Mr. Chairman, Members of the Subcommittee: Thank you for the opportunity to offer a statement about this important concern.
My name is Dr. Jim Cross. I am Vice President and National Medical Director for Customer Services Administration at United HealthCare Corporation. United HealthCare is a national leader in health care management, serving purchasers, consumers, managers and providers of health care since 1974. The company provides a broad continuum of health care programs and services, including health maintenance organizations (HMO's), point of service, preferred provider organizations (PPO's) and managed indemnity programs; as well as managed mental health and substance abuse services; utilization management; workers' compensation and disability management services; specialized provider networks; third-party administration (TPA) services; employee assistance services; Medicare and managed care programs for the aged; managed Medicaid services; health care evaluation services; information systems; and administrative services. We currently provide health services to 40 million members, of these, 14 million are enrolled in our core health products. Over 75,000 employers offer our products to their employees. Our networks include 3,000 hospitals, 50,000 pharmacies and 265,000 health care providers.
In my position at United I am responsible for overall claim medical management, including abuse and fraud, provider reimbursement standards and policies and related systems development. I have been involved in reviewing clinical coding and classification issues with United HealthCare for more than 8 years, and have participated in the ICD-10 PCS Advisory Panel.
This summary of coding and classification issues is also presented on behalf of the American Association of Health Plans (AAHP). AAHP represents over 1,000 HMOs, PPOs and similar plans that provide health care for more than 140 million Americans nationwide. AAHP applauds the Administrative Simplification requirement of the Health Insurance Portability and Accountability Act of 1996, and believes that a migration toward uniform standards for electronic business and health care transactions would be an efficient and effective way for transmitting financial and administrative data.
We do however, have some concerns with these requirements, primarily related to the proposed implementation date of the year 2000. Our concerns stem from the tremendous resource commitment that will be required from a systems, training, and documentation standpoint for third party payers, health care software developers, as well as providers in order to transition to a different coding system. We also feel strongly that a National standard crosswalk must be developed well in advance of any implementation. These concerns are addressed more fully in our responses to the following questions:
Question 1
What medical/clinical codes and classifications do you use in administrative transactions now? What do you perceive as the main strengths and weaknesses of current methods for coding and classification of encounter and/or enrollment data?
Response
We currently use ICD-9, CPT-4, HCPCS, Revenue Codes, DSM-IV, NDC, as well as DRG's in administrative transactions. The primary strength of these systems is that they are well accepted as the industry standard for claims submission as well as for reimbursement. The main weakness is in the lack of specificity of many of the coding formats. Although the more generic, less detailed methods of coding may increase coding compliance by many physician offices, they offer a poor clinical picture of the patient. As well as less accurate physician profiling results.
Coding compliance increases when reimbursement is directly linked to the coding used. For encounter claims, where a provider is reimbursed at a capitated rate regardless of the type of services performed, there is little incentive to submit claims no matter how simple the coding format. In a fee for service situation, where a provider is reimbursed for each service performed, there is an incentive to accurately code for each procedure; however, in most cases reimbursement is still not tied directly to the diagnosis, thus a more generic, less clinically correct diagnosis code may be selected. In the facility setting, where coding is critical to reimbursement, compliance is much higher.
Determining enrollment in the managed care environment is relatively easy since subscribers as well as covered dependents are individually enrolled. The indemnity environment uses a more passive approach, in that a member is not counted unless a claim has been received. Additionally, a member may be entered more than once if claims are submitted using different versions of the same name, e.g. Hank, Henry, Hank Jr.
Question 2
What medical/clinical codes and classifications do you recommend as initial standards for administrative transactions, given the time frames in the HIPAA? What specific suggestions would you like to see implemented regarding coding and classification?
Response
Although we support the migration to a more uniform standard, we feel this must be accomplished through a phased-in approach. There are major system implications with changing to any new coding format. For example, data bases will need to be redesigned, claims payment edits and software will need revisions, and electronic claims interfaces will need modifications, just to name a few. These changes are not unique to third party payers, health care software vendors and Provider billing systems will also require changes and enhancements to accommodate a new coding structure. In addition there will be complex training and documentation needs for all involved.
