Congress Is About to Impose Another Unfunded Mandate on Doctors

John O'Shea, M.D.

John O’Shea is a senior fellow in the Center for Health Policy Studies at The Heritage Foundation. He has been a practicing general surgeon for more than 20 years, and was formerly a senior health policy advisor for the House Committee on Energy and Commerce.

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Congress has a habit of passing laws that cost physicians a great deal of money. During the past ten or more years congress has mandated expensive electronic health records, formation of expensive organizations (accountable care organizations), affordable care act, and less well known regulations ostensibly designed and marketed as cost saving methods. All the while these changes actually increase the cost of physicians to deliver the same care while increasing the volume of patients in order to compensate for this increase in overhead. The predicted improvement in efficiency has actually led to an average increase of one or mo re hours per day in the clinic.  The length of each patient encounter has increased several minutes, and at the end of the day sometimes one hour to complete records. Physicians have been turned into clerks.  In order to receive reimbursement physicians must bill electronically, and submit to a strict set of rules for meaningful use. The term meaningful use is a misnomer applying to data that can be analyzed by third  parties to be analyzed. But that is another story.

During the past several years a constant barrage of mandates, EHRs, Meaningful use, and others have increased work load for physicians and staff alike.  Hospitals are also involved in the changeover.  These demands have convinced many physicians to join groups, sell to a hospital, or retire. Overall, earlier retirement, or changing to part-time work is reducing the number of physician work hours, seeing patients.

"Doctors in their day-to-day practice already face a mound of federal regulations.

Now, starting Oct. 1, doctors will face a new unfunded mandate as they will be required to transition to a costly and complicated coding system for payment.

While the International Classification of Diseases (ICD) system was originally designed specifically for disease classification, since the 1980s, public and private payers alike have required that health care providers use the ICD-9 system when they file reimbursement claims. If, for instance, you go to the doctor’s for treatment for the flu, the doctor’s office will use the ICD code for flu when billing your insurance.

But unless Congress acts, the current ICD code will be replaced Oct. 1 by the vastly more complex ICD-10."

As many as 25 percent of physician practices are not ready for the new ICD-10 system.

"However, what about private practices, hospitals, state governments and the Centers for Medicare and Medicaid Services? Are they ready?

What seems to have been ignored, however, is the twenty of 28 stakeholders contacted by the GAO that had serious concerns about the Centers’ outreach and education efforts as well as the lack of adequate testing.

According to the congressional testimony of Dr. William Jefferson Terry, a practicing urologist in Mobile, Ala., as many as 25 percent of physician practices are not ready. Although this is a numerical minority, they cannot be ignored. Many of these practices are small, independent practices in rural locations with narrow operating margins. If faced with substantial reimbursement disruptions due to ICD-10, they may be forced to close their doors and they will not be easily replaced.

Moreover, as of November 2014, only two Medicaid programs had tested the system and another 23 are still updating their systems and not yet able to begin testing, according to Robert Tennant, director of health information technology policy for the Medical Group Management Association. If a state government isn’t ready for the transition, doctors will not be reimbursed for seeing Medicaid patients.

So, the benefits are vague and long-term, while the financial costs of investing in software programs, hiring and training new staff and productivity losses are real, immediate and quite large.

The reality of medical practice is that doctors do not treat codes; they treat patients according to the individual clinical condition. A doctor gets far more meaningful information from talking to the patient and consulting their medical record than they could ever get from the most detailed coding system. Therefore, doctors, who will bear the majority of the burden of transitioning to ICD-10 will see little, if any, benefit in treating patients on a day-to-day basis.

Given the disastrous roll-out of Obamacare, the already burdensome impact of the reams of federal rules and regulations imposed on doctors and other medical professionals, and the fact that many medical practices are not ready, Congress should be careful when considering imposing another unfunded mandate on the medical profession."

The administration of the Affordable Care Act  has taken five years to implement with a disastrous HIT failure of the national HIE web sites, and the recent announcement of the IRS snafu effecting millions of taxpayers. 

All total, nearly 1 million people may have delayed refunds due to bad forms 1095-A. It’s not an auspicious beginning for Obamacare’s big tax debut: this is the first year that Marketplace premiums are linked to tax returns.