Triangle hospitals, doctors on edge as new code system prepares to go live

Backlogged insurance payments. Cash flow problems. Emergency bank loans.

That’s a foretaste of what doctors’ offices in the Triangle and around the country are anticipating next week, when the nation’s health care system makes its long-awaited switch to a new digital documentation system on Oct. 1.

Some fear a replay of the Affordable Care Act rollout debacle in 2013 that choked computer networks, delaying bills and claims for several months. Others recollect the end-of-century anxiety of Y2K, the Year 2000 computer bug that failed to materialize.

“We’re all hoping for the best and expecting the worst,” said Sharon Ahearn, practice manager at Triangle Pediatrics in Cary. “I have built up what I call my war chest. That’s to make sure we have enough working capital to see us through six to eight weeks of slow claims.”

The U.S. health care system is transitioning from an archaic disease classification system called ICD-9, which has been in use since 1979. In its place, doctors, hospitals and insurers will be required to use ICD-10, an updated list of diseases and procedures containing tens of thousands more terms.

The back-office medical coding switch is supposed to be invisible to patients, and shouldn’t affect patients’ costs or services, insurance officials say. But if claims processing grinds to a halt, the delays will trickle down to patients, said Lauren Ballew, director of operations at MSOC Health, a Chapel Hill company that provides management consulting services to medical practices.

“If claims aren’t processed in a timely fashion, patients won’t know what their portions are,” Ballew said. “It could be three to six months before a patient gets a statement.”

The technology transition has created a scenario in which everyone assures they’re prepared, all the while doubting the readiness of others. Medical providers are nervous about the capacity of insurers to process medical claims, while insurers say their main concern is the preparedness of doctors’ practices to submit claims properly.

A delay in claims payments would mean that medical practices and hospitals could have to wait several months to be paid for their services. Most large metropolitan hospitals have sufficient cash reserves to operate for several months, but doctors’ offices can’t operate indefinitely without income and would be forced to tap into savings accounts and take out loans.

“I think every consultant in the U.S. has told their practices to increase their line of credit – just in case,” said Nancy Coggins, practice administrator at Raleigh Pediatrics. “We tripled it.”

Blue Cross and Blue Shield, North Carolina’s largest health insurer, has been preparing for ICD-10 for five years, and has been processing dummy claims for the past 13 months to make sure they go through.

“We’ve had no problems or issues at all,” said Mo Coleman, Blue Cross’ ICD-10 transition program manager. “We don’t expect any significant delays.”

The biggest backlog Blue Cross is expecting: a spike in call volume from flummoxed physicians and medical practice managers struggling with ICD-10.

NCTracks, North Carolina’s payment processing system for Medicaid claims, has been testing dummy claims with over 500 entities and expects some doctors’ offices to struggle with the transition.

“Our biggest challenge is providers: Are they going to be ready Oct. 1?” said Joe Cooper, chief information officer at the state Department of Health and Human Services.

Bizarre codes

The switch to ICD-10 is mandatory for everyone covered by the Health Insurance Portability Accountability Act, or HIPAA, the 1996 electronic-billing and confidentiality law that covers Medicare, Medicaid, insurers, hospitals, doctors, clinics and labs. Dentists and pharmacies do not fall under ICD-9 and won’t be affected by ICD-10.

With ICD-10, the number of diagnoses will increase from 11,435 to 77,986, according to the N.C. Department of Health and Human Services. The number of procedure codes is exploding: from 2,805 to 82,453.

Small and rural medical practices, which lack resources, are the most likely to be unprepared, but many physicians worried the switch would be burdensome.

As a result of intensive lobbying by the American Medical Association, which represents physicians, the ICD-10 switch was delayed for two years by federal officials. The association sought to have Congress repeal the new codes, relenting only this year after the Centers for Medicare & Medicaid Services agreed not to deny Medicare payments for unintentional errors and making other concessions.

Under the new system, what used to be a single general ICD-9 code is being expanded to multiple specific codes, in some cases several dozen codes. In numerous cases, the new coding differentiates between left, right, middle, upper, lower, main, anterior, posterior, acute, generalized, chronic, and other such details.

But it doesn’t end there. The specificity of some codes relates to the unusual circumstances of an injury.

For example, the new coding system distinguishes bite injuries by the source: human, shark, snake, spider, squirrel, and so on. Websites have sprung up to document bizarre and outlandish ICD-10 codes, such as walking into a lamp post, being struck by a turtle, being sucked into a jet engine, or relationship problems with in-laws.

The reasons cited in favor of ICD-10 are precision, accuracy and comprehensive data collection that will ultimately improve medical care.

The Heritage Foundation, a Washington, D.C., think tank, contends that ICD-10 is burdensome, costly and contributes little to the prime directive of medicine: improving patient care.

Payment delays

The 10th revision of ICD, or the International Classification of Diseases system, has been in use in Europe for years; the World Health Organization is already developing the next iteration: ICD-11.

Hospitals have also been getting ready for years and training their “coders” – employees who submit claims to insurers – to accurately translate patient records and documentation submitted by doctors.

WakeMed Health and Hospitals in Raleigh currently gets bills out to insurers within three days, but when ICD-10 hits, officials are expecting the process will take seven to eight days. WakeMed officials expect further delays at the other end, where insurers process the claims, said Becky Andrews, WakeMed’s vice president for health information utilization management.

“We anticipate the payers to have some problems,” Andrews said. “I’m sure there will be some delays in getting paid.”

Rex Hospital in Raleigh has contract coders on call in case they’re needed, and it plans to set up an ICD-10 transition “command center” for the first week of the switch-over to help doctors and other staff with the new system. Rex also had to update more than 100 software systems to match up with ICD-10 nomenclature.

Rex officials expect a 25 percent productivity slowdown as the hospital’s coders have to ask doctors for additional information to submit clean claims. Once ICD-10 becomes habitual for hospital staff, the complexity of the new codes will slow down claims processing by 5 percent, a level that is not expected to recover, said Erin Moran-Gunter, Rex’s director of health information management, and director of the ICD-10 Program for UNC Health Care, which owns Rex.

“It’s a slowdown in cash,” Moran-Gunter said. “There will be a point where we quote-unquote stabilize, but I’m not sure how long that’ll be.”

This story was originally published September 26, 2015 at 2:00 PM with the headline "Triangle hospitals, doctors on edge as new code system prepares to go live."