CMS To Revise Medical Coding System

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CMS plans to revise the medical coding system that physicians and hospitals use to bill health insurers, a move that many health care providers and health insurers support but that "could initially cause headaches for consumers and their doctors," the Wall Street Journal reports.

The revised system, called ICD-10, will increase the number of codes used to define various diagnoses and medical procedures by almost 10 times to 155,000 in an effort to account for the large number of medical advances that occur annually. The revised system will increase the number of codes used to define diagnoses to 68,000 from 13,000 and the number used to define medical procedures to 87,000 from 3,000.

According to CMS, the current system, which the U.S. adopted in the 1960s based on a framework developed by the World Health Organization, lacks space to expand, an issue that required the agency to group some new medical procedures with unrelated diagnoses. Karen Trudel, deputy director of the Office of E-Health Standards and Services at CMS, said, "The lack of space is a symptom of the fact that medical procedures are changing so quickly."

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CMS, which proposed the revised system in August, hopes to have the system implemented fully within the next three years. CMS estimates that adoption of the revised system will cost the health care industry $1.64 billion over 15 years.

Possible Effects

According to the Journal, the revised system, which will allow physicians to include more details on patient medical records, might "give a boost to efforts by government and industry to encourage the adoption of a nationwide electronic medical-information system." CMS officials also said that the revised system will help with efforts to track outbreaks of new diseases.

However, some health care industry officials have raised concerns that the revised system will result in increased billing errors. CMS said that the revised system will increase billing errors by as much as 10% initially, and a BlueCross BlueShield Association study estimated a 10% to 25% increase in errors within the first year. Alissa Fox, vice president for legislative and regulatory policy at BCBS, said, "The (three-year) time frame proposed is unworkable in the real world" (Zhang, Wall Street Journal, 11/11).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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