Doctors win ICD-10 coding reprieve; compliance now due by 2013

Washington -- Physicians will have an additional two years to learn the next generation of diagnostic codes, thanks to a final Medicare regulation released Jan. 15, one of several key rules that the Bush administration sent out the door in its last days.

The Centers for Medicare & Medicaid Services had proposed in August 2008 that physicians, hospitals and payers adopt an updated version of the International Classification of Diseases code sets, ICD-10, by Oct. 1, 2011. Physicians use ICD-9 codes to list patient diagnoses on claims, while hospitals use them for diagnoses and procedures.

But physician organizations, including the American Medical Association, and health plans complained to CMS that a 2011 deadline did not allow enough time to upgrade practices and billing systems to use such a complex new code set, and the Bush administration relented. Under the new final rule, physicians and others will need to adopt ICD-10 by Oct. 1, 2013.

CMS also initially had proposed a deadline of April 1, 2010, for doctors to adopt the 5010 electronic transaction standards under the Health Insurance Portability and Accountability Act -- a prerequisite for moving to ICD-10. But that deadline has been extended to Jan. 1, 2012, under a separate final rule also issued Jan. 15.

The two rules are under review by the Obama White House, as are several other regulations issued in the closing days of the Bush administration. But because they are in final, published form, the new administration may only delay the effective date -- currently March 17 -- by up to 60 days and reopen the rules for comment. Any changes after that would need to come from a new rule-making process, congressional legislation or a legal challenge.

The extension of the ICD-10 compliance date is good news for physicians, said several physician organizations that pushed for a delay. "Efforts by the AMA and others to delay the ICD-10 adoption date have paid off," said Joseph M. Heyman, MD, chair of the AMA Board of Trustees. "The new date for this and the HIPAA transaction standards is more reasonable and will help physicians, coders and others prepare for a smooth transition."

But physicians and payers still will need to contend with upgrade costs. "We do have additional time, but this was decided pre-economic downturn," said Robert Tennant, a senior policy adviser for the Medical Group Management Assn. "Health plans have less money to update their software. We know it's going to be expensive and difficult."

MGMA estimates that the average cost of moving to ICD-10 for a three-physician practice will be $84,000.

But federal officials, hospitals and other proponents of the move say it must happen. The ICD-9 coding system is nearly 30 years old, and its approximately 16,000 procedure and diagnosis codes are insufficient to provide enough clinical information and allow for expansion, CMS said. ICD-10 has roughly 155,000 codes, including some 68,000 diagnosis codes. CMS said the newer system provides more data and detail within the codes and will facilitate more timely electronic claims processing by reducing requests for more information.

No more pay for 3 "never events"

On Jan. 15 CMS also finalized three national coverage determinations that will end Medicare pay for surgeries involving three major errors. The three NCDs -- surgery on the wrong patient, surgery on the wrong body part and the wrong surgical procedure -- are effective immediately, though instructions for processing claims with the errors will come later.

Physicians and hospitals generally agree that these three "never events" should not occur in a medical setting, and they support systems that would prevent them. But some continue to question using coverage determinations to address the issue.

The AMA opposes using the NCD process. "CMS should develop a clear payment policy outlining the circumstances under which surgery claims would not be payable by Medicare," AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, wrote in a Jan. 1 letter to CMS. "For example, if a physician failed to use commonly accepted patient safety practices, which resulted in surgery on a wrong body part, a Medicare carrier might deny partial or complete payment for the service claim."

Medicare claims-processing personnel do not have the expertise to make determinations about which surgical procedures were performed correctly, Dr. Maves continued. "We are very concerned that patients will wrongly be denied coverage of Medicare services due more to errors in judgment by contractors than errors by a surgical team."

Surgeons worry that language in the NCDs could be misconstrued by Medicare contractors. The wrong surgical procedure policy, for instance, "could be dicey if you change the procedure for a medically correct reason, but then someone wants to argue with you after the fact that you didn't do it for a medical reason," said John Clarke, MD, a professor of surgery at Drexel University in Philadelphia.

In another one of its final moves, the Bush administration started preparing Medicare for the 2010 restart of a competitive bidding program for durable medical equipment.

The agency launched the bidding program on July 1, 2008, in an attempt to lower DME costs, enhance quality and prevent fraud. But lawmakers pulled the plug on the 10-area demonstration after only a few days in operation.

Although the 18-month moratorium is in effect through the end of 2009, on Jan. 15 CMS released an interim final regulation that incorporates changes required by lawmakers before the bidding process can restart.

Certain DME items, such as rehabilitative power wheelchairs, will be excluded. Hospitals also will be included on an exception that allows physician practices to supply certain types of equipment to patients. Such items include crutches, blood glucose monitors and infusion pumps.

But despite the revisions, suppliers still steadfastly oppose restarting the program, in part because of the negative quality impact it could have on physician practices.

"This is like a closed-model HMO where you can only choose from a pool of selected suppliers who have won bids," said Walter Gorski, vice president of governmental affairs for the American Assn. for Homecare, which represents DME suppliers. Some physicians also have expressed concerns about an increase in workload that the competitive bidding program could bring, as well as potential delays in patient discharges.

On Jan. 23, the association sent a letter to Health and Human Services Secretary-designate Tom Daschle, urging him and other policymakers to rescind the program. The group maintained that the program amounts to price-fixing and will cause widespread access problems.