Loves me Adobe Suite Photoshop.
From today's post on THCB: Does ICD-10 Pilot Forecast a Perfect Storm for Healthcare?
...The ICD was a tool designed by epidemiologists to get some handle on the prevalence of disease. It was always a blunt instrument, suffering from lack of reliability and of validity of the categories, a lack that was both temporal and geographic. Why anyone could ever imagine that such soft categorizations could be harnessed to capture more than the crudest measure of the experience of illness is baffling. And anyone who imagines that most illness experiences can be parsed into reliable and valid components is deluded into thinking that “health care” can be managed with the same tools that make Sam’s Club and Costco so successful. Stocking cans of vegetables is as concrete as illness narratives are abstract. All we will do trying to codify illness into its components is create cadres of coders and auditors, administrators and regulators, data generators and analyzers, and … so many that we’d be better off letting the inmates run the asylum...I'm reading Dr. Hadler's latest book The Citizen Patient and will be reviewing it shortly.
The ACA has much that is noble in intent and much that deserves celebration, not the least of which is universal access regardless of prior illness. But treating health care as a “free market” is delusional: There is no caveat emptor since the patient is insured for much that is unnecessary and is blamed for poor outcomes: If the can of vegetables is spoiled, Costco will replace it, apologize and take the issue up with its supplier. Try that in the US medical system. You’ll end up in a tort.
Unfortunately, I see no way to head off the impending chaos. I see escalating expense, blame and culpability, lay-offs and bankruptcies, all as the price of the billing scheme that drives the implementation of the ACA, a billing scheme that pivots on ICD-10.
There are other approaches that are far more rational and that take the patient and the patient’s experience of illness as the primary raison d’être:
For example:
Maybe such will be the Phoenix.
-Norton M. Hadler, MD
apropos, some context from Dr. Hadler regarding medical coding.
By 1970 all the pieces and players were assembled for the American health-care system to become more a cash cow (Figure 3) than a service profession. It has today become a herd of cash cows, particularly in the United States (Figure 4). The seeds of the trend were in the “reasonable cost” clause of the Medicare legislation. No longer was a sliding scale of fees-for-services supporting a cottage industry. The government and large employers were the de facto consumers of services. The compromise with the AMA to permit “usual and customary” fee-for-service charges is embodied today in yet another new age industry dedicated to defining “service” and setting “fee.” In 1966 the AMA first published Current Procedural Terminology (CPT), a set of codes designed to standardize billing for “Evaluation/ Management Services” (E/ M). The CPT Editorial Panel currently meets three times a year and releases new editions each October to reflect changes in practice. The current version lists numerical codes for more than 10,000 procedures and services.There is no reproducible evidence that the EHR decreases medical errors or increases compliance with “standards” for quality of care. Rather, the purveyance and servicing of EHR has joined coding as yet another profitable industry."
CPT is the most widely utilized medical nomenclature in reports to public and private health-insurance programs in the United States. In 1983 it was mandated for all billing under Medicare and Medicaid. CPT is also a profitable proprietary undertaking for the AMA, which sells all sorts of educational and other aids to assist in the coding exercise. After all, hospitals and physicians need to be able to accurately code for E/ M services or they risk loss of income or fraudulent billing accusations. “Coding” is a burgeoning job category that appeals to many, even to many in the nursing profession. There are courses offered in coding in all sorts of venues, including many junior colleges. Coders are checking on coders, and physicians are admonished if they do not “document” in their records for the sake of coding; they are less likely to be admonished if the content of the record communicates poorly about actual patient care. In fact, coding and billing are driving the design of the Electronic Health Record (EHR) in America. There is no reproducible evidence that the EHR decreases medical errors or increases compliance with “standards” for quality of care. Rather, the purveyance and servicing of EHR has joined coding as yet another profitable industry.
Although the costliness of health care had yet to take off (Figure 4), the inefficiency of paying usual-and-customary fees for each and every coded item was obvious early on, particularly for Medicare and Medicaid patients treated in hospital. It made more sense to pay a lump sum for a particular package of care, a “product” such as a total hysterectomy or an appendectomy. In the 1970s, the Health Care Finance Administration (HCFA), the predecessor agency to the CMS, contracted Robert Fetter, Ph.D., and John Thompson, Ph.D., of Yale’s School of Management and School of Public Health, respectively, to create a classification of such “products.” The result was 467 Disease-Related Groups (DRGs), the last of which was the “ungroupable” category. The intent was to replace cost-based hospital reimbursement with a prospective payment system based on a presumably homogeneous unit of care.
