ICD-10: Cost or Benefit in Cancer Payment?

regulatory and reimbursement ICD-10: Cost or Benefit in Cancer Payment? by Roberta L. Buell, Managing Partner, Sausalito Healthcare Partners, and Principal Content Development, E-Expert Reimbursement Partners OK, you ve heard the rumors and now it is a reality. The government has finally forced us to adopt a massively expanded set of diagnostic and procedure codes. They say that it will accommodate a host of new diagnoses and procedures, provide greater detail on electronic transactions, and support quality and pay-for-performance data collection. 47

time; thus, our statistics do not match anyone else s in the world. ICD-10 supports more effective compilation of national mortality and morbidity statistics, along with global statistics because our data can be merged with others. This will include stats from Canada, the United Kingdom, Germany, France, Russia, Brazil, China, and Australia. For cancer tracking, we will have a much slicker global surveillance system, because we do not capture tumor registry information (which is now ICD-10) in most community cancer centers. So we will know a lot more about the incidence of cancer and that s a good thing. The Centers for Medicare & Medicaid Services (CMS) has published the final rule adopting ICD-10-CM and ICD-10- PCS as medical data code sets under the Health Insurance Portability and Accountability Act (HIPAA), replacing ICD-9-CM. The final rule requires an ICD-10 compliance date of October 1, 2013, providing a two-year extension from prior published notices. Like previous experiences with Y2K, HIPAA, the Resource-Based Relative Value Scale, evaluation and management coding, and national provider identifiers, this set of changes will be a systematic change for payor systems and require substantial programming, procedural, and process flow overhauls. ICD-10 will have significant impacts on many payor activities including data processing, claims administration, customer service, reimbursement, provider networking/contracting, medical policy management, and retrospective analysis. It will also require a massive staff educational effort. You are either going through or about to go through a horrific amount of work. So is ICD-10 worth all this? Whom does it benefit? How expensive is it? How will it impact medical oncology, and will it help you control drug costs? ICD-10-CM Does Benefit Some Segments Let s all take a breath here and look at the facts. The International Classification of Diseases (ICD) is the international standard diagnostic classification for many health management purposes. ICD-10 has been used in other countries for a long In the U.S., the National Center for Health Statistics developed the clinical modification of ICD-10 for classifying morbidity for use in the U.S. healthcare industry. Nowhere does it say that it should be used for payment. The U.S. modification, ICD-10-CM, supposedly provides the greater clinical and administrative depth needed for healthcare payment, reporting, and analytics. That is debatable in some areas. CMS says transition to ICD-10 is necessary because the ICD-9, used since 1979, is obsolete. ICD-9 cannot accommodate additional codes for new diagnoses and procedures and does not provide the amount of detailed information needed to support valuebased healthcare purchasing and other initiatives, officials say. CMS says the increased detail and specificity of ICD-10 will significantly improve coding of primary care encounters, external causes of injury, mental health disorders, and preventive health. ICD-10 also provides more detail on socioeconomic issues, family relationships, ambulatory care conditions, problems related to 48 managedcareoncology Quarter 3 2009

