What are codes for, really? Research and quality, or money, money, and more money?

April 7th, 2017 / By Rhonda Butler

Codes and coding are back in the headlines. A recent in-depth New York Times article examines the labyrinth of coding and billing, and asserts that coding is one reason for the high cost of health care. I highly recommend this thought-provoking piece.

Those of us who have expertise in a tiny portion of this complex subject could take issue with some of the article’s details, but the general point is impossible to ignore: like the tax code, the article says, the complexity of coding and billing has spawned an arms race, with codes as the weapons. Our health care system currently uses the complexities of coding and billing to wage war over how much providers can charge and how much payers will pay.

The article states that each billing decision, “…can be seen as a battle of coder versus coder. The coders who work for hospitals and doctors strive to bring in as much revenue as possible from each service, while coders employed by insurers try to deny claims as overreaching. Coders who audit Medicare charts look for abuse to reclaim money or fraud that needs to be punished with fines.”

The article goes on to say that all of us are harmed by this layer of complexity, some more than others—in the high administrative costs of health care, in the frustration of caregivers, and in the often devastating effect on the human beings it purports to serve. As one online comment to the article put it, health care is a misnomer. This system is not about health and it is not about care. It’s about money.

We who deal in codes every day, and who may even specialize in a certain coding system such as CPT or ICD, know that codes are not only about research and quality, but are the building blocks used to determine payment. So maintaining that the use and abuse of codes is someone else’s problem, because SNOMED and ICD were “not designed for administrative uses” comes across as Ivory Tower-ism to me. The fact that coded data is available for research and quality reporting is inseparable from the fact that these code sets are used to transact business. And the fact that codes are misused in a payment arms race is everyone’s problem.

The population health movement has an excellent opportunity to use hostility against the coding and billing arms race to advance population health alternative payment models to the next level. I sincerely hope they take advantage of it. This is a perfect time to showcase the financial piece of the Triple Aim, “reducing per capita cost of care for the benefit of communities.” Models that pay a negotiated amount for the annual care of an individual take the battle over codes out of the picture. Individual codes no longer come with a price tag.

I personally look forward to a time when a provider’s charge data master calculates actual costs and ceases to be used to fire the first salvo in the price war; when ICD codes can be used as designed, for statistical tracking of the incidence of disease; and when SNOMED ceases to be used as the SKU buried in the electronic health record.

As providers, payers, and provider-affiliated health plans increasingly look at paying for health care in patient-centered chunks rather than as individual fees paid to individual providers, they will need the help of HIM professionals to untangle ICD and SNOMED codes from their more unhealthy uses, and ensure they still play the useful role they were meant to play.  A healthcare system without ICD and SNOMED codes is throwing the baby out with the bathwater. There are very real benefits to the judicious use of these code sets. In a patient-centered population health based system, some known and statistically fairly reliable vehicle must still be used to track quality and outcomes. Both ICD and SNOMED codes can be used to evaluate the relationship between care and cost for the larger population over time, instead of being used up front to determine the price for an individual encounter. These code sets are a known method of summarizing (think Cliffs Notes for health care). ICD and SNOMED are what we have, and we must make the best of what we have until something better comes along.

Rhonda Butler is a clinical research manager with 3M Health Information Systems.


Have a question about coding quality audits? Read this article.