Presentation by James D. Cross, MD, National Medical
Director, Aetna,
On Behalf of Aetna and the American Association of Health Plans
August 29, 2002
James D. Cross, MD
National Medical Director
Aetna
1301 McCormick Drive
Largo, MD 20774
(301) 636-1119
CrossJD@aetna.com
Good morning. My name is Dr. James Cross. I am the National Medical Director for Aetna and I am appearing today on behalf of Aetna and the American Association of Health Plans (AAHP). I would like to discuss the potential impact on our health care system and on health plan operations if an entity were to change from to the ICD-9 to the ICD-10 coding system for medical diagnosis and procedure codes.
AAHP is the principal national organization representing HMOs, PPOs, and other network plans. AAHP’s member health plans arrange health care services for approximately 160 million members nationwide. Aetna provides health care and related group benefits to approximately 14 million health care members, 11 million dental members, and 12 million group insurance customers. Aetna’s PPO networks have over 500,000 health care providers and our HMO networks have over 380,000 providers. Aetna’s products include a full range of health insurance, including dental and pharmacy benefits, as well as group insurance products such as life, disability, and long-term care insurance.
As National Medical Director for Aetna, I am responsible for our claim medical management operations which provide clinical review of claims. I also oversee the development and maintenance of coding logic, clinical and coverage policies, case management and customer service efforts, and reimbursement policy. I am a Diplomat of the American Board of Quality Assurance and Utilization Review and the American Board of Forensic Examiners, and a Fellow of the American College of Medical Quality.
The use of ICD-10 codes for medical diagnosis and procedure coding has been debated for a number of years. The primary reasons given for changing to the new coding system are concerns that the current ICD-9 codes may be inadequate and do not provide sufficiently detailed information needed for health research and statistical analysis. What has not been fully assessed, however, is the potential cost and administrative burden on the health care system of moving to a new and complicated coding structure, such as ICD-10. A thorough consideration of all the costs and complexity associated with the proposed migration to ICD-10 should be performed by this subcommittee before any action regarding a recommendation for such an important change is made.
Currently, ICD-9-CM is used for diagnosis coding in most inpatient and outpatient settings. These codes are contained in Volumes 1 and 2 of ICD-9-CM. Volume 3 of ICD-9-CM includes procedure codes used in inpatient institutional settings (i.e., hospitals). There are separate procedure coding systems for other healthcare settings, primarily the Current Procedural Terminology - Fourth Edition (CPT-4) developed by the American Medical Association, that is used in physician offices and other outpatient institutional settings such as ambulatory surgical centers.
While CPT-4 procedure codes would continue to be used in many outpatient settings, the proposed migration to from ICD-9 to ICD-10 would require the use of ICD-10 for procedure coding for inpatient institutional settings. Additionally, this committee is considering recommending the use of ICD-10 for all diagnosis coding as well. However, a change to ICD-10 for diagnosis and inpatient procedure codes would result in a tremendous burden, especially for physicians, because of the costs and complexity associated with such a major change.
The migration to ICD-10 diagnosis and procedure codes would result in a substantial increase in the number of fields used for the coding process and a significant change to a system that requires both numbers and letters. For example, the current diagnosis codes are a numeric system (with some supplementary letter codes) using a minimum of 3 digits and a maximum of 5 digits. In contrast, ICD-10 diagnosis codes combine letters and numbers and use a minimum of 3 digits and a maximum of 6 digits. Likewise, current ICD-9 procedure codes are numeric with a minimum of 3 digits and a maximum of 4 digits, while the ICD-10 procedure codes are alphanumeric with 7 required digits.
As a result, the number of possible codes increases dramatically. As the Centers for Medicare and Medicaid Services (CMS) explained in March, 2002during hearings before this subcommittee earlier this year, “whereas ICD-9-CM procedure contains less than 4,000 codes, the current draft of ICD-10-PCS contains 197,769 codes.”(1) CMS also reported that the number of possible procedure codes could be expanded as new medical technologies are developed.
