Analysis: New codes rushed, insurers say

by C-UPI@CLARI.NET (UNITED PRESS INTERNATIONAL) on 2006-05-17 11:50:18

WASHINGTON, May 17 (UPI) -- Insurance companies are warning
about a bill currently in the U.S House that they say could lead to
mass confusion in patient billing and cost Medicare billions of
dollars in mistaken and fraudulent charges.
At issue is a proposed transition by 2009 to a new billing
code system that requires providers to choose from some 120,000
diagnosis codes and 87,000 procedure codes -- about eight times more
than under the current standard.
The change would be a "huge undertaking for everybody," said
Alissa Fox, vice president for legislative and regulatory policy at
the Blue Cross and Blue Shield Association, which represents the 40
independent Blue Cross and Blue Shield non-profit insurance
companies. The group collectively provides healthcare coverage for
almost one in three Americans. "We're recommending not starting
until 2010 and not finishing until 2012," she said.
The Health Information Technology Act of 2005, introduced by
Rep. Nancy Johnson, R-Conn., is expected to be marked up by the
House Ways and Means Committee this week. In it are provisions to
encourage doctors and hospitals to adopt health IT, and a process
for federal certification of health IT products.
But also tucked into the bill is language that would require
that all providers and payers -- including Medicare -- to switch
from the 24,000 ICD-9 codes currently in use to ICD-10 codes.
"We were surprised by how many codes there are actually
going to be," Fox told United Press International, especially
compared to the number of ICD-10 codes that are currently in use
other countries like Australia, where there are only about 22,000.
The new codes, which are being developed by the National
Center for Health Statistics in consultation with physician
specialty groups, have seven digits instead of five, and represent a
dramatic re-imagining of how payers keep track of what they are
paying providers for.
The previous codes were grouped by diagnosis -- such as
"fracture", for example -- but the new codes would be grouped by
body part. The new codes are also much more specific. For example,
there are four ICD-9 codes for a sprained ankle, but under ICD-10
there could be as many as 72 codes.
The result of adopting the new codes would be to bring the
nation's healthcare system into the digital age instead of relying
on codes developed in the 1970s, Johnson said when she introduced
the bill last year. "It will overcome some of the key obstacles that
have slowed our progress toward adoption of a national,
interoperable electronic system."
The additional codes will allow for much more specific
tracking of data, a crucial component of Bush administration
initiatives like physician pay-for-performance schemes and public
posting of quality data.
And adopting the new codes will eventually lead to improved
cost and quality, Fox said, "having more granular information will
give you the information you need to improve quality."
However, she added, if it is done it a rushed manner it
could lead to massive confusion and expense as providers code
treatments incorrectly, and payers mistakenly reject correctly coded
claims.
Doctors need new equipment and training on the new system,
and the current 4010 format used to automatically transmit
electronic healthcare transactions must be updated to a new 5010
version to be compatible with the ICD-10 codes, she said.
Another large problem is the increased potential for fraud,
especially where Medicare is concerned, said D. McCarty Thornton, a
healthcare fraud expert and former chief counsel to the inspector
general at the Department of Health and Human Services.
There are currently 50 contractors who process Medicare
claims and they are largely responsible for ensuring that the claims
are not false, either because someone made a billing mistake or is
knowingly trying to cheat the system.
Between 1996 and 2005, using data-tracking techniques to
identify likely abusers, they were able to reduce improper Medicare
payments from 13.8 percent to 5.2 percent of total Medicare
payments, meaning the program only incorrectly paid out $12.1
billion.
But the change in codes could undermine their efforts,
because they would have to reconfigure their data mining software
and other anti-fraud tools, Thornton said, and because the
difference between the two sets of codes would render ICD-9 data
virtually useless for looking at physician claim patterns over time.
"There are those out there who are willing to push the
envelope to exploit weaknesses in the Medicare program and this
would give them an opportunity," he said. "If the switch occurs too
early, there could be a return to the double digit error rates seen
in the 1990s."
To make matters worse, he said, under the bill's timeline,
the transition will be taking place just as the 50 Medicare
contractors, which specialize in either Part A or Part B, will be
consolidated into 15 that must deal with both parts.
"The transition to ICD-10 should occur after contractors are
over the hump," he said.
To avoid these problems, Fox said, the bill should be
amended to include a slower timeline to give payers and providers a
chance to prepare. Even better would be to work out glitches ahead
of time through a quality pilot program.
"It never seems difficult until you actually roll up your
sleeves and think of every single thing you need to do to get it
done," she said.
"We're not saying don't go to ICD-10 ... we're saying we
need a reasonable time frame and rushed implementation is a real
concern."