the medical billing process.

If not, we will get to do this all again in the near future with ICD-11?

I didn’t want to beat a dead horse but it is important for all to know the challenges that their doctors and hospitals will be facing. The Heritage Foundation further discusses the topic of the new coding system and states that the list of organizations lining up against ICD-10 is growing — as is the ferocity of their tone, as the latest in the fray is a conservative think tank that’s calling on Congress to abandon the code set transition.

That would be the Heritage Foundation, with its new report titled, “The New Disease Classification (ICD-10): Doctors and Patients will Pay,” which makes some rather strong recommendations.

“While an updated diagnostic system for disease classification might be in order, there are significant costs and trade-offs,” write Heritage authors John O’Shea, MD, and John Grimsley in the report. “To protect practicing physicians and other health care workers from such an unfunded mandate, Congress should delink the disparate goals of research and reimbursement, and develop a more appropriate coding system that makes the billing process less, not more, burdensome.

“In the interim,” they add, “Congress should allow providers to have the choice of continuing to use the current ICD-9 system or adopt the new ICD-10 system until the alternative reimbursement arrangement is complete.”

Without specifically endorsing either Tennessee Republican Rep. Diane Black’s newly-proposed bill, the ICD-TEN Act (Increasing Clarity for Doctors by Transitioning Effectively Now) or Texas Republican Rep. Ted Poe’s resurrection of the Cutting Costly Codes Act, Heritage wades into both waters with suggestions of enabling dual-coding and essentially doing away with any mandate that healthcare entities must convert to ICD-10.

Where Heritage hits hardest is in the treatment of what it considers ‘weak arguments for ICD-10.’ On the point that ICD-9 is outdated as a way to track clinical data, O’Shea and Grimsley write that “there is no good evidence that a substantially more complex coding system makes the billing process any easier. In fact, just the opposite may be true.”

Addressing the oft-cited claims that the U.S. lags behind those developed nations already on ICD-10, meanwhile, the Heritage authors counter that “currently only 10 countries employ ICD-10 in the reimbursement process, six of which have a single-payer healthcare system.”

And to the proponents advocating that ICD-10 improves patient care, O’Shea and Grimsley write that “if the goal is to collect data that will make it easier for researchers and health care analysts to retrieve that data, there are better ways. For example, SNOMED-CT, a coding system specifically designed to capture patient data for clinical purposes and facilitate sharing of such data, may be more ideal for coding and classifying disease than ICD-10.”

Heritage stops short of recommending SNOMED-CT in lieu of ICD-10, but perhaps the most interesting suggestion to Congress is that the U.S. “develop a more appropriate coding system that makes the billing process less, not more, burdensome.”

In the past, there has been chatter of opting instead for SNOMED-CT or even LOINC — or, as American Medical Association incoming president Steven Stack, MD, said in an interview Healthcare IT News sister site Healthcare Finance, holding out for ICD-11.

In reality, however, the Department of Health and Human Services has not exactly given any of those options serious consideration – so it seems rather unlikely that the U.S. is going to completely change course, eschew ICD-10 entirely, and build our own alternative.

Or am I wrong? Should we seriously consider starting from scratch to create an ideal, if not near-perfect, modern classification system that benefits payers, providers of all sizes and, most important, patients?

Part of the deal the Centers for Medicare and Medicaid Services (CMS) made with the American Medical Association (AMA) is that Medicare won’t reject ICD-10 claims as long as the code is in the correct family.

Michelle Leppert takes a look at whose family in the ICD-10 code set. Let’s just say it’s better to get the diagnosis code right instead of counting on a yet to be defined definition of family.

Part of the deal the Centers for Medicare and Medicaid Services (CMS) made with the American Medical Association (AMA) is that Medicare won’t reject ICD-10 claims as long as the code is in the correct family.

Michelle Leppert takes a look at whose family in the ICD-10 code set. Let’s just say it’s better to get the diagnosis code right instead of counting on a yet to be defined by the definition of family.

It’s understandable that physicians are unimpressed by the granular data that will be collected from ICD-10 coding. Documenting so many conditions relating a patient’s injury or illness doesn’t affect that patient’s care. Why bother?