An additional concern is the timing of the proposed changes. Significant resources and expense have already been dedicated to making the necessary changes to move our systems into the year 2000. We have 80 million lines of code that will take the resources of approximately 200 people and $150 million to prepare for the year 2000. The added burden of simultaneous major coding changes may be more than most can realistically accommodate.
We also feel it would be necessary to have a National crosswalk from the current coding systems to ICD-10. Without a standard crosswalk, using historical claim data would be virtually impossible. Additionally, a crosswalk would be required in order to handle the conversion of claims currently in process to the new coding format. Without a nationally standard crosswalk we would be encouraging the creation of multiple crosswalks thus increasing inconsistency, defeating one of the main purposes for the proposal.
Question 3
Prior to the passage of HIPAA, the National Center for Health Statistics initiated development of a clinical modification of ICD-10 (ICD-10-CM), and the Health Care Financing Administration undertook development of a new procedure coding system for inpatient procedures (called ICD-10-PCS), with a plan to implement them simultaneously in the year 2000. On the pre-HIPAA schedule, they will be released to the field for evaluation and testing by 1998. If some version of ICD is to be used for administrative transactions, do you think it should be ICD-9_CM or ICD-10-CM and ICD-10-PCS, assuming that field evaluations are generally positive?
Response
Again, we are in favor of moving to ICD-10 but we feel an implementation date of 2000 is unrealistic.
Question 4
Recognizing that the goal of P.L.104-191 is administrative simplification, how, from your perspective, would you deal with the current coding environment to improve simplification, reduce administrative burden, but also obtain medically meaningful information?
Response
We need to establish incentives for accurate coding as well as claims submissions for encounters. Additionally we need to consistently capture services rendered to our members by other agencies, such as public health.
Question 5
How should the ongoing maintenance of medical/clinical code sets and the responsibility, intellectual input and funding for maintenance be addressed for the classification systems included in the standards? What are the arguments for having these systems in the public domain versus in the private sector, with or without copyright?
Response
We feel ongoing maintenance should be handled at a national level in the public domain. This would encourage uniform standards for coding with easy access to all. Currently the private competition fosters multiple standards resulting in higher costs due to marketing and redundant efforts. Multiple standards also cause coding fragmentation, misinterpretation and decreased reliability of data, as well as being administratively difficult to operationalize.
Question 6
What would be the resource implications of changing from the coding and classification systems that you currently are using in administrative transactions to other systems?
Response
As stated previously, there are major system implications with changing to any new coding format. For example, one difference is that ICD-9 is a five digit coding scheme, where as ICD-10 PCS is a seven digit coding scheme. Data bases will need to be redesigned, claims payment edits and software will need revisions, and electronic claims interfaces will need modifications, just to name a few. These changes are not unique to third party payers, providers will also need changes to their billing systems. Although we recognize the value of a standard coding scheme, the timing of this change, as well as the approach in implementation is of great concern.
Question 7
A Coding and Classification Implementation Team has been established within the Department of Health and Human Services to address the requirements of P.L. 104-191; the Team's charge is enclosed. Does your organization have any concerns about the process being undertaken by the Department to carry out the requirements of the law in regard to coding and classification issues? If so, what are those concerns and what suggestions do you have for improvements?
Response
There is concern that we find a balance between the academic needs for data collection and what we are reasonably able to process and store. More data is not necessarily better data. We need to be prudent in determining requirements that meet, but do not exceed our current and future needs.
The AAHP endorses the Subcommittee's charter and invites further discussion in any area of concern This concludes my statement. I would welcome questions. Thank you again for this opportunity.
James Cross, MD
Vice President and National Medical Director
Customer Services Administration
United HealthCare
8330 Boone Blvd.,
Suite 300
Vienna, VA 22182-2624
(703) 918-4083 (direct line)
(703)
918-4057 (fax)