Implementing ICD-10 by the October deadline may be more costly than initially expected. In the updated report entitled “The Cost of Implementing ICD-10 for Physician Practices,” Nachmison Advisors estimated costs dramatically higher than initial estimates from 2008.
Large healthcare provider:
- $2 million to $8 million: 2014 revised estimate
- $2.3 million: 2008 initial estimate
Midsized healthcare provider:
- $213,364 and $824,735: 2014 revised estimate
- $285,195: 2008 initial estimate
Small healthcare provider:
- $56,639 to $226,105: 2014 revised estimate
- $83,290: 2008 initial estimate
The predicted costs are based on a comprehensive estimate that takes several factors into account. These include:
- Productivity losses for physicians
- Disruptions in payment
- Training and testing
- Practice assessments
- Implementation of the system
Healthcare providers who don’t master ICD-10 from the get-go are likely to face even greater costs that include repeat training and ongoing loss of productivity.
Impact of Implementation
AMA President Dr. Ardis Dee Havensaid expressed the organization’s view in a news release. He said forcing physicians to adopt the new system would place a “crushing burden” on them, resulting in a decrease in resources available for innovations designed to decrease costs and improve the quality of care.
FACHE spokesperson M. Alexandra Johnson added the impact would extend far beyond physicians but additionally place a great burden on healthcare administration.
The cost survey alone was strong enough to compel AMA Executive Vice President and CEO James Madara to pen a letter to Washington asking the mandate be reconsidered.
Proper Planning Not the Norm
Although the healthcare industry did enjoy advance warning that ICD-10 would be required by Oct. 1, 2014, not everyone is ready. In fact, a January Navicure survey found that the majority of survey respondents haven’t even started their transition process.
- 74 percent: Survey respondents that still need to start their transition plan
- 9 percent: Survey respondents that said they are “not confident” they will be prepared
Another January survey, this one conducted by Medical Group Management Association, polled more than 570 physician practices and asked the same question.
- 38 percent: Practices that still need to start their transition plan
- 9 percent: Practices that have made “significant progress”
- 0 percent: Practices that had completed their transition plan and were ready for implementation
Requirements for Compliance
Complying with the new code set is not a simple purchase-and-install procedure, but rather one that requires investing in multiple solutions. Such solutions consist of:
- Adhering to EHR Meaningful Use mandate
- Purchasing an upgrade or new electronic health record software for 2014 and ICD-10
- Updating practice management systems to work with ICD-10
- Suffering financial cuts due to Part B reimbursement standards
- Offsetting another 2 percent cut in finances stemming from the sequestration
Despite the short-term colossal costs of implementing ICD-10, advocates say the updated system will turn out to be beneficial in the long run. They explain the nearly four-fold increase in number of codes and other changes can improve the healthcare industry by:
- Giving providers more detail and flexibility for describing diagnoses and procedures
- Helping healthcare organizations process claims more efficiently and improve other operations
- Potentially making an improvement in overall healthcare costs
- Allowing the public health system to create targeted strategies to promote health and wellness
- Providing more meaningful data from claims
Are You Ready?
No matter where healthcare providers stand on their support of ICD-10, all are still expected to meet its implementation deadline. The transition can be much easier with Practice Suite billing software with dual mode coding that supports ICD-9 and ICD-10. Practice Suite can help take the hassle out of the transition and ensure your practice is ready for ICD-10.
Last Updated on February 20, 2014