‘Doc Fix’ Bill Includes Key Changes to Diagnostic Coding

 ‘Doc Fix’ Bill Includes Key Changes to Diagnostic Coding

By Rebecca Adams, CQ HealthBeat Associate Editor

Physicians would get a reprieve from having to implement a new system of diagnostic codes used to get paid by insurers and the government under the “doc fix” bill that the House passed by voice vote on Thursday.

The legislation (HR 4302) prevents the Department of Health and Human Services from going ahead with the implementation of the ICD-10 code sets until Oct. 1, 2015 — a year after it is currently scheduled to be put into effect.

The transition has already been delayed once.

The American Medical Association, the American Academy of Family Physicians and many other medical provider groups have asked for more time. They argued that CMS officials have not allowed enough time to test the system, which would replace existing ICD-9 codes that has been in place for three decades. Even a small glitch in the rollout could potentially cause a billion-dollar backlog of medical claims, according to the AMA, which charged in a Feb. 12 letter that the change represents a fivefold increase in codes from the current 13,000 to 68,000.

Until now, Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner has insisted that the change would take place as scheduled, with no more delays.

She said earlier this month that “end to end” testing of the system with providers will be conducted over the summer and fall (See CQ HealthBeat, March 4, 2014).

Not every trade association was happy that the House approved a further delay. The Advanced Medical Technology Association, known as AdvaMed, called on the Senate to strike the delay when it acts on the measure on Monday. AdvaMed represents manufacturers of health information systems, diagnostic products and medical devices.

“We are disappointed that the legislation includes a further delay of the ICD-10 procedure coding system,” said JC Scott, AdvaMed senior executive vice president of government affairs. “ICD-10 is the next generation coding system that will modernize and expand the capacity of public and private payers to keep pace with changes in medical practice and health care delivery.”

Scott added, “It makes no sense to delay something that will provide higher quality information for measuring service quality, outcomes, safety and efficiency.”

Another provision affecting coding in the doc fix bill could save $4 billion over 10 years, according to the Congressional Budget Office. It would cut about 0.5 percent under certain circumstances from Medicare spending on physician services.

The provision builds on an initiative by the Centers for Medicare and Medicaid Services. Since 2008, CMS officials have taken a second look at payment recommendations put forward by the American Medical Association/Specialty Society Relative Value Scale Update Committee. The committee, known as the RUC, makes recommendations that significantly influence how much CMS decides to pay physicians.

The committee has a disproportionately high number of specialists on it, say some health policy experts, and that can affect the payment recommendations. Some say that specialty care in particular is over-valued.

CMS officials have tried in the past few years to more closely scrutinize the RUC recommendations.

The doc fix bill would give federal officials more ammunition and direction. The provision provides a long list of codes and code sets that HHS officials should analyze, including codes that have experienced the fastest growth and those that are often billed multiple times for a single treatment. Officials would also focus on those codes that have experienced substantial changes in practice costs recently.

The legislation further states that HHS officials should set an annual savings target of 0.5 percent of spending on physician services. If federal officials meet the goal, then they can redistribute the savings among physicians.

If they don’t, then HHS officials are supposed to cut spending until the target is met. The idea of taking money away gives a wide range of physician groups pause.

“The challenge is that this really would be money out of the system, versus redistribution within the system,” said Shawn Martin, American Academy of Family Physicians vice president for practice advancement and advocacy. “It’s less water in the swimming pool every year.”

The family physicians group would support the idea if it didn’t involve potentially reducing money for all physicians. If the target was met by shifting money within the system, then family and primary care doctors might benefit because CMS officials could take money away from specialty care and redirect it to primary care. Some health policy experts contend that specialty care is overvalued while primary care should get higher rates.

“We think it’s a worthy public policy goal but taking money away from physician services is not a good idea,” said Martin. “We’re caught between something we think is important and something really bad.”

The Alliance of Specialty Medicine flat-out opposes the provision. The specialists’ group lobbied hard against the language and listed it as a main reason for opposing the doc fix patch.

“The vast majority of physician services have been reviewed, resurveyed, and revalued, over the course of the last few years,” the group said in a March 25 letter to Democratic and Republican leaders in both chambers. “We do not believe this provision is necessary and therefore urged its elimination.”