Electronic Health Records

Policy & Regulation News

Estimating the costs of ICD-10 implementation

By Jennifer Bresnick

A recently released white paper by MediMobile helps providers evaluate the potential concrete costs per practice for the upcoming implementation of the tenth revision of the International Classification of Diseases (ICD-10).   Nachimson Advisors, LLC, a consulting firm specializing in health information technology, estimates the cost to be between $83,000 for a small practice and $2.7 million for large healthcare systems.

ICD-10 represents a dramatic shift in the way medical coding is conducted, using nearly five times as many codes as ICD-9, adding greater specificity and detail to patient charts.  Only 24% of ICD-9 codes have a direct correlation with ICD-10, meaning coders will need to absorb a significant amount of new knowledge in order to use the system effectively.

By October 1, 2014, all practices must be ready to embrace the new coding system, having made all the necessary technological updates and provided adequate training to physicians and administrative staff.  The costs involved in completing these tasks are a matter of great concern to providers who will need to budget financial resources accordingly.

Nachimson Advisors provided a chart breaking down the estimated costs for small providers, defined as three physicians and no dedicated coders, medium practices containing ten physicians and one full-time coder, and large practices, with one hundred practitioners and sixty-four members of coding staff.  The findings indicate high costs for every size practice: $83,000 for a small practice, approximately $285,000 for a medium size, and $2.7 million or more for large systems.

The largest anticipated expenditures involved increased documentation costs and general cash flow disruption as productivity drops during the learning process.  These costs make up 76% of anticipated expenditure for small practices, but increase to 89% for large hospitals.  Education is a relatively small expense, projected to require only 2% of ICD-10 budgets across the spectrum.

The costs involved with ICD-10 implementation will not be purely financial.  The paper notes that currently, approximately 15-20% of a patient’s visit is spent on physician documentation, but the new documentation requirements are expected to add an additional 4% of the visit to that time, reducing physician-patient interaction permanently.

Providers can help mitigate these costs by utilizing electronic health record (EHR) systems with the capacity to adapt to the changes inherent in ICD-10, providing ample training to coders and physicians before ICD-10 comes into effect, and creating a detailed plan for transition in advance of 2014.

Training physicians and coders how to navigate the new system is an essential step in smoothing the way for ICD-10, and one that is not expected to be prohibitively expensive.  While practices cannot hope to avoid the financial burdens associated with the federally mandated shift, they can be aware of potential costs and plan to absorb them as best they can.

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