ICD-10 Delays Lead to Higher Costs

April 14, 2014
Ed Rabinowitz

The cost to implement ICD-10 were already estimated to be dramatically more expensive than initially thought. Now, with another one-year delay, practices will face more expenses.

The cost to implement the mandated ICD-10 code set will be “dramatically more expensive for most physician practices” than previously anticipated, according to a recent study initiated by the American Medical Association and conducted by Nachimson Advisors. Why?

“The main reason is because of the initial delay,” says Michele Hibbert-Iacobacci, a certified clinical coding specialist with Mitchell International. “Carriers have almost had to do their gap analysis twice. They’ve had to do requirements twice, because systems build upon systems. And we’re still hearing reverb of [additional] potential delays. I don’t believe that’s going to happen, but if it did, it would be another expense.”

Well, get ready for another expense now that Congress approved a bill that delays the conversion to ICD-10 “for at least one year.”

Dollars don’t lie

According to the AMA cost study, in 2008, estimates to implement ICD-10 were approximately $83,290 for a small practice, $285,195 for a medium-sized practice, and $2.7 million for a large practice. In comparison, the recent study found those costs could reach as high as $226,105, $824,735, and $8 million, respectively. The cost study also indicates that “two-thirds of physician practices are projected to fall into the upper range” of those cost estimates.

“This is a big problem for providers,” says Tina Greene, a senior regulatory affairs consultant with Mitchell International. “These delays are causing hiccups everywhere.”

Hibbert-Iacobacci

Part of the problem, says , is the mentality that “change is difficult, and why do we have to do this?” But, she adds, there’s a greater reason for the multiple delays and increased costs.

“I don’t think that, as an industry, we’ve done a very good job of letting providers know the benefits of ICD-10,” she says. “Maybe they don’t want to listen to it, because when they think of coding systems they think it’s just going to benefit the payers.”

Michael Murphy, MD, chief executive of Scribe America, agrees. He points out that some medical practices are being very cavalier about ICD-10, while others simply don’t understand it.

“I agree that the costs will be higher than anticipated, and it will be due in part to the lack of ability to prepare for the transition,” he says.

But the fact is it will cost less work by a provider in the long run, says Hibbert-Iacobacci. If they learn how to report these codes properly, there will be less documentation back and forth. She further explains that the additional codes that are part of ICD-10 will provide much greater granularity in the details of what happened to a patient during his or her encounter at the hospital or at the physician’s office. But instead of focusing on the positive aspects of the expanded coding system, the talk has been about the rare, oddball codes that seem unnecessary.

“As an industry, I don’t think we’ve done a great job with providers,” she says.

More training, increased payments

No one is arguing that the transition from ICD-9 to ICD-10 codes requires additional training for staff. The AMA cost study pegs that as ranging from $3,000 for a small practice to more than $75,000 for a large practice.

“Even a skilled ICD-9 coder going into the ICD-10 world is really going to have to pay attention to their [accounts payable] background,” Hibbert-Iacobacci says. “If they don’t really have a great one, they need to go get one. We have approximately 30 certified coders working with Mitchell. We started the planning process years ago to potentially give our customers a leg up.”

Vendor and software upgrades, according to the AMA study, will also be high, ranging from approximately $60,000 for small practices to almost $2 million for large practices.

But according to Hibbert-Iacobacci and Greene, the cost to the medical practice may be a worthwhile investment from a bottom-line perspective.

“Everything’s about accounts receivables when you’re running a business,” Hibbert-Iacobacci says.

Echoes Greene: “Part of our messaging to providers has been, ‘Look, there are payments here. You’ll get paid quicker than the regular paper processing.”

Catching up

Hibbert-Iacobacci suggests that to get the ball rolling and maximize the benefits of ICD-10, medical practices and hospitals should focus on training, as well as reading everything they can on the Centers for Medicare and Medicaid Services’ website regarding the new coding. She also suggests reviewing the types of services the medical practice currently provides.

“Work with a coding specialist to isolate the codes and the situations used most prevalently by your office,” she says.

That means if you’re an orthopedic surgeon, it would behoove you to become very familiar with the way the new injury codes are structured as they relate to your specialty.

“Providers really need to keep tabs on their practice management system,” Greene adds. “Make sure they know what their ICD-10 plan is, and that they have status updates. Also, develop contingency plans.”

Because there could always be more delays.