Groups fund ICD-10 cost study, dispute time frame

Implementing the new ICD-10 codes will cost the typical small medical practice (three doctors and two administrative staffers) $83,200; the typical medium-size practice (10 providers, six staffers, one full-time coder) $285,195; and the typical large practice (100 providers, 54 medical records staffers, 10-full-time coders) almost $2.73 million, according to a new study conducted by Reisterstown, Md.-based Nachimson Advisors, a healthcare information technology consultant. The study was funded by 11 medical organizations, including the American Medical Association and the Medical Group Management Association, and it researched the costs associated with replacing the current ICD-9 codes with the new, more detailed ICD-10 system by 2011 as proposed by HHS.

Some of the costs would be one-time only, such as staff training, changing superbills to include 10 times as many codes, upgrading IT systems and insurance plan review, the study concluded. Cash flow disruption during the transition was listed as the second-largest cost, and would equal $19,500 for the typical small practice, $65,000 for the medium-size practice and $650,000 for large practices.

The largest costs would be permanent increased documentation costs that were based on an estimate that using the newer codes—developed by the World Health Organization in 1992—would increase the average time a physician spends on documentation tasks by 4%. Using MGMA figures for average primary-care and specialist collections, Nachimson calculated this 4% increase translates into $14,800 per primary-care doctor and $20,900 for a specialist. If the physicians choose, the report noted, rather than increase their work time, they could see fewer patients, which would result in a drop in income rather than an increase in costs.

"If HHS' proposed 2011 time frame for implementing ICD-10 goes forward as planned, physician practices will have to cope with a crushing burden of added costs, duplicative systems and confusion over health insurers' coverage decisions,” said William Jessee, MGMA president and chief executive officer, in a news release. “HHS' proposed time frame is unworkable for patients, physician practices and clinical laboratories and needs to be changed."

The American Health Information Management Association supports the change to ICD-10.

AHIMA "has problems with the underlying assumptions upon which the Nachimson study referenced by the Medical Group Management Association is based,” said AHIMA CEO Linda Kloss in an e-mail. “Obviously, the cost of implementation for ICD-10 will only grow the longer we delay initiating that process.”

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