Health care IT bill could increase costs by $416 million

America's Health Insurance Plans released a new study that found a provision in a health care information technology bill (HR 4157) passed earlier this year by the House could increase U.S. health care costs by as much as $416 million, CQ HealthBeat reports (Carey, CQ HealthBeat, 10/27).

The legislation, approved on July 27, would codify the Office of the National Coordinator for Health Information Technology within HHS; establish a committee to make recommendations on national standards for medical data storage; and develop a permanent structure to govern national interoperability standards. The legislation also would clarify that current medical privacy laws apply to data stored or transmitted electronically and would require the HHS secretary to recommend to Congress a privacy standard to reconcile differences in federal and state laws. Under the bill, the number of billing codes health care providers use to file insurance claims would increase from 24,000 to more than 200,000 by October 2010. In addition, the legislation includes an exemption of anti-kickback laws that would allow hospitals to provide health care IT hardware and software to individual physicians. The Senate in November 2005 approved a separate bill (S 1418) that does not include the provision on billing codes or the exemption of anti-kickback laws. Lawmakers last month failed to resolve differences in the bills prior to congressional adjournment for the midterm elections (Kaiser Daily Health Policy Report, 10/2).

AHIP Study
In an Oct. 12 letter to lawmakers, AHIP President and CEO Karen Ignagni wrote that the study, prepared by HayGroup, found "the near-simultaneous adoption of the new transaction standards and the new coding standards could potentially increase the cost for implementation by $115 million to $416 million." According to Ignagni, the October 2010 deadline for implementation of the new billing codes is "unrealistic." She added, "This early deadline fails to recognize the massive systems changes the clinicians, institutions, health insurance plans, vendors and other partners will need to implement before making the transition to the new codes." Ignagni recommended that lawmakers extend the deadline for implementation of the new billing codes to 2012.

Coalition Seeks Passage of Final Bill
In related news, a coalition of manufacturers and medical and business groups in an Oct. 11 letter asked lawmakers to approve a final health care IT bill when they return on Nov. 13 for a lame-duck session. According to the letter, "seizing this important opportunity will move us one step closer to transforming a disconnected health system to one that promises substantial improvements in quality, safety and efficiency for America's patients and higher value for private and public payers." The American Academy of Pediatrics, Dell, the National Association of Manufacturers and the U.S. Chamber of Commerce signed the letter (CQ HealthBeat, 10/27).