lifestyle, and the results of screening tests. Notice that CMS does not state that it will improve the diagnosis and treatment of cancer. Additionally, in the U.S., CMS, in conjunction with 3M Corporation, developed the related coding system, ICD-10-PCS, to capture information on inpatient medical procedures. This computer-friendly procedural coding system will replace ICD-9-CM, Volume 3 in hospitals. ICD-9 procedural coding is antiquated, nonspecific, and not easily automated. Not only that, it is running out of code numbers! ICD-10- PCS is a huge improvement but does nothing for outpatient and nonhospital services. For those, current procedural terminology (CPT) will still rule. But ICD-10-CM Is Costly to Payors and Providers Physicians, health insurance companies, claims clearinghouses, health information system vendors, and other stakeholders will need to transition from the current ICD-9 code set, which includes 17,000 codes, to ICD-10, which has some 155,000 codes. That boggles the mind in terms of an educational effort. Approximately 875,000 providers bill Medicare, and that is only one payor! Who is going to educate all these folks? And let s consider the education for payors, government, and ancillary groups like specialty pharmacies, benefit managers, utilization review, and others. through 2023. That total includes $137.2 million in system changes for providers, $10.98 million in lost productivity in physician practices, and $82.2 million for physician training. The study, conducted by Nachimson Advisors, available through the Medical Group Management Association, estimates the typical 10-physician group practice would spend $285,235 implementing the new mandate. 2 These expenses include: Training, $4,745 New claim form (superbill) software, $9,990 Business process analysis, $12,000 Practice management and billing system software upgrades, $15,000 Increases in claim inquiries and reduction in cash flow, $65,000 Increased documentation costs, $178,500 For the average community cancer group, a three-physician practice, the total cost to implement ICD-10 is estimated to be $83,290. This is a number that few cancer practices can afford right now. Not only are they financially constrained, they are also busy implementing electronic medical records (EMRs), e-prescribing, HIPAA 2 (ANSI X12 5010), and CMS s Physician Quality Reporting Initiative (PQRI). Here is a further breakdown of costs. According to the Nachimson study, in requiring five times as many codes as the previous code set, the implementation of ICD-10 would impact every aspect of business operations for physician practices and clinical laboratories and produce significant added costs in six key areas: 1. Staff education and training. Nachimson Advisors estimates the staff education and training costs associated with an ICD-10 mandate would range from $2,405 for a small practice to $46,280 for a large practice. 2. Business process analysis of health plan contracts, coverage determinations, and documentation. Nachimson Advisors estimates the business process analysis costs associated with an ICD-10 mandate would range from $6,900 for a small practice to $48,000 for a large practice. 3. Changes to superbills. Nachimson Advisors estimates the changes to new claim form software (superbills) costs associated with an ICD-10 In its proposed ruling for this change 1, CMS has estimated that implementation of ICD-10 will cost $1.64 billion, with a range of $110 million minimum to $274 million maximum to change payors information technology (IT) systems during the period from 2009 49

mandate would range from $2,985 for a small practice to $99,500 for a large practice. 4. IT system changes. Nachimson Advisors estimates the IT costs associated with an ICD-10 mandate would range from $7,500 for a small practice to $100,000 for a large practice. 5. Increased documentation costs. Nachimson Advisors estimates the increased documentation costs associated with an ICD-10 mandate would range from $44,000 for a small practice to $1.785 million for a large practice. 6. Cash flow disruption. Nachimson Advisors estimates the cash-flow disruption costs associated with an ICD-10 mandate would range from $19,500 for a typical small practice to $650,000 for a typical large practice. The RAND Corporation has estimated that ICD-10 implementation will cost between $425 million and $1.15 billion in one-time costs for system changes and training for physicians, other providers, payors, and vendors, plus between $5 million and $40 million per year in lost productivity. 3 Bottom line: Whatever study you look at, this change will cost a bundle. The question is: Will it expedite cancer diagnosis, treatment, and most importantly, payment? ICD-10 Coding and Cancer When talking about ICD-10-CM, I always like to provide this sample of coding specificity in ICD-10 to my audience. Remember that the specificity reflected in these codes has to be specifically documented in the medical record. Here is the multiplicity of codes for being struck by an object during a sporting event: W2100xA W2100xD W2100xS W2101xA W2101xD W2101xS W2102xA W2102xD W2102xS W2103xA W2103xD W2103xS W2104xA W2104xD W2104xS W2105xA W2105xD W2105xS W2106xA W2106xD W2106xS W2107xA W2107xD W2107xS W2109xA W2109xD W2109xS W2111xA W2111xD W2111xS W2112xA W2112xD W2112xS W2113xA W2113xD W2113xS W2119xA W2119xD W2119xS W21210A W21210D Struck by hit or thrown ball, unspecified type, initial encounter Struck by hit or thrown ball, unspecified type, subsequent encounter Struck by hit or thrown ball, unspecified type, sequela Struck by football, initial encounter Struck by football, subsequent encounter Struck by football, sequela Struck by soccer ball, initial encounter Struck by soccer ball, subsequent encounter Struck by soccer ball, sequela Struck by baseball, initial encounter Struck by baseball, subsequent encounter Struck by baseball, sequela Struck by golf ball, initial encounter Struck by golf ball, subsequent encounter Struck by golf ball, sequela Struck by basketball, initial encounter Struck by basketball, subsequent encounter Struck by basketball, sequela Struck by volleyball, initial encounter Struck by volleyball, subsequent encounter Struck by volleyball, sequela Struck by softball, initial encounter Struck by softball, subsequent encounter Struck by softball, sequela Struck by other hit or thrown ball, initial encounter Struck by other hit or thrown ball, subsequent encounter Struck by other hit or thrown ball, sequela Struck by baseball bat, initial encounter Struck by baseball bat, subsequent encounter Struck by baseball bat, sequela Struck by tennis racquet, initial encounter Struck by tennis racquet, subsequent encounter Struck by tennis racquet, sequela Struck by golf club, initial encounter Struck by golf club, subsequent encounter Struck by golf club, sequela Struck by other bat, racquet, or club, initial encounter Struck by other bat, racquet, or club, subsequent encounter Struck by other bat, racquet, or club, sequela Struck by ice hockey stick, initial encounter Struck by ice hockey stick, subsequent encounter 50 managedcareoncology Quarter 3 2009

