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Why We Need 1,170 Codes for Angioplasty

The Wall Street Journal

NOVEMBER 11, 2008

By JANE ZHANG

Government regulators are expected soon to overhaul the aging coding system that doctors and hospitals use to bill insurers -- a switch that many in health care say is necessary, but that could initially cause headaches for consumers and their doctors.

Hospitals, insurance companies and many doctors say the planned coding system is necessary to keep up with the host of new medical developments that emerge every year. The new system, known as ICD-10, would sharply increase the number of codes used to define various ailments and procedures to 155,000, nearly 10 times as many codes as are currently in use. Today, for example, there's just one code -- 39.50 -- for angioplasty, a procedure used to widen blocked blood vessels; under the new system, medical practitioners can choose among 1,170 coded descriptions that pinpoint such factors as the location and the device involved for each patient.

 

Decoding the Codes

Doctors and hospitals may soon be required to use a new medical-coding system. Here are some pros and cons:

                        The new codes can offer more detail on patients' conditions.

                        Doctors complain that changing to the new system will eat up time and money.

                        Hospitals could get higher payments for performing more-advanced surgeries.

                        Consumers may see more billing errors as the new system rolls out.

The Centers for Medicare and Medicaid Services, or CMS, the federal agency charged with maintaining the medical codes, says the new system will allow doctors to include more details on patients' medical records. This could give a boost to efforts by government and industry to encourage the adoption of a nationwide electronic medical-information system. The coding changes also will make it easier to track outbreaks of new diseases, federal officials say.

 

Hospitals have been urging the coding-system upgrade for years, in part because the new codes make it easier to describe advanced surgeries and procedures that generally command higher reimbursement rates.

But many doctors in private practice are expected to have to scramble to adapt to the new system's greater complexity -- especially because regulators are aiming for the new system to be fully in place within three years. Many doctors and insurers are lobbying to extend that deadline to about five years or more, and some say the new codes are unnecessary.

"They are not simple changes. All of that is going to cost money" to buy and install new software and train physicians, coders and nurses, says Tom Felger, a family physician in South Bend, Ind. He worries that in the short run, the five doctors in his practice will end up spending more time on paperwork and less time with patients.

CMS estimates additional costs to the medical industry of adopting the new coding system of $1.64 billion over 15 years.

Some medical-industry officials also are concerned that consumers could see, at least initially, an increase in billing errors. That can lead, for example, to overcharging of patients, or an insurer denying payment for a claim because it was submitted with an incorrect code. Some officials also expect an increase in billing fraud and more delays in payments to doctors and consumers.

CMS says it expects implementation of the new system initially will boost by as much as 10% the number of claims returned because of coding errors. But a study by the Blue Cross and Blue Shield Association of insurers predicts billing errors are likely to rise between 10% and 25% in the first year. The group says extending to five years the deadline for implementing the changes could ease the problems.

More Billing Errors Seen

"The [three-year] time frame proposed is unworkable in the real world," says Alissa Fox, vice president for legislative and regulatory policy at the Blue Cross and Blue Shield Association.

"Because of the complexity of the change, the provider could make the [billing] mistake or the payer could make the mistake. The patient is stuck in the middle," says Larrie Dawkins, chief compliance officer at Wake Forest University Health Sciences, a network of 800 physicians in Salem, N.C. He says claim rejections currently at medical practices typically run at a rate of 5% to 12%.

The U.S. adopted the current coding system, known as the International Classification of Diseases, about 30 years ago, based on a framework developed by the World Health Organization. Most of the world's developed countries have already modernized their versions. And while CMS has updated its codes regularly, the planned overhaul would represent the biggest expansion by far in the U.S. coding system.

CMS proposed the regulation for the new system in August, closed the public comment period on Oct. 21, and aims to publish the final rule before the end of the year, a CMS spokesman says.

Lots More Codes

The new system of 155,000 codes includes 68,000 codes describing diagnoses, up from 13,000 currently, and 87,000 codes for different medical procedures, compared with 3,000 in the current system. Hospitals use both types of codes, but physicians use only the diagnostic codes. For procedures, physicians rely on a separate system of nearly 9,200 codes from the American Medical Association that dates back to the 1960s.

Creaky System

CMS says the current system of numbered codes has run out of room to expand. That has led to some new treatments being grouped with unrelated diseases. For example, in the rapidly developing field of heart treatments and procedures, some codes are stuck in with eye treatments -- a section that still has spaces to add new numbers.

"The lack of space is a symptom of the fact that medical procedures are changing so quickly," says Karen Trudel, deputy director of the CMS's Office of E-health Standards and Services. CMS also oversees the Medicare federal insurance program for the elderly and disabled, which pays for about half of all procedures performed at hospitals.

Hospitals See Benefits

George Arges, senior director at the American Hospital Association's health-data management group, says the new coding system could lead to higher payments for hospitals that perform more-advanced surgeries, among other benefits. He expects hospitals will see lower administrative costs because the new, more specific codes will require less back and forth with insurers to clarify what treatments were performed.

More Patient Details

Robert Tennant, senior policy adviser at the Medical Group Management Association, a trade organization for medical group practices, says the new coding system will require that doctors get more medical details from each patient. Different insurers also might require different levels of specificity, he says.

For example, the current system has five codes describing a sprained ankle, but the new system has 45 codes, describing which part of the ankle joint was injured, whether it's the left or right ankle, and whether it's a first-time injury. "That's very complicated to a provider" to detail, Mr. Tennant says. If pressed for time, he says, a doctor might just check "unspecified" to describe an injury.

 

—Alicia Mundy contributed to this article.

Write to Jane Zhang at Jane.Zhang@wsj.com