The change to ICD-10-PCS will also dramatically increase the complexity of the coding process. This migration will require substantial physician and hospital staff training and will significantly add to the administrative cost of coding. In addition, switching to ICD-10-PCS will increase the amount of time that both physicians and administrative support staff will need to devote to the coding process. Currently, physicians and administrative support staff utilize a four digit numeric code to designate procedures. If a change is made to use ICD-10-PCS, there will be more fields in the code. All of these fields will have to be completed for an accurate and useful code. Physicians will have to provide additional and more specific information in the medical record on what procedures were used and will likely become more "hands-on" in the coding process. In addition, administrative staff will have to spend more time coding and may require more frequent consultation with medical staff to determine exactly what procedures were performed.
A coding change would also have a significant impact on health care payors, such as insurers, managed care plans, employers, and governmental programs, as well as their business partners, such as billing and claims service vendors and health care clearinghouses. The migration to ICD-10 and any change would affect impact multiple systems used by those entities. Existing hardware systems such as computer mainframes and optical scanning systems would have to be updated or replaced in order to be able to process the added fields. New claims and other transaction forms would have to be developed. Extensive software revisions would be required to incorporate the ICD-10-PCS codes into payment and claim systems.
Payment methodologies would have to be modified to take into account the new codes. For example, ICD-10-PCS is a tool for reporting procedures and not a reimbursement methodology because it does not include any “global” codes that are necessary for payment adjudication systems. While ICD-10-PCS provides detailed and separate codes for every step or part of a particular medical procedure such as heart surgery, it does not have a mechanism that allows the combination of related codes for reimbursement purposes. New payment related codes would have to be created and agreed upon using a combination of the individual ICD-10-PCS codes.
Health plans are already devoting considerable resources to implement the HIPAA privacy and electronic transactions standards regulations. Additional HIPAA administrative simplification regulations (security, health care provider identifiers, health plan identifiers, claim attachments, and first injury reports) have yet to be published by the Department of Health and Human Services. A change in the current coding system for medical diagnosis and procedure codes will significantly add to this burden and could greatly exceed what is currently being spent on HIPAA implementation.
Recently, the United States General Accounting Office (GAO) issued a report analyzing whether a single coding system should be adopted for all inpatient and outpatient medical procedures.(2) This report includes a discussion of the merits, and disadvantages, of changing to ICD-10-PCS. While the GAO report notes that ICD-10-PCS provides greater coding specificity, the report also makes the following observations about the difficulties of switching to ICD-10-PCS:
However, the design and logic of 10-PCS raise concerns about potential challenges in its implementation. For example, there are some cases where 10-PCS’s specificity creates a significantly greater number of codes for certain sets of similar procedures, which may reduce coding accuracy. In addition, because 10-PCS is a distinct departure from the design and logic of ICD-9-CM Vol. 3, the existing health care administrative system would need to be changed significantly to accommodate the new code set, imposing additional financial costs and administrative burdens on members of the health care industry that are currently undertaking changes to comply with the adopted standard code sets under HIPAA.(3)
We support the conclusions outlined in the GAO report on the potential administrative and financial burdens of changing to ICD-10-PCS from the current ICD-9 coding system.
Before a decision is made to approve a migration to ICD-10 for either diagnosis coding or procedure coding or both, it is crucial that a study be conducted of the potential cost of the change. While CMS has apparently given its approval for a migration to ICD-10, it did not indicate the expected cost on the Medicare program or on Medicare+Choice. It is also unclear what the financial impact will be on other governmental programs such as Medicare and Medicaid andor on the private sector payors. Finally, the ultimate consideration must be that in the end, all of these costs will be passed on to consumers who are already experiencing a significant rise in health care costs.
Aetna and AAHP support the goals of administrative simplification. We believe that all of the participants in the health care system – patients, doctors, hospitals, health plans, employers – will benefit from the development of systems and processes that provide efficient and effective data interchange. We also believe that any significant changes to that system, such as a potential migration to ICD-10, must be thoroughly assessed with its benefits weighted against the potential cost. While a change to ICD-10 may seem attractive in some respects, it is premature to act without adequate information. We urge NVCHS to make a more detailed analysis of this issue.
(1) Tom Gustafson, "ICD-10-PCS Overview and Implementation Issues," at presented at the April 9, 2002 NCVHS Subcommittee on Standards and Security meeting.
(2) United States General Accounting Office, “HIPAA Standards – Dual Code Sets Are Acceptable for Reporting Medical Procedures,” GAO-02-796 (August 2002).
(3) Id at p. 5.