NEWS: Why does Health Care keep getting more Expensive?

As reported in the Review of Optometry, January 15, 2009 issue, by the Nachimson Advisors, a health information consulting firm, just one of the incoming regulatory changes in the works for medicine is set to cost the average small practice like ours $83,290. Mid size practices (10 docs) will spend $285,195 on the upgrade, and large practices (100 docs) will spend an estimated $2.7 million.

At issue is medical coding. Currently, we use ICD-9 codes which define and describe a doctor's findings which are then linked to the procedure/office visit codes that get billed to your insurance company. In short, ICD-9 codes supply the "reason" for testing and office time for which the doctor is trying to get reimbursed. The problem, according to the Department of Health and Human Services (HHS), is that sometime next year, they will run out of codes in the ICD-9 set.

So HHS is getting ready to adopt a new coding system, the ICD-10 set. The goal is to have it in place by October 2011. Insider analysts think implementing the new ICD-10 coding will be the most costly event medical practices will ever experience.

Here is how it pencils out for us. Rough calculations that include our current costs and average revenue-per-patient collected indicate that our practice would have to see our next 757 patients just to pay for the switch to ICD-10. Of course, like any business, medical practices will need to recoup the added cost of this new mandate to stay solvent. But unlike the regular market place, medical practices can't just increase the rates they charge insurance companies for their service and expect the insurance companies to pay the increase. They will have to make up the difference with their private pay patients, or eliminate other overhead or services which may reduce the quality of care you receive.

ICD-10 coding for diagnoses is just one of the oncoming challenges we have to prepare for. The procedure codes we have to use that describe the time and testing we do in order to get paid is also getting more complicated by orders of magnitude (which is its own subject for another time.) We now have level 2 procedure codes and PQRI codes (quality assurance coding) to include when we bill, just so we can get paid without penalty.

Sometimes I wonder if the increased complexities in coding and billing are just a calculated effort on the part of payers to trim costs by virtue of our reduced compliance as we struggle to figure out and pay for the new programme. Understanding the current system is already so complex that keeping payments coming properly is a non-stop battle. We feel like we have evolved our processes to the point that it works fairly well, and we follow the rules to the "T."

Patients already get frustrated as they try to understand why we code and bill as we do. I fear the new regulations will add more layers of confusion between doctors and consumers of medical care, further separating the two from the normal market forces that control buyer/seller relationships in other market settings.