April 23, 2013

ICD-9: No Diagnosis-Based Reimbursement for Ambulatory Care

By Steve Arter

Have you ever wondered why we don’t use a diagnosis-based reimbursement system for ambulatory care?

The reason is ICD-9!

For years, the healthcare industry at large has been moving towards diagnosis-based reimbursement, and it makes sense. The concept is simple: figure out what treatment plans work best for specific problems, and identify a reasonable cost to administer treatment. Then pay based upon that. That is hard to do well using ICD-9, because ICD-9 does not allow us to identify variations of diseases or conditions with enough specificity to determine what treatment protocols work best in which situations.

Accountable Care Organizations (ACOs) are moving to diagnosis-based reimbursement and placing the decision on how to treat where it should be: with the doctors.

But frankly, I don’t see how it is possible for physicians to stay out of trouble participating in ACOs without ICD-10 and better documentation.

How does a physician determine what is acceptable compensation for a patient population when all diabetes patients have been coded as $250? This is just another example of how important improved documentation and ICD-10 is to healthcare.

As a problem-solver my whole life, I learned that you must have information, facts and a real understanding of a problem in order to solve it. That is what ICD-10 provides us, and it offers the physicians useful information. We have to have this to improve healthcare.

Now is where I sound off.

I know Denny Flint, and I sir am no Denny Flint. But I have to tell you, it really chafes my hide (and I am being as polite as I can here) to see how ICD-10 has been thwarted in this country, and maligned for all the wrong reasons. I recently got myself in hot water at a healthcare conference when I had the audacity to ask a panel of experts discussing how to reduce the cost of healthcare if they thought we would ever get to the point where we make healthcare decisions based on what was good for patients, and not based on our financial bottom lines. How can anybody with a lick of sense ask why healthcare costs so much in this country? I mean, really. Are you serious?

Everybody is making money on healthcare! That’s why. And if that’s what we want to do, then let’s at least be honest about it. ICD-10 would have been implemented in this country years ago if patient care was at the top of the agenda.

Examples of how ICD-10 benefits patients and providers are everywhere, just like such examples involving ACOs, and yet that is not what we have heard about ICD-10, for the most part. Instead we have heard horror stories about 70,000 codes when the reality is that a relatively limited number of elements of documentation and software actually can translate instantly into a very specific single code. This is the age of technology, and that is not only doable; it has already been done.

Some EHR vendors won’t provide this solution because it is too costly and difficult for them to make that change. That’s the bottom line. What will physicians get? A pick list! Pick lists are not a solution in your EHR when you have a 70,000-code system – they are a huge problem being touted as a solution. Most practices have trouble with an ICD-9 pick list, and that system has fewer than 14,000 codes. This is the type of issue that will take time to address prior to Oct. 1, 2014, so talks must be started now. I can give you dozens of other examples.

By basing actions on the bottom line and fighting ICD-10, providers have been led to fear (and even worse, ignore) ICD-10 in the hope that it will not be implemented. We have a little more than 500 days left until the deadline, however.

The real disservice that has been done is that there are hundreds of thousands of physicians who are still unaware of ICD-10 and the true impact it will have on every area of their practices (or the tremendous long-term benefits it can bring them). Consultants, too, are unaware, as are hospitals, billing services, imaging centers and labd. And yet every single one of these providers is absolutely dependent upon the codes that physicians provide them to get paid.

The financial future of those businesses is in the hands of the physicians. Insurance companies are ready for ICD-10 and have made it clear they will not pay nonspecific codes. It’s time to wake up and get serious about this. That is the message everyone needs to be adamant about expressing to physicians right now. They need to hear this from every corner of the industry.

The deadline is manageable, but the doctors must get started or the patients will suffer.

About the Author

Steve Arter is the chief executive officer for Complete Practice Resources.

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Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.