Costs mount but jobs open up as health care adopts new medical codes
by: Margie Manning, Tampa Bay Business Journal
Business benefit costs are likely to rise as health care providers and insurers transition to the first major overhaul of the medical coding system in more than 30 years.
But the shift to new codes — the 10th version of the International Classification of Diseases, dubbed ICD-10 — also could create thousands of jobs and improve individual care and public health by providing much more specific information about medical conditions.
Doctors, hospitals and health plans use the codes to determine reimbursement for diagnoses and procedures. There are about 17,000 codes in ICD-9, the current system, including 4,600 that are used regularly.
That would jump to 155,000 codes, including about 50,000 used regularly, in ICD-10, said Amanda Patanow, vice president of Doctors Administrative Solutions, a Tampa company that works with physician practices.
In 2009, the Department of Health and Human Services said that all U.S. payers and providers must fully transition to ICD-10 by Oct. 1, 2013. While that may seem a long way off, physician practices that aren’t already deep into planning the switch may find themselves in trouble, Patanow said.
Adding up the costs
Insurers already are tallying the implementation costs.
A survey by the trade association America’s Health Insurance Plans of 20 health insurance plans revealed an average per-member implementation cost of about $12, ranging from $38 for small health plans with less than 1 million members to $11 for large plans with more than 5 million members. Aetna (NYSE: AET), the second largest commercial health insurer in the Tampa Bay market, estimated its ICD-10 project costs would be about $60 million in 2010 alone, according to November filing with the Securities and Exchange Commission.
Industry observers generally agree that some of the extra cost will be passed along to patients, plan members and employer groups in the form of higher service fees and premiums.
Coders will have to go through an enormous amount of education and retraining, Patanow said. “The amount of time that will have to be invested in making the initial transition and then manage any [claim] denials will create a very large impact on their resources and their practices, possibly acquiring additional full-time equivalents, which is a cost that provides quite a burden to many health care providers.”
A three-physician practice can expect to pay more than $83,000 while a 100-physician practice could pay more than $2.7 million, according to figures provided by Doctors Administrative Solutions.
Job opportunities
Almost 70 percent of the health information management professionals who responded to a survey by Kforce Healthcare, a subsidiary of Tampa-based professional staffing firm Kforce Inc. (Nasdaq: KFRC), said ICD-10 is the most challenging industry change facing them.
Fourteen percent of those surveyed said they had not yet decided whether they would leave the field when ICD-10 is implemented while 4.6 percent said they planned to transition out and 0.4 percent already had left when the survey was conducted in September. That could translate into 8,625 positions left vacant, Kforce said.
“There’s definitely going to be a shortage” of medical coders, said Michelle Martin, group vice president of health care at Kforce.
Kforce has trained about half of its core compliance team on ICD-10 and is working on a plan to train the 500 coders the company employs nationwide. The company also is working with clients who don’t have the resources to train their coding staff, particularly those that are focused right now on implementing electronic medical record systems to avoid penalties under the health care reform law.
The changes ultimately will improve health care, Patanow said. Public health experts will be able to more accurately pinpoint strains of flu or identify potential epidemics. On the individual level, the new codes will identify patient-specific disease states. Instead of simply coding a patient as having diabetes, the new codes can establish the patient has diabetes that can be controlled through exercise, diet and medication, making that patient a lower risk for an insurer.
“It’s my hope that the short-term costs are outweighed by the long-term gains,” Patanow said.