W21210S W21211A W21211D W21211S W21220A W21220D W21220S W21221A W21221D W21221S W2131xA W2131xD W2131xS W2132xA W2132xD W2132xS W2139xA W2139xD W2139xS Struck by ice hockey stick, sequela Struck by field hockey stick, initial encounter Struck by field hockey stick, subsequent encounter Struck by field hockey stick, sequela Struck by ice hockey puck, initial encounter Struck by ice hockey puck, subsequent encounter Struck by ice hockey puck, sequela Struck by field hockey puck, initial encounter Struck by field hockey puck, subsequent encounter Struck by field hockey puck, sequela Struck by shoe cleats, initial encounter Struck by shoe cleats, subsequent encounter Struck by shoe cleats, sequela Struck by skate blades, initial encounter Struck by skate blades, subsequent encounter Struck by skate blades, sequela Struck by other sports footwear, initial encounter Struck by other sports footwear, subsequent encounter Struck by other sports footwear, sequela Do we need a coding system that supplies us with so much information? Well, personally, I cannot see the utility of this information for any reason; however, in this article, we are interested in cancer. So let s look at breast cancer coding, which is now coded using ICD-9-CM to 174.x and 175.x (where x stands for digits), consisting of 11 codes. Here is ICD-10: C50011 C50012 C50019 C50021 C50022 C50029 C50111 C50112 C50119 C50121 C50122 C50129 C50211 C50212 C50219 C50221 Malignant neoplasm of nipple and areola, right female breast Malignant neoplasm of nipple and areola, left female breast Malignant neoplasm of nipple and areola, unspecified female breast Malignant neoplasm of nipple and areola, right male breast Malignant neoplasm of nipple and areola, left male breast Malignant neoplasm of nipple and areola, unspecified male breast Malignant neoplasm of central portion of right female breast Malignant neoplasm of central portion of left female breast Malignant neoplasm of central portion of unspecified female breast Malignant neoplasm of central portion of right male breast Malignant neoplasm of central portion of left male breast Malignant neoplasm of central portion of unspecified male breast Malignant neoplasm of upper-inner quadrant of right female breast Malignant neoplasm of upper-inner quadrant of left female breast Malignant neoplasm of upper-inner quadrant of unspecified female breast Malignant neoplasm of upper-inner quadrant of right male breast 51

C50222 C50229 C50311 C50312 C50319 C50321 C50322 C50329 C50411 C50412 C50419 C50421 C50422 C50429 C50511 C50512 C50519 C50521 C50522 C50529 C50611 C50612 C50619 C50621 C50622 C50629 C50811 C50812 C50819 C50821 C50822 C50829 C50911 C50912 C50919 C50921 C50922 C50929 Malignant neoplasm of upper-inner quadrant of left male breast Malignant neoplasm of upper-inner quadrant of unspecified male breast Malignant neoplasm of lower-inner quadrant of right female breast Malignant neoplasm of lower-inner quadrant of left female breast Malignant neoplasm of lower-inner quadrant of unspecified female breast Malignant neoplasm of lower-inner quadrant of right male breast Malignant neoplasm of lower-inner quadrant of left male breast Malignant neoplasm of lower-inner quadrant of unspecified male breast Malignant neoplasm of upper-outer quadrant of right female breast Malignant neoplasm of upper-outer quadrant of left female breast Malignant neoplasm of upper-outer quadrant of unspecified female breast Malignant neoplasm of upper-outer quadrant of right male breast Malignant neoplasm of upper-outer quadrant of left male breast Malignant neoplasm of upper-outer quadrant of unspecified male breast Malignant neoplasm of lower-outer quadrant of right female breast Malignant neoplasm of lower-outer quadrant of left female breast Malignant neoplasm of lower-outer quadrant of unspecified female breast Malignant neoplasm of lower-outer quadrant of right male breast Malignant neoplasm of lower-outer quadrant of left male breast Malignant neoplasm of lower-outer quadrant of unspecified male breast Malignant neoplasm of axillary tail of right female breast Malignant neoplasm of axillary tail of left female breast Malignant neoplasm of axillary tail of unspecified female breast Malignant neoplasm of axillary tail of right male breast Malignant neoplasm of axillary tail of left male breast Malignant neoplasm of axillary tail of unspecified male breast Malignant neoplasm of overlapping sites of right female breast Malignant neoplasm of overlapping sites of left female breast Malignant neoplasm of overlapping sites of unspecified female breast Malignant neoplasm of overlapping sites of right male breast Malignant neoplasm of overlapping sites of left male breast Malignant neoplasm of overlapping sites of unspecified male breast Malignant neoplasm of unspecified site of right female breast Malignant neoplasm of unspecified site of left female breast Malignant neoplasm of unspecified site of unspecified female breast Malignant neoplasm of unspecified site of right male breast Malignant neoplasm of unspecified site of left male breast Malignant neoplasm of unspecified site of unspecified male breast 52 managedcareoncology Quarter 3 2009

