Private Payers Serving Individuals with Disabilities and Chronic Conditions. C. Overview of Approach with Claims Data


Because the data source for the Private Payers Study includes health insurance claims from employers, the criteria used to define those with potentially disabling chronic conditions rely heavily on diagnosis codes available from the claims data. In an earlier paper for the Private Payers Study, Crown et al. (1998a) developed criteria to identify disability using both physical and mental health criteria. Many diagnosis codes for physical and mental conditions indicate a potentially disabling chronic condition by themselves. Others indicate disability only in the presence of corroborating patterns of utilization. Although there are broad areas of overlap in the criteria for children and adults, some conditions are specific to each group.

To develop the lists of particular diagnoses that indicate potentially disabling chronic conditions we used the following process. First, a clinical coding specialist selected conditions thought to potentially result in partial or total disability. Any conditions known to be invariably terminal within six months were excluded from consideration because the focus of this research was on chronic conditions expected to last for a long time, and because the managed care literature rarely focuses on plan type comparisons for those with terminal illnesses. The rationale for the selections made by the clinical coding specialist was her clinical knowledge as well as data gleaned from leading medical reference texts. Her preliminary list of conditions was forwarded to a consulting physician for review of the appropriateness of inclusion. The physician was an internist in clinical practice with experience in making disability determinations on a regular basis. Together, the clinical coding expert and the internist attempted to identify all conditions that may, in and of themselves or as a result of their complications, lead to permanent or temporary disability and inability to perform regular gainful employment. For children, the conditions are those that restrict their usual daily activities, such as play and school attendance.

As they make disability determinations for their patients, most primary care physicians make these same types of judgments about restriction of activity on a daily basis. After review by ASPE staff and subsequent review by the MEDSTAT clinical coding specialist and internist, a few modifications to the list of qualifying diagnoses were made.

According to this approach, potential disability may be on the basis of either mental or physical problems that result in loss of normal functioning. Considerations taken into account when making disability determinations for patients with mental disorders typically include whether the patient is capable of conducting work independent of supervision or direction, of making sound judgments, and of being sufficiently independent to take care of one's own grooming and daily needs. Potential physical disability is a physical problem that meaningfully interferes with the patient's ability to conduct his/her usual work, and often is based on changes in endurance, coordination, strength, flexibility, or because of chronic pain or severe chronic illness. Severity of illness and disability varies among the coded disability conditions and cannot be assessed by the code alone. For some conditions, other factors such as health service utilization patterns are noted to help increase the likelihood that the existence of the condition is disabling.

1. People with Potentially Disabling Chronic Physical Illness in This Study

Table 3-1 (from Crown et al., 1998a) provides a summary of the diagnoses and utilization criteria used to identify children and adults with potentially physically disabling chronic conditions. The diagnostic summary in Table 3-1 refers to the detailed list of ICD-9-CM codes in Appendix A that indicated the presence of severe and potentially disabling chronic physical conditions.1 These diagnoses are presented for children and adults separately. The set of per se disabling diagnoses is noted by a “Yes” in the third column of Appendices A-1 through A-4.

TABLE 3-1. Physical Disability Criteria
Diagnoses Alone (Per Se Disabling Conditions)

Has at least one of 328 diagnosis codes for severe and chronic conditions, as either primary or secondary diagnoses. The composition of these diagnosis codes differs for children and adults. (See Appendix A-1 and Appendix A-2)
Diagnoses with Utilization Criteria

Has a primary diagnosis of asthma in combination with 2 or more hospitalizations, or 3 or more emergency room visits with a primary diagnosis of asthma; or

Has a primary diagnosis of epilepsy in combination with 1 or more hospitalizations, or has 3 or more emergency room visits with a primary diagnosis of epilepsy; or

Has any of selected adult primary diagnoses (noted in Appendix A-1) in combination with 1 or more hospitalizations or 3 or more emergency room visits.

The second set of criteria in Table 3-1 refers to diagnoses of asthma and epilepsy in conjunction with utilization criteria. Children or adults with asthma were considered as potentially disabled only if they had at least two hospitalizations or at least three emergency room visits with a primary diagnosis of asthma. Similarly, adults and children with epilepsy were considered disabled only if they had one or more hospitalizations or three or more emergency room visits with a primary diagnosis of epilepsy.

2. Potentially Disabling Chronic Mental Illness in This Study

Exhibit 3-2 outlines diagnosis code and utilization criteria that were used to identify children and adults with potentially disabling chronic mental illness. As with physical disabilities, certain mental diagnoses such as schizophrenia or moderate, severe, or profound mental retardation are nearly always disabling. Other diagnoses such as depression or panic disorders are generally only disabling if they occur in conjunction with comorbidconditions or if the severity of the diagnosis is indicated by utilization criteria. Thus, Table 3-2 includes two mental health disability screens based on a broader set of mental health diagnoses in conjunction with utilization criteria. The specific ICD-9-CM mental illness diagnoses used for these criteria are listed in Appendix A-3 and Appendix A-4.

TABLE 3-2. Mental Disability Criteria
Diagnoses Alone (Per Se Disabling Conditions)

Schizophrenic or schizoaffective disorder
Manic depression or bipolar disorder
Psychoses with origin specific to childhood
Mental retardation: moderate, severe, profound
Anorexia nervosa
Diagnoses With Comorbid Conditions

Depression with anxiety disorder
Substance abuse with secondary psychiatric disorder
Panic disorders with substance abuse
Diagnoses With Utilization Criteria

Depression with any of these:
  • inpatient treatment episode (30 or more days)
  • episodes of care in previous 2 years
  • prescription for an MAOI (monoamine oxidase inhibitor)
  • ECT (electroconvulsive therapy) treatment

Panic disorder with either of these:

  • inpatient treatment episode (30 or more days)
  • prescription for an MAOI

Obsessive compulsive disorder (ICD-9-CM 300.3) with either of these:

  • inpatient treatment episode (30 or more days)
  • prescription for tegratol, clozapine, dilantin, or an MAOI

Primary psychiatric diagnosis (Appendix A-3 and Appendix A-4) with either of these:  

  • hospital stay of 30 days or more
  • outpatient payments of $5,000 or more

View full report


"privpay.pdf" (pdf, 3.64Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®