Paperwork reduction bill is caught in coding crossfire

The measure would allow HHS to replace Medicare's ICD-9 coding system with a more complex version.

By Markian Hawryluk, amednews staff. April 14, 2003.

Washington -- A bill designed to reduce the hassle factor for physicians in the Medicare program may wind up causing more headaches than it cures.

The House Energy and Commerce committee added a provision to its regulatory reform bill that would authorize the secretary of Health and Human Services to move forward with a new coding system that would become the standard for health care data collection and billing. That move could increase the number of codes physicians have to deal with from the current 4,000 to about 200,000, and require wholesale changes to computer systems, fee schedules and contracts.

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Although the change has been contemplated initially only for inpatient diagnoses and services, there is considerable interest in extending the coding system to all sites of services, even physician practices.

Hospitals have complained that the current coding system for inpatient diagnoses and services, the International Classification of Diseases, 9th revision, is becoming increasingly unworkable. The system is more than 20 years old and has not kept up with developments in medicine.

For example, many procedures that can now be performed through a variety of approaches, including laparoscopy, were done only through open surgery when the ICD-9 system was developed. Some of the system's categories of diagnoses and procedures do not have enough codes to accommodate the advances. Many catch-all "other" categories must now be used for a number of procedures or diagnoses that can vary tremendously in the amount of resources they require, said Sue Prophet-Bowman, director of coding policy and compliance for the American Health Information Management Assn.

"We are using a procedure coding system on the brink of collapse," she said. "We have run out of codes, and we are faced with such choices as replacement or a gerrymandering of coding rules and concepts just to keep the system going."

ICD-9 has not kept up with many diagnoses and procedures.

The solution is to move to ICD-10, the next generation of the coding system, many health care organizations have said. The National Committee on Vital and Health Statistics, an HHS advisory panel, has been debating whether to recommend a move to ICD-10 as the standard for data transmission under the Health Insurance Portability and Accountability Act.

The measure included in the regulatory reform bill would authorize the HHS secretary to move forward with the transition to the new coding system under HIPAA, even in the absence of an NCVHS recommendation. The provision was not included in the version of the bill passed earlier by the Ways and Means health subcommittee.

In a letter to NCVHS last year, a number of physicians groups, including the American Medical Association, cautioned that such a move would wreak havoc on the health care system.

"The possible proliferation of all these codes will inevitably lead to a significant increase in data and reporting errors for inpatient procedure coding," the groups said. "A higher coding error rate could have system-wide effects, and the very real possibility of facility payment errors will affect physicians and other health care professionals who practice in hospitals."

In testimony before the NCVHS, the AMA argued that the cost of implementing a totally new system, as well as the extensive training the change would require, would far outweigh the benefits it would provide. The group has argued that with less than half of the possible codes under ICD-9 in use, there is ample room for expansion. Much like moving phone numbers to new area codes, new procedures could be accommodated by less-populated categories of codes.

Out with CPT?

There is also concern that a move to ICD-10 for inpatient diagnoses and procedures could prompt lawmakers and regulators to adopt ICD-10 for outpatient services, both in hospital and physician office settings.

The AMA has supported the concept of a single coding system across all sites of service but believes the Current Procedural Terminology coding system, developed and maintained by the AMA, could serve that role. CPT is already in use in both inpatient and outpatient settings.

With less than half of possible ICD-9 codes in use, there is room for expansion.

The CPT system, however, is generally viewed by health facilities as a system of, by and for physicians, and not reflective of facility needs.

At press time, as the full Ways and Means committee was preparing to vote on the bill, health groups were meeting with representatives to broker a compromise. There is fear that sharp division over the coding system could jeopardize a bill intended to include only widely accepted reforms that could be achieved at little cost.

Rep. Charles Norwood, DDS (R, Ga.), offered but withdrew an amendment that would have stricken the coding measure from the bill after Energy and Commerce Chair Billy Tauzin (R, La.) assured him there would be more discussions before the bill reached the House floor.

"His instincts were that this is generally the wrong direction," a Norwood aide said. "We don't believe that the committee has put enough research and study into this issue to simply come in and say, 'We think the secretary should act without the National Committee on Vital and Health Statistics' stance.' "

According to a spokesman from the Centers for Medicare & Medicaid Services, the Bush administration has not yet taken a position on the coding issue or the regulatory reform bill.

"We are still waiting for a recommendation from the NCVHS," the spokesman said.

The NCVHS has commissioned a cost-benefit analysis of a move to ICD-10 and hopes to consider results of that study at an August subcommittee meeting. That panel might then make a recommendation for consideration at the NCVHS full committee meeting in September.

HIPAA regulations require that any change in the accepted coding standard go through the federal rule-making process, including a public comment period. If a decision is made to move forward with the ICD-10 system, it would likely take two or more years before the change was done.