Jennifer Della’Zanna, medical writer and online instructor for Education2Go, has the best explanation of how we got so many crazy ICD-10-CM codes. The diagnosis codes are part of a system that can be built by piecing components together.

Della’Zanna uses the ICD-10 code for bitten by a cow to illustrate how to build an ICD-10 code. If you change just the fourth character, you change the animal that bites the patient. It’s not so crazy to treat a patient who was bitten by a dog or cat.

Della’Zanna has another good point. All these crazy ICD-10 codes are external cause codes — which make up 9 percent of the ICD-10-CM codes. “If you’re a coder who is not already using external cause coding on a day to day basis, you will likely not have to start now. Most people never look in this chapter—ever.”

Last week’s promise that Medicare will not deny any medical claims “based solely on the specificity of the ICD-10 diagnosis code” is a pretty good chance to offer the warning “Be careful what you wish for. You just might get it.”

Ever since the political winds seemed to shift in favor of ICD-10 implementation on Oct. 1 this year, there was a campaign to give independent physicians a break. They needed a safe harbor from the very specific sub-codes of ICD-10 diagnoses.

The fear is that getting those codes wrong or failing to include them could mean rejected claims. And independent physician practices cannot survive that kind of revenue disruption. So they can afford to be kind of vague with their diagnoses.

But isn’t the opposite true? Shouldn’t it be too expensive to be kind of vague with diagnosis coding?

Basically, diagnosis coding supports reimbursements. The correct, valid and specific diagnosis codes can trigger a level of reimbursement that unspecified medical codes couldn’t. This isn’t a penalty under the new Centers for Medicare and Medicaid Services (CMS) guidelines. This is leaving money on the table.

It’s not fraud either. It’s accurately submitting claims for the work physicians do and that healthcare payers say they will reimburse.

David Cutler, health economist at Harvard, told Marketplace this is important because medical reimbursements are shrinking. So medical coding becomes the equivalent of checking the couch cushions for change.

And that’s not going to get any better. The politics of healthcare is against spending more money on healthcare. It’s a problem that has gotten out of hand according to anyone who wants a vote. Physicians will not be able to afford to be very specific.

Why physicians should learn to embrace ICD-10 specificity?

The recent promise that Medicare will not deny any medical claims “based solely on the specificity of the ICD-10 diagnosis code” is a pretty good chance to offer the warning “Be careful what you wish for. You just might get it.”

It’s not going to get any simpler than ICD-10 coding and that is a predictable problem.

Remember the recent computer problems with United Airlines and the New York Stock Exchange and with United Airlines. Assuming neither temporary shut down of those systems was the result of a malicious cyber attack, each happened for very different reasons. But the hosts of the Slate Money podcast on Saturday attributed the problems to the assumption that computer systems evolve into glitch filled, complex systems.

As more features get added to software, it becomes more complex. It’s how everything works including medical classifications such as ICD.

I don’t think anyone will call ICD-9 coding simple. But the upgrade — aka ICD-10 coding — was built to be more complex because computers could handle the complexity.

Why is the new system so confusing realizing that the system transitions for about 7,600 codes to 72,000 codes. The explanation is even more complicated than just the numbers of codes.

ICD-10-CM/PCS coding will require new levels of specificity

While physicians and politicians have focused on the specificity of ICD-10 diagnosis codes as a potential practice killer, ICD-10 procedure codes, which will be the updated CPT codes, have been mostly ignored.

Probably because only hospitals will have to worry about the new level of detail to be required to assign ICD-10-PCS codes. Not only will medical coders have to identify what was the medical procedure, but how it was performed.

There were two interesting observations:

First, John O’Shea, MD, a senior fellow for health policy studies at the Heritage Foundation, doesn’t think the grace period is enough.

“I don’t think (this announcement) solves the problem,” he told MedPage Today. “My understanding is that there are a significant number of practices that are not ready to go — not ready meaning they haven’t purchased the (ICD-10) software yet. I don’t know if being a little more lenient about errors in coding is really going to help those practices.”

Second, Robert Tennant, senior policy analyst for the Medical Group Management Association, doesn’t think this does not help “a major group of folks who have not had their software upgraded.” Which is why Tennant is endorsing the Coding Flexibility in Healthcare Act of 2015. It calls for the acceptance of ICD-9 codes for 180 days after ICD-10 implementation.

Despite the focus on diagnosis codes, ICD-10-CM coding is not expected to be as big as drain on coding productivity as ICD-10-PCS coding. Productivity can be protected but it will have costs by:

  • Training
  • Hiring more medical coders
  • Obtain automation technology

More confusing, this is not about a Congressional delay of ICD-10 implementation nor the reluctance of non-HIPAA covered entities. It’s about why there may be legitimate reasons why healthcare providers may need to use ICD-9 codes after the ICD-10 deadline. It’s the dates of service that determine what ICD version is needed. For example, if a patient is treated in September but the bill is prepared in October, ICD-9 codes will be needed, but if the time of treatment or hospitalization starts before Oct. 1 but continues after the deadline, two sets of codes will be needed. Medical claims are supposed to contain either ICD-9 or ICD-10 codes. Separate claims will be needed. Did anybody understand this?

This ICD-10 transition is going to happen. The Centers for Medicare and Medicaid Services (CMS) and American Medical Association (AMA) confirmed it recently by announcing a joint effort to help physicians have a smooth ICD-10 transition.

CMS said,”CMS and AMA are working to make sure physicians and other providers are ready ahead of the transition to ICD-10 that will happen on October 1.

” This will mean “webinars, on-site training, educational articles and national provider calls to help physicians and other health care providers learn about the updated codes and prepare for the transition.”

And one more important thing CMS made four promises:

  • CMS is creating an ICD-10 Ombudsman to deal with healthcare providers’ ICD-10 problems. Without using the words “safe harbor” or “grace period,” CMS promises that Medicare will not deny any medical claims “based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family.”
  • Quality reporting programs such as Physician Quality Reporting System (PQRS), Value Based Modifier (VBM), or Meaningful Use (MU) will suspend penalties that may result because of lack of specificity.
  • There will be advance payments available if the Medicare system has problems.
  • This era of undeniability is to last 12 months and the CMS guidance is pretty good at explaining this does not give physicians the opportunity to use ICD-9 codes or incorrect ICD-10 codes. This affects Medicare Administrative Contractors and Recovery Audit Contractors.

Important to note again, there is no word on how private healthcare payers will treat medical claims. Just because CMS has said that Medicare claims submissions will have a grace period it doesn’t mean Aetna or the Blues will follow.

While the AMA is celebrating this as a victory, I’m not so sure that it has as much power as it likes to think it has. The “grace period” will please politicians, but I’m not so sure it’s really going to help. If physician practices have any problems, it’s going to be getting everything to work right. They need help getting ICD-10 claims out the door.

Now let’s see how this is going to work.

Location, location, location are keys to getting ICD-10 codes right

Much of the specificity in ICD-10 coding comes from the location of the injury or illness. Getting ICD-10 codes right means getting laterality and or part of the body right. Much of the specificity in ICD-10 coding comes from the location of the injury or illness. Getting ICD-10 codes right means getting laterality and or part of the body right. Medscape works through many of the changes and how to get many diagnoses correct:

  • Neoplasms: Part of body and laterality
  • Neuropathies and neural lesions: Limb and laterality
  • Pain: Part of body and laterality-Diseases of the eye and adnexa Laterality; lid conditions, upper or lower
  • Diseases of the ear: Laterality
  • Peripheral cardiovascular diseases: Part of body, laterality and complications
  • Skin conditions: Part of body and laterality
  • Musculoskeletal conditions: Part of body and laterality
  • Some breast conditions: Laterality
  • Injuries: Part of body and laterality

If this makes you want to skip ICD-10 coding and go straight to ICD-11 implementation, don’t expect any simplicity there. Because that’s going to be more than a list of diagnosis and procedure codes. It’s going to be an interactive database.

The question that I raise once again is-will these issues contribute to the demise of the independent group and solo practices and how does a practice stay independent and sustainable? More next week!

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