The system was tested in New Jersey between 1980 and 1983, after which it was adopted by the CMS. Many states have since passed legislation requiring the application of DRG-based billing to privately indemnified hospital care. As a prospective payment system, it was designed to provide incentives for efficient and standardized care. If the patient can be treated in hospital for a particular DRG at a cost less than the prospective payment, the hospital can keep the excess. But if the cost exceeds the allotment, the hospital eats it. Given the proliferation of procedures and the complexity of illnesses, the number of DRGs had escalated to 999 by 2007. Much of this relates to provisos for particularly complex or complicated “products.” By hook or by crook, coding was to make sure that the hospital continued to eat well enough to thrive. In 2008 the CMS declared that it would not cover all hospital-acquired conditions, particularly those deemed avoidable. This is a significant stride forward for competent care, since any degree of incompetence leads to codes that change the DRG in a direction that compromises the profitability of the not-for-profit hospital.
The DRG classification takes advantage of an internationally accepted system of disease classification that has its roots in the nineteenth century. The modern version is called the International Statistical Classification of Diseases and Related Health Problems (ICD), which is published by the World Health Organization (WHO) and widely used in the collection of mortality statistics and the like. The ninth edition, the ICD-9, allows for some 17,000 diagnostic categories and is used by the U.S. National Center for Health Statistics, which was instrumental in its development. The ICD-10 has been used since the mid-1990s— but not by the CMS, which adopted it only in the spring of 2013. ICD-10 is a classification system that allows for 155,000 different codes. One can well imagine how the proliferation of ICD codes will beget a proliferation of DRGs. The proliferation of codes is not simply a reflection of the proliferation of disease categories; some of the codes speak to the degree of severity and of complications. ICD-10 coding makes CPT coding look like child’s play. Hence, billing according to DRGs is a monumental task for all involved. Hospitals employ minions to find any nuance that might increase the complexity of the basic DRG in order to increase payment. The CMS outsources this billing to employ minions in the exercise of validating the charge package.
How much should any particular DRG cost? That brings us back to the “usual and customary” and “reasonable cost” roots. The hospital and hospital-supply industries are powerful and spared from most of the pressures of a true free market; they operate with a conspiratorial form of the “free market.” The same consumable or piece of equipment purchased from a laboratory supply house by an NIH-supported research laboratory can cost multiples more when purchased from a hospital supply house. The competition is set at a different level. The same is true for hospitals. Most hospitals will not publish their fee scale for room maintenance, nursing, and hospital services (such as X-rays or the running of operating rooms). Individual hospitals negotiate this fee schedule with individual private insurance companies. The hospital industry negotiates with the CMS, with provisions for the differences in cost in different geographic regions and with the help of lots of solicited and unsolicited “advice.” By law, hospitals must “accept” what the CMS pays even if it is less than their menu of prices for private insurers. Private insurance contracts have no such stipulation. Private insurers pass any bill in excess of the amount charged on to the patient. It’s a cozy arrangement that goes to great lengths to avoid transparency. There are even companies that help patients sort through their bills with the intent of finding overcharges that inflate co-pays. There is absolutely no doubt that this cozy arrangement is part of the explanation for the discrepant curves in Figure 4; the other part is overtreatment in the first place.
The best window into this cozy arrangement is the establishment of physician fees by the CMS. In the early 1990s, the CMS turned to the AMA for assistance with fine-tuning physician fees. This seems a logical extension of the role of the AMA in formulating CPTs. The AMA was to set aside “usual and customary” in favor of a new approach to a fair and accurate valuation of procedures and treatments by physicians. This approach was created by William Hsiao, professor of economics at the Harvard School of Public Health, and his multidisciplinary team of colleagues in the mid-1980s. They formulated and tested their Resource-Based Relative Value Scale (RBRVS) and submitted it to HCFA in 1988. In 1989 President George H. W. Bush signed the Omnibus Budget Reconciliation Act stipulating that the CMS base physician payments on the RBRVS. For every code in CPT, a fee was to be determined based nearly equally on physician experience and practice expense (recently, a dollop more was prorated for malpractice insurance). This is where the input of the AMA was sought. In 1991 the AMA established the Specialty Society RBRVS Update Committee (RUC) to advise the CMS as to the value of physician work and practice expense for the physicians providing any particular management/ evaluation service coded in CPT.