This specificity in coding would be fine if the information provided was useful. But the major problem is that this take on breast cancer does not supply a payor with additional information over and above the original 11 codes now used to pay a chemotherapy claim. The place in the breast is not related to how you treat the cancer. You may have heard that hospital-based tumor registries use ICD-10 to classify cancers. This is true, but they also use histology codes from ICD-0 to describe tumor histology, such as intraductal cancer. Just like we do not use the morphology (M-codes) in ICD-9, there are no plans to use ICD-0 with ICD-10 at least as far as we know right now, according to the crosswalks supplied by CMS and the Centers for Disease Control and Prevention. So for many solid tumors, we will know more about location, but the same or less about tumor behavior. For cancers in the blood, the results are mixed. In lymphomas, ICD-10-CM will give payors more information than they have now to pay drug claims by specifying more about the cell type. For example, follicular lymphoma is one type of lymphoma under the general heading of nodular lymphoma (202.00 to 202.08). Under ICD-10, this will be coded more specifically with follicular lymphoma codes (C820x through C829x, where x is body area), and cell types like large cell are described within these code sets. This has some importance in claim payment because some agents are tied to specific cell types. used after first-line therapy, such as second, third, whatever. The relapsed code descriptor is not in the 2009 version of ICD-10 but is in the 2009 version of ICD-9. This has real implications for drug payment, unlike many of the examples shown herein. So ICD-10: Maybe Not the Ultimate Solution to Pay Cancer Claims To pay drug claims accurately, a payor should know the cancer and cell type, the stage of the cancer, the histological grade (if applicable), hormone status for breast and prostate, and whether the patient has had other drug therapies. The bad news is that we are going to implement a very expensive and time-consumptive system without generous benefits. In cancer practices, ICD-10 does not greatly improve the distribution of the information that you need to pay claims efficiently and that providers need to get paid quickly enough to pay for their drugs. The good news is that there will be other ways to get this information in the future. As part of the stimulus package, the government will pay practices a stipend to implement meaningful use (not yet defined) of health information technologies, including EMRs. In 2010, CMS has proposed implementing EMR extraction for some components of its PQRI reporting. The future of cancer billing may be headed our way. At some point, data extracted from EMRs could be used to pay cancer claims accurately and quickly. This could also eliminate the need for the chemotherapeutic agent prior authorizations that managed care organizations seem to be so fond of these days. Certainly, in cancer, adopting a coding system that is not a claims processing improvement and does not represent an unaffordable cost to the practice would be preferable. We have until 2013 to consider our options. One area that is less specific is leukemia and myeloma (203.xx to 208. xx). These codes now have a fifth digit for without mention of remission, in remission, or in relapse. The relapsed code will tell you if the drug is being References 1. Centers for Medicare & Medicaid Services. HIPAA administrative simplification: modification to medical data code set standards to adopt ICD-10-CM and ICD-10-PCS. www.cms.hhs.gov/transactioncodesetsstands/downloads/icd%2010%20display.pdf. 2. Medical Group Management Association. New study finds ICD-10 mandate hardship for health care providers. www.mgma.com/press/article.aspx?id=22612. 3. Libecki M, Brahmakulam I. The costs and benefits of moving to the ICD-10 code sets. Pub. No. TR-132-DHHS. Rand Science and Technology; 2004. www.rand.org/pubs/technical_reports/2004/rand_tr132.pdf. 53