The Delay of ICD-10-CM

  My father used to joke that his definition of “mixed emotions” was seeing your mother-in-law drive off a cliff in your new car. I had mixed emotions on March 31, when the US Senate approved a bill to delay national adoption of ICD-10-CM diagnosis codes by one year, but put only a temporary patch on the Medicare physician payment crisis. As a Today’s Wound Clinic subscriber, you have been collecting the excellent series of ICD-10 tools by my fellow board member Donna J. Cartwright that are helping to prepare you for the transition from ICD-9 and the addition of more than 70,000 new diagnosis codes. The earliest that ICD-10 will now be implemented is Oct. 1, 2015. Millions of dollars have been invested by electronic medical record companies, hospital systems, billing companies, and physician practices preparing for implementation. However, despite huge investments, everyone in the healthcare industry was not ready for this change to occur this year. Many had voiced concerns that the Centers for Medicare & Medicaid Services (CMS) had not performed the necessary testing of new codes within its system. The very public problems with the Obamacare website also had not engendered confidence that Medicare was prepared for another huge information technology (IT) rollout. The American Medical Association (AMA) has already voiced approval of the delay, but implementing ICD-10 has been yet another frustrating, confusing change to a system still in upheaval over the Affordable Care Act. One concern has been how Medicare Administrative Contractors (MACs) will implement coverage policies specified by diagnosis code. Presumably, MACs have to issue revised local coverage determinations (LCDs) for advanced therapeutics such as cellular and/or tissue based products for wounds and hyperbaric oxygen therapy to incorporate hundreds of new covered diagnosis codes. That is the only way providers will know with certainty which diagnosis codes are covered for a particular advanced therapy. Concern had also been raised as to the timing of new LCDs in relation to the ICD-10 rollout. Expect to see continued big changes with LCDs and advanced therapeutics.   Although CMS has estimated the delay of ICD-10 will cost the healthcare industry more than $1 billion, the news brought a sigh of relief to many physicians faced with the cost of upgrading their office IT in the face of a 24% pay cut. The “Protecting Access to Medicare Act of 2014” is actually the 17th time Congress has patched physician payments in the Sustainable Growth Rate (SGR). Enacted by the Balanced Budget Act of 1997, the SGR is a method used by CMS to control spending on physician services. The goal is to ensure the annual increase in expenses per Medicare beneficiary does not exceed the growth in gross domestic product. Each year, CMS sends a report to the Medicare Payment Advisory Commission, which advises Congress on the previous year’s expenditures. If those expenditures exceed the target, the report provides a conversion factor that will decrease payments for the following year in order to match the target SGR. However, this decrease in Medicare’s Physician Fee Schedule (PFS) can be suspended or adjusted by Congress, often referred to as “the doc fix.” Congress has implemented a temporary fix each year for the past 17 years. Without the patch passed by Congress March 31, physician payments would have been cut by 24% April 1. The problem is that the legislation only freezes Medicare physician payments through March 2015 and does not provide a long-term solution (a “permanent doc fix”) to this growing financial crisis within Medicare. The projected cost of SGR repeal legislation is between $140 billion (for SGR repeal alone) and $180 billion (to also extend other expiring provisions and make other desired changes). If Congress were to offset that price tag with commensurate reductions to Medicare spending, most stakeholders would see Medicare payments drop in one form or another. Each year that Congress delays repealing the SGR is another year of avoiding a “day of reckoning” for every other health industry stakeholder. Support had been growing in Congress for a bipartisan “permanent doc fix” that would have involved a complicated system of alternative payment models including quality and incentive programs based in part on (as yet to be determined) quality metrics. Although it did not pass this time, the draft legislation further emphasizes the importance of well-designed wound care quality measures.

Reimbursement Component

  The March 31 legislation also increases the Secretary of the Department of Health and Human Services’ (HHS) authority to revalue services reimbursed under the Medicare PFS. Specifically, Congress provides HHS with authority to collect detailed information from eligible professionals (or any other source) on time involved in furnishing services, prices for practice expense, overhead, etc. HHS is then given the authority to adjust practice expense relative to values based on this information. Congress also significantly expanded the basis under which individual codes could be subject to review under the “mis-valued code” review process. The specific criteria for review includes codes that have experienced the fastest growth, have low relative values, are billed multiple times for a single treatment, and account for a majority of spending under the PFS. This entire exercise is focused on giving primary care more money. This process is budget neutral, so if some services get “re-valued” up, others have to be “re-valued” down. In case you did not understand what I said, the process of valuing physician work (and thus payment for individual physician services), which used to be left almost exclusively in the hands of the AMA, can now be decided almost entirely by HHS. What do you think that will mean for our industry? Read the entire bill at https://beta.congress.gov/113/bills/hr4302/BILLS-113hr4302ih.pdf.