It’s Groundhog Day for Medicare Rate Fix, ICD-10 Delay

“…Secretary of Health and Human Services may not prior to October 1, 2015 adopt The ICD 10 code sets as the standard codes.” H.R. 4302

Never say never. On March 27, the House passed H.R. 4302: Protecting Access to Medicare Act of 2014. This act, among other things, defers until April 1, 2015 the SGR (sustainable growth rate) mandated 24% reimbursement cut required by the Balanced Budget Act Of 1997 for physicians treating Medicare patients. 

SGR was birthed by the Balanced Budget Act of 1997. The intent was to control the growth rate of spending for a Medicare beneficiary by limiting it to the growth rate of the GDP.  Physician payments would be adjusted to meet this growth rate.

Displaying the wisdom of King Canute, famed for commanding the tide not to rise, Congress declared there would be a perpetual motion healthcare machine. Ever-increasing levels of care and services would be given to beneficiaries while the amounts spent would be fixed to GDP growth. The market basket of goods changed for the benefit of our patients but to the detriment of providers.

We no longer treat heart attacks with oxygen, IM Demoral and toxic Lidocaine drips. The standard of care has evolved to interventional cardiac catheterization with door to balloon time times (D2B) of 90 minutes or less. Which approach do you think costs more per Medicare beneficiary?

Kicking the can
The AMA has long campaigned for the total repeal of this pet rock economic idea. The Congressional response has been to kick the can down the road. In the past 11 years there have been 17 temporary fixes (a.k.a. the “doc patch”), deferring the implementation of the SGR. Everyone knows that SGR implementation would see a stampede of physicians out of Medicare.

As an emergency physician I have seen firsthand the increasing trend for physicians not to participate in Medicare. The increasing stringency of Meaningful Use standards has not helped Medicare retention.  SGR implementation would turn healthcare in the United States into a smoking hole.

Now life gets interesting. Attached to HR 4302 was a delay of the “two midnight rule” and language deferring transition to ICD-10 codes till October 2015.  Surprisingly the response to these additions has been mixed and contradictory.

The American Medical Association (AMA) among others has petitioned for a delay in the ICD-10 implementation deadline of October 2014. So they should naturally support HR 4302, right? Not so fast.

The AMA says it opposes the bill because it seeks a permanent fix to the larger reimbursement issue. The AMA had campaigned for total repeal of the SGR rather than more can kicking.

Others say ICD-10 has vast savings potential and that more stalling comes at a price. The American Health Information Management Association (AHIMA), for example, argues the delay would cost 1 to 6.6 billion.

Senate to vote on delay
CMS administrator Marilyn Tavernner has been adamant there will be no further delays of the October 2014 implementation date. But it may be out of her hands. The bill reportedly has bi-partisan support and the Senate is expected to consider the bill and vote on it by end of day today, March 31.

What to make of this? How should we respond?

I suspect the bill will pass. The “doc patch” will assuredly pass and most likely the ICD-10 delay. There is always a possibility that procedurally the “two midnight” and ICD-10 change could be extracted from HR 4302.  Despite Ms. Tavernner’s assertions, I also suspect quietly that the administration would like to see the transition to ICD-10 delayed. Consider the timing. The November elections occur immediately after the ICD-10 go live. We have already seen potentially abrasive mandates postponed till after the election, and a congressional delay of ICD-10 would not be without benefit for those standing for office.

Should ICD 10 be delayed for a year, the prudent course of action will be to press ahead with the transition as though October 2014 was still the effective date for the codes.  An extended period of parallel coding, although expensive, ought to mitigate any revenue pothole in the transition.

Those with IT experience are well aware that latent defects abound in even the most rigorously designed and implemented systems. Procedural and diagnostic codes are embedded diffusely and obscurely throughout the delivery of healthcare. An organization that has implemented ICD 10 in October 2014 will now enjoy the year cushion to get it right.  I simply hope this bonus year is enough time.

After all the systems are designed and written by humans.

Frank X. Speidel, MD, MBA, FACEP is Chief Medical Officer for Healthcare IT Leaders and former CEO of St. Luke’s Hospital at the Vintage, Houston, TX.

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