Thousands of ways to get sick, but how to charge for it?

By Sarah Kliff / The Washington Post

In 1855, European statisticians gathered in the stately chambers of France’s Corps Législatif. There on the banks of the Champs-Elysees, they made the world’s first formal attempt to list every single way a person could die.

More than 150 years later, in a beige and windowless hotel ballroom thousands of miles away, hundreds of American medical coders are diligently chipping away at the exact same task. They’ve set out to master the nuances of the sprawling ICD-10, formally known as the Tenth Edition of the International Classification of Diseases.

“It gives me a heart attack just thinking about it,” Louisa Reolubin said with a sigh. The grandmother, at a three-day training for medical billers, uses green and pink highlighters to mark important new instructions on how to use the code set.

Reolubin is one of the country’s 186,000 medical coders who work in the back offices of hospitals. It’s her job to translate doctors’ scribbles into diagnosis codes. Those are sent to insurance companies, which use them to determine how much to pay hospitals for care.

For decades now, Reolubin — and the rest of the American health care system — has relied on an older version of this same medical compendium, ICD-9.

Thousands of new codes

With 14,000 codes, ICD-9 seems puny by comparison. The new manual explodes that code set to 68,000 much more granular and detailed terms to define — very exactly and specifically — what ails us.

Americans spend $2.8 trillion each year on medical care. These codes determine how that fortune — nearly one-fifth of the nation’s economy — gets divvied up among thousands of hospitals and the doctors who work there. It is how the federal government, and most private health insurers, assess a value for each patient visit.

The prospect of quadrupling the number of medical codes used in those calculations has touched off a heated debate over whether more specificity is an onerous layer of bureaucratic red tape or a valuable chance to better understand and treat complex medical conditions.

The codes in ICD-10 can seem absurd in their granularity, replete with designations for seemingly impossible situations.

There are different numbers for getting struck or bitten by a turkey (W61.42 or W61.43). There are codes for injuries caused by squirrels (W53.21) and getting hit by a motor vehicle while riding an animal (V80.919), spending too much time in a deep-freeze refrigerator (W93.2) and a large toe that has gone unexpectedly missing (Z89.419).

At a conference in San Francisco, the AAPC, an organization for billing and coding professionals, sold shot glasses inscribed with “F10.950” — the code for an unspecified alcohol-induced psychotic disorder. “Give ICD-10 a shot!” it says in blue script.

A regulatory burden?

Hospitals and insurers have fought the new codes, calling them a massive regulatory burden that will cost them billions of dollars to implement without improving patient care. For years, their protests succeeded: The federal government has twice delayed implementing the new code set, which was initially set for 2008.

ICD-10 proponents contend that adding specificity to medical diagnoses will provide a huge boon to the country. It will be easier for public health researchers, for example, to see warning signs of a possible flu pandemic — and easier for insurers to root out fraudulent claims.

“How many times are people going to be bitten by an orca? Probably not very many,” said Lynne Thomas Gordon, chief executive of the American Health Information Management Association. “But what if you’re a researcher trying to find that? You can just press a button and find that information.”

Gordon notes that the United States relies on the last edition, written in the 1970s. “We are so far behind we can’t compare data with other countries,” she said.

Still that doesn’t mean the transition will be easy. Hospitals and insurers say they have spent billions updating technology and training medical coders to make the change. And after watching the botched rollout of Healthcare.gov last year, industry officials have expressed concern that the government hasn’t done enough testing.

“The worst job you can have in health care right now is being a hospital administrator,” Angela Boynton director of ICD-10 adoption and training at UnitedHealth Group, who spoke at the San Francisco AAPC training session. “You’re shaking in your boots not just about training and testing but also that your entire in-patient payment system is being overhauled by Medicare.”

Gordon wears a lapel pin, sometimes, that says Z56.6. It’s the code, she explains, for “other physical and mental strain related to work.”

The ICD-10 manual is thick, about the size of a phone book. Printed in minuscule type on newsprint-thin paper, it weighs five pounds and includes more than 1,100 pages of medical procedures and ailments. The index alone is 421 pages.

Why so many codes?

Two key factors help explain the explosion in medical codes. First, ICD-10 adds in the ability to differentiate between left and right sides of the body. This can help insurers, for example, to root out fraud. A hip replacement on both the left and right side might not raise any red flags, but two hip replacements on the left side probably would.

Second, the new codes categorize whether a trip to the hospital was the first round of treatment or a subsequent encounter. This is important for reimbursement purposes, as first visits to the doctor tend to require more resources.

Whether this specificity improves the medical system is a subject of fierce debate in health technology circles. Opponents argue that the new larger set will slow productivity, making it more difficult for veteran billers to find the right code in a sea of parrot injuries and turkey bites.

Most other industrialized nations transitioned to ICD-10, which the World Health Organization published in 1992, more than a decade ago. The switch can take years because most countries come up with a slightly modified version of the code set that best suits their needs.

Cost and productivity lost

When Canada adopted ICD-10 in 2001, one study of a Toronto hospital system showed that productivity fell by half. Before ICD-10, medical coders could get through 4.62 charts in an hour. Right after the transition, that fell to 2.15 charts per hour. One year later, productivity had partially rebounded to 3.75 charts per hour.

“If you look at Canada’s transition, there were some longer term cost impacts that went well beyond the transition itself,” said Michael Nolte, chief operating officer of technology firm MedAssets. “There’s some evidence that there will be a long-term effect.”

One study funded by the American Medical Association estimated that it could cost doctors’ offices $56,000 to $8 million to transition to ICD-10, depending on the size of the practice. The AMA, one of the larger groups opposed the switch, is still petitioning the federal government to reverse course.

“Adopting ICD-10, while it may provide benefits to others in the health care system, is unlikely to improve the care physicians provide their patients and takes valuable resources away from implementing delivery reforms and health information technology,” the trade group wrote in a letter this week to Health and Human Services Secretary Kathleen Sebelius.

Others contend that the change in productivity won’t be as dramatic — that opthalmology coders could just stick to the ophthalmology section, for example, and don’t have any reason to get bogged down in codes about parrots. Health insurers don’t care if a bite came from a parrot or a turkey — they just want to know what type of medicine they’re paying for when the hospital treats it.

“No individual has to use the whole thing,” said Martin Libicki, a researcher at RAND Corporation. “If you’re working with an eye doctor, God knows why you’d learn the codes for broken legs. But if someone showed up with a broken leg, you would just look it up.”

Libicki authored a major RAND Corporation study in 2004 — when the Bush administration was first studying the transition — that estimated the potential benefits of switching to ICD-10 outweighed the costs by as much as $4.5 billion.

More specificity

Much of this comes from increased specificity in coding, which makes it easier to accurately pay hospitals for the care they provide and reduces opportunity for fraudulent billing.

“If you have ICD-10, you have an enormous increase in precision,” said Richard Averill, senior vice president of clinical and economic research at 3M Health Information Systems, recalled. He has worked in the medical coding world for decades, and his company has a key federal contract to help run the ICD-10 transition. “Yes, there’s an adjustment, but two years later you’ve gotten rid of a lot of that paper chase.”

In a more precise coding system, researchers see the potential to better track the quality of medical care that patients receive. Billers can denote whether a visit to the hospital is a first, second or later trip — which could indicate the severity of the condition.

Nearly everyone agrees that there is at least one compelling reason to switch to ICD-10: As new medical technologies have come online and demanded new codes, ICD-9 has run out of space. The capacity for noting cardiology procedures was exhausted in the early 2000s. That created a patchwork scenario, where new cardiology codes show up elsewhere in the code set, with little rhyme or reason.

“The consequence is very disruptive,” said Christopher Chute, a professor at the Mayo Clinic and expert on medical classification. “It’s like they’re renovating a city, and assigning addresses at random. That makes it a lot more difficult to find the right house.”