Medical Coding and Medicare Services

This is a guest post by Susan Gorgalini. Thanks to Susan.

While the United States has not yet come up with a specific date for requiring all health care operations to switch to ICD-10, the latest medical codes revision, it is coming. The previous deadline was the last quarter of 2013, and the next deadline will probably not be much further in the future. Amidst the flurry of activity to switch processes, systems and software over to prepare for the changes in the medical code system, some are concerned about the effect the new codes will have on Medicare.

Medical codes are used primarily for billing and communication purposes, making them an integral part of applying for Medicare coverage for specific treatments. In fact, The Center for Medicare and Medicaid Services is the organization making the primary decisions for the ICD-10 switch. This means that professional data billers are likely to be in high demand both directly before and after the switch has been made. The additional codes and revise process will mean many will require additional training and classes before they are ready to operate the new system. This training is just another obstacle in the implementation of this new program.

The Medicare process itself is deceptively simple. A patient enters a hospital with a specific condition. The hospital assigns this condition a code based on the appropriate classification system. This code defines what kind of disease it is, whether it qualifies as a disability under Medicare rules and how much fees will cost. Insurance companies use these codes to determine reimbursements. Medicare also incorporates them in its paperwork when authorizing claims payments. The result is a code that can be used across multiple organizations in order to speed up the claims process and ensure accuracy throughout the billing stage. However, as this system is radically different from ICD-9, the supposed simplicity evaporates, leaving behind the need for additional education and mounting costs.

A brief clarification for those wondering if their Medicare benefits will be altered: ICD-10-PCD  (Procedure Coding System) is only used in inpatient hospital claims. Other types of codes are used for claims originating in other areas of the health industry. Sometimes Medicare depends on codes such as HCPCS or CPT-4, which are not undergoing changes. Medicare also uses a variety of codes for drugs and unique Medicare-only codes.

When ICD-10 finally enters the American system, it will grow the complexity of the Medicare system greatly. There are 68,000 codes to be used in 10, as opposed to only 13,000 codes in the 9th version. This means Medicard processes will need to have the data storage space and system efficiency necessary to deal with exponentially more codes or slowdowns in payments will occur, followed immediately by slowdowns in cashflows and for the health industry as a whole. Some claims may suffer, too. The new code format, for example, classifies myalgic encephalomyelitis as a nervous system disease, while classifying Chronic Fatigue Syndrome in a vague “findings not elsewhere classified” code. The two conditions are the same, however, so a patient could find their benefits denied or changed because of the way a hospital decides to interpret the disease.

Of course, the goal of ICD-10 is to increase the accuracy of reporting and clear up any confusing code issues, which should have the long-term effect of making claims easier to process and clarifying what codes health care plans should use (under the current system, many use “unspecific condition” codes for certain claim types). The problems come during the difficult transition phase, which is expected to cost as much as $8 billion.

The weight of these additional costs threaten to break an overstretched and overwhelmed system however, as the world catapults into the digital age, it is necessary to drag the medical industry along. While the initial costs will be steep and the pain points in the process frequent, failure to do so may render a vital system obsolete and useless.