Gerald Harmon, a member of the American Medical Association’s Board of Trustees, owns a small, family medical practice in coastal South Carolina.  A doctor for more than 20 years, his practice is among the many private, independent doctor’s offices threatened with financial insolvency because of an impending unfunded government mandate.

Doctors have just over 90 days to comply with a regulation that could cost between $56,000 and $8 million and requires they transition to a costly and complex disease coding system known as ICD-10 interlinked with physician health care reimbursement by Oct. 1. Harmon said only 11 percent of practitioners are prepared.

“At a time when physicians are asked to do quite a lot of things that take them away from patient care, they’re now being face with this unfunded mandate in the ICD-10, which carries with it a significant both financial and administrative burden,” John O’Shea, a senior fellow in health policy studies at The Heritage Foundation, said today.

O’Shea joined Harmon and John Grimsley, a medical student at Georgetown University, to discuss the impact of the regulation Wednesday during an event at The Heritage Foundation.

The mandate stems from the International Classification of Diseases (ICD), which was originally established as a uniform set of codes for physicians worldwide to define and report diseases, enabling the World Health Organization to track global health trends.

In the 1980s, the Department of Health and Human Services required health care providers to use the ninth revision of the system, ICD-9, when filing claims to both public and private insurance companies. Though ICD was originally established solely for data collection, this mandate linked the coding system to health care reimbursement.

Today, if a doctor doesn’t use ICD-9 when filing insurance claims, he or she will not be paid for their services.

“I’ve been a practicing surgeon now for about 25 years and during all that time I have never once even thought about consulting the ICD coding system to help me decide what was wrong with a patient or to aid me in deciding how to treat a patient,” O’Shea said. “The billing process has nothing to offer to the clinical realm or the care of the patient.”

Under federal law, doctors are now required to overhaul this system to implement the even more complex ICD-10, the newest revision.

The ICD-10 system increases the total number of codes fivefold, from more than 14,000 to nearly 69,000. The panel said this increase creates a significant burden.

Currently, any time a doctor meets with a patient, the doctor must record the diagnosis and any subsequent procedures in the patient’s medical record. Medical coders then translate the doctor’s notes into ICD-9 medical codes, which are then sent to insurance providers so the doctor can be paid.

But, as insurance companies can deny a reimbursement claim, they often cite incorrect diagnostic codes as reason for denial. Physicians may appeal the denial, but this often causes delays in their pay.

To adjust to the additional codes and make the transition to ICD-10, physicians must pay for updated software and staff training to use it, along with hiring information technology consultants, additional medical coders and administrators to adjust to the new requirements.

Harmon cited American Medical Association data that found the cost of the switch to ICD-10 could range from $56,000 for a smaller practice to more than $8 million for a larger practice.

“Considering the fact that ICD-10 will cause severe administrative burdens and possibly decrease reimbursements, it’s likely that independent, private practitioners will have a very difficult time in this transition. They may very well choose to retire or simply join a large practice or hospital system,” Grimsley said.

To Harmon, cost is not the only burden. He said even under the current system, medical coders call him to clarify which code they should use, taking away his time with patients.

“If you throw five times as many codes in the new ICD-10, I can only imagine the disruption in my office time with my patients even if I’m not the one doing the coding,” he said.

Proponents of the transition say ICD-9 data is outdated and inconsistent with current medical practices and argue an updated system will improve research leading to better patient care.

O’Shea said he would rather see an investment in improved research tools, such as clinical patient registries that would lead to better clinical research.

“That would be much more preferable than an unfunded mandate on the entire medical profession that negatively impacts patient care, that is suspect in terms of its use as a research tool and may not even improve the billing process,” he said.

Harmon said small practices like his cannot afford the financial impact of the impending deadline for transition. He advocated for an American Medical Association proposal calling for a two-year transition period during ICD-10 implementation where physicians would not be penalized for errors in the system.

He said this transition period would give physicians time to adjust without receiving reimbursement denials that would “bankrupt” doctors and “jeopardize” patient access.

“What we’re asking for is a set of training wheels on this new bicycle if we’re forced to ride it,” he said.