The RUC has twenty-nine members; twenty-three are appointees of major medical and surgical specialty professional societies and three are AMA appointees. All members sign confidentiality agreements before each meeting, which are closed to the public. The task is to calculate the Relative Value Units (RVU) for each CPT. Since the RUC is specialist dominated and heavily weighted to interventionalists, the RVU calculation is biased to value skills gained by lengthy training and the performance of tasks thought to be “stressful.” Cognitive specialties are given short shrift in this calculation. Furthermore, the process values effort over effect, which is contrary to the principles of evidence-based medicine. The incentive is to train to do more, even if the doing is ineffective. There is no incentive to be expert in informing medical decision making, particularly if the informing results in a patient’s desire to forego something with a high RVU. There is no incentive for higher quality performance or for caring for the more severely afflicted. RVUs are a perverse measure.
As is true of most areas of administration of the American health-care system, there is little transparency in the machinations that influence the CMS. That means there is little public debate. However, there is debate and controversy among the cognoscenti. The primary-care physicians who are not well represented on the RUC (except for the current AMA-appointed chair) and the cognitive specialists who are in the minority are crying foul. They want to be better valued. I am crying foul because this is an example of a public regulatory agency being controlled by the interests it is meant to regulate. The economists call this regulatory capture. I call it corrupt.
Hadler, M.D. Nortin M. (2013-04-01). Citizen Patient (H. Eugene and Lillian Youngs Lehman Series) (pp. 63-68). The University of North Carolina Press. Kindle Edition.
Well...We could relatively easily study the former assertion, but, doing so would not be cheap.
DECEMBER 19TH BREAKING NEWS
From: Sebelius, Kathleen (HHS/OS)That's pretty interesting. I certainly wish her well.
Sent: Thursday, December 19, 2013 11:19 AM
Subject: Important Staff Announcement
Colleagues,
I would like to announce that Dr. Karen DeSalvo, who currently serves as the City of New Orleans Health Commissioner and Senior Health Policy Advisor to Mayor Mitch Landrieu, will be the next National Coordinator for Health Information Technology here at the Department.
During her tenure, Dr. DeSalvo has been at the forefront of efforts to modernize the New Orleans health care system. Following Hurricane Katrina, for example, she led projects to increase access to care by augmenting the city’s neighborhood-based medical homes for low income, uninsured and other vulnerable populations in the New Orleans area.
Throughout her career, Dr. DeSalvo has advocated increasing the use of health information technology (HIT) to improve access to care, the quality of care, and overall population health outcomes –including efforts post-Katrina to redesign of the health system with HIT as a foundational element. She served as President of the Louisiana Health Care Quality Forum, the Louisiana lead for their health information exchange and regional extension center grants. She has also served as a member of the Steering Committee for the Crescent City Beacon Community grant.
As the New Orleans Health Commissioner she has made the increased utilization of HIT a cornerstone of the city’s primary care efforts and a key part of the city’s policy development, public health initiatives and emergency preparedness. Further, she has led the planning and construction of the city’s newest public hospital, which will have a fully-integrated HIT network. Her work as commissioner has led to positive changes to the way healthcare providers deliver care to their patients, improved accessibility and outcomes for patients, and improved the health of all New Orleanians. Dr. DeSalvo is a graduate of Suffolk University, Tulane Schools of Medicine and Public Health, Harvard School of Public Health.
Dr. DeSalvo’s hands-on experience with health delivery system reform and HIT and its potential to improve health care and public health will be invaluable assets to the Office of the National Coordinator and the Department. I would also like to take this opportunity to thank Dr. Jacob Reider, the Acting National Coordinator for his leadership of ONC during this time of transition. I am pleased she is joining our committed team, and ask you to join me in welcoming her to HHS when she starts on Monday, January 13th.
Sincerely,
Kathleen Sebelius
___
